Commercializing a Unique OTP Model
From a Napkin Idea to $50MM+ Annual Revenues and $9B+ Value Opportunity
Marion Street Capital’s expertise in healthcare revenue consulting helped an Opioid Treatment Plan (“OTP”) clinic grow from a “napkin idea” to $50MM in 3 years by delivering a combination of financial strategy, technology implementation, data-driven processes, and business process optimization.
The Most Pressing Challenge
Opioids caused over 75% of all drug-related deaths in the United States in 2021, a fivefold increase since 1999, with little evidence of slowing down. The traditional model for (“OTPs”) faced several key challenges:
Traditional outpatient medication-assisted treatment (“MAT”) programs for opioid disorders were not economic, only offering $18 per Medicaid encounter as of 2022, restricting investment into modern infrastructure and novel treatment plans.
The opioid crisis disproportionally affects traditionally disadvantaged populations, such as American Indians and Alaska Natives, including a lack of customized treatment plans, and access to treatment altogether.
Existing medical and billing technology did not adequately serve OTPs, especially those with niche programs.
Marion Street Capital (“MSC”) identified a unique business model that could rapidly scale, drafted a financial model, implemented the finance function for the clinic, onboarded an MSO for which MSC served as CFO, and implemented efficient operations and processes.
How Marion Street Capital Solved the Most Pressing Challenge
Marion Street Capital deployed its FinOps and DataOps solutions, and it optimized processes for the business, as follows.
As CFO of HealthcareCo, MSC performed market research, researched an optimal tax and ownership structure for the clinic, and developed a 3-scenario financial model that would serve as the guiding star for the organization. MSC implemented billing processes for the organization, established FP&A processes, identified KPIs upon which management needed to focus, and provided general guidance for the organization as it established itself.
MSC provided quarterly and annual MD&A, assisted in completing audits for state and federal regulators, and ensured the company was optimizing expense management by implementing new financial safeguards and solutions.
FinOps
HealthcareCo onboarded a new EMR system and had no method to quantify clinic performance, visualize the data, or integrate the system’s tools into key processes. MSC built HealthcareCo a set of dynamic dashboards and reporting processes for key management and stakeholders.
After preparing a process to extract and clean nearly 2MM records of daily data, MSC analyzed data structure and quality. MSC created a data model, formed key relationships, and diagnosed key issues for clinic staff, which resulted in capturing lost revenue due to inaccurate or missing information.
The set of dynamic dashboards and KPIs built by MSC are now included in weekly executive meetings, financial MD&A, and annual reports.
DataOps
Business Process Optimization
After implementation of the new EMR system and MSC DataOps solutions, members of the HealthcareCo’s billing staff were not prepared for onboarding an advanced billing platform, which trickled down to the clinic’s financial performance.
MSC implemented a Change Management approach to address this challenge by aligning staff members with newly implemented key processes and HealthcareCo’s executive leadership. MSC performed several on-site visits to understand the obstacles and challenges that each staff member at HealthcareCo was facing, assisted in restructuring staff member functions, and implemented Six Sigma methodologies into the billing process.
Outcomes
Revenue increased by >50% in the first year after EMR implementation, which positioned the facility to generate $50MM+ in just the third year of operation.
Provider utilization increased by 50%, as clinic management was able to actively manage critical staffing processes, recruitment, and retention.
Reduced average insurance DSO after switching EMR providers by 30% and reduced lag time for claim submission by 50%
Clinic management uses insights and dashboards to make real-time decisions daily.