Professional Documents
Culture Documents
1 Running Head: Alameda HHD Business Plan
1 Running Head: Alameda HHD Business Plan
Jessica Ndegwa
Alameda HHD is a consulting company whose goal is to help hemodialysis (HD) patients
safely transition to performing their own dialysis at home. Home HD as opposed to In-center
Hemodialysis (ICHD) has multiple benefits for patients due to the convenience of increased
flexibility from personalizing the dialysis schedule to fit one’s life. In contrast, ICHD is
associated with higher healthcare costs, a negative impact on clinical and patient-centered
outcomes, unsustainable growth in patient numbers, and inadequate facility HD staff and
County in Northern California to identify patients who are suitable for home HD. Once a patient
who currently receives ICHD is identified for home HD, Alameda HHD helps provide safe and
effective home training for the patient to ensure a smooth transition to dialyzing at home, taking
Estimated start-up costs is $15,000. Projected onset of cash flow is January 2021,
assuming consultation service is requested for two patients. The projected number of patient
consultations for 2021 is 20 patients, with an operating margin projection of $350,000 and
operating costs of $125,820. Business growth from January 2021 to December 2021 is projected
to be greater than 50%. Upfront costs and investment costs are projected to have a 100% return
by March 2021. Successful patient transitions to home HD are projected to lead to an increase in
consultation needs. Thus, business growth is anticipated with expansion to other counties in the
San Francisco Bay Area. Collaboration with dialysis facility administration, nephrologist, case
manager, dietician, and the NxStage Home HD machine provider will result in successful
identification of patients suitable for home HD, as well as an easier and safer transition of such
Alameda HHD is a northern California company serving Alameda county that provides
home HD training to patients with End Stage Renal Disease (ESRD) at home as opposed to at a
facility. According to Rivara and Mehotra (2014), growing evidence supports outcomes for
patients undergoing both peritoneal dialysis and home HD are as good or better than those for
patients undergoing ICHD. The National Institute of Diabetes and Digestive and Kidney
Diseases (NIDDK, 2016) states 661,000 Americans have kidney failure and 468,000 are on
dialysis. According to United States Renal Data System (USRDS) in 2017 among patients being
treated with HD, 98% used ICHD and only 2% used home HD.
with adequate training to perform dialysis in the comfort of their home. Once a patient is
identified as meeting criteria for home HD, an Alameda HHD RN will coordinate with the
dialysis facility to arrange for at home HD training sessions. A maximum of 25 sessions for
home HD are offered within a six-week period to comply with CMS reimbursement policy.
According to the National Kidney Foundation (2015), home HD has patient benefits such as
maintenance of quality of life and employment, improved energy and vitality, and fewer fluid
and dietary restrictions. These benefits concur with the research data reported by Brill (2016)
that stated only 9% of nephrologists chose ICHD when asked about their preference if they
The company’s objectives are to address the inequities in access to home HD and
increase its utilization. The plan is to partner with dialysis centers certified by CMS to offer this
option to patients and assist them in making a seamless transition to this modality. Successful
4
ALAMEDA HHD BUSINESS PLAN
home HD adoption and utilization requires adequate education and support by CMS and
outcomes, decrease financial burden from workforce affected, and decrease health care spending
by improving ESRD management. As the population affected by ESRD increases, with few
Business Description
Alameda HHD is a company that seeks to increase the use of home HD as opposed to In-
center Hemodialysis (ICHD) by performing at home training with the patient and a care partner
if available. Performing dialysis in the comfort of one’s home negates the need to drive to a
facility, creates greater individualized care from increased schedule flexibility, promotes
maintenance of quality of life and employment, has a lower infection risk, and increases patient
empowerment from control of care. Alameda HHD working in conjunction with the patient’s
dialysis clinic, helps the patient set up the equipment, supplies, and provides ongoing
personalized training at the patient’s home for a specified number of sessions. Assisting the
patient from the onset with this setup in their home eliminates stress and pressure associated with
this nuance. The nurse brings the dialysis machine to the patient’s home, locates the water source
(a simple faucet or under-sink connection), electric outlet, and designated area where the patient
will conduct dialysis. The nurse also helps the patient determine a storage space for the dialysis
equipment and supplies, which will then be set up for monthly delivery. The dialysis equipment
used will be NxStage System One, the training will be done by certified dialysis registered
nurses, equipment and supplies will be paid for according to insurance coverage.
5
ALAMEDA HHD BUSINESS PLAN
Opportunity. Alameda HHD will serve dialysis patients in Alameda county. Further
few kidney transplants available, increased demand for more dialysis facilities, and an increase
in patients that can independently conduct dialysis at home. According to the Healthy Alameda
County Website (2020b), the percentage of Medicare beneficiaries who were treated for chronic
Product overview. The service offered is provision of initial home dialysis supplies and
training at home for HD. Alameda HHD takes on the responsibility of setting up initial
equipment and supplies, and coordinates with the dialysis clinic, nephrologist, and social worker
to help the patient focus solely on the most important aspect, which is the home dialysis training.
Once the training sessions are complete, Alameda HHD develops a plan of care for the patient,
which has direct input from their nephrologist at the dialysis clinic, dietitian, and social worker.
Alameda HHD nurse will arrange to check-in with the patient at their monthly clinic visits and
also offer free phone consultations for questions or concerns that may arise.
Key participants and management team. NxStage will be the specific company whose
home HD equipment (NxStage System One) will be provided to the patient. Alameda HHD will
work in conjunction with the patient’s dialysis clinic, the patient’s nephrologist, social worker,
and dietician.
Clinical or Regulatory compliance. To comply with the federal Medicare conditions for
coverage for ESRD, Alameda HHD will only work with CMS certified dialysis clinics approved
to provide home HD and will employ only Certified Dialysis Nurses (CDN) to conduct the
training and ongoing follow-ups. NxStage System One dialysis machines are approved by the
6
ALAMEDA HHD BUSINESS PLAN
Food and Drug Administration (FDA) for solo home HD therapy (without the mandate for a care
Pricing. According to the CMS website (2019), Medicare Part B covers 80% of dialysis
and provides reimbursement for the cost of a home machine for HD, equipment, and supplies.
The patient’s secondary health plan covers the remaining 20%. Medicare also pays for up to 25
home HD training sessions, which typically last three to five hours. This payment is for staff
time, use of the machine, supplies, bundled labs and drugs, and training materials. According to
Home Dialysis Central (2020), Medicare will routinely pay for up to three home HD treatments a
week but may pay for more treatments if the patient’s nephrologist provides an indication for the
need for more sessions. Alameda HHD will be paid for providing consultation service and
coordinating initiation of home HD for a clinic’s patient. According to the USRDS (2019), one
year of HD can cost up to $72,000. With this statistic in mind, the consultation fee for Alameda
HHD services will be prorated at a retainer basis, with a monthly fee of $10,000 per patient. This
cost covers the nurse’s salary (based on hours conducting the in-home training), commute
expense, and nurse training on NxStage equipment. Administrative, marketing and consulting
operations conducted by the CEO, will be based from my home office. Two CDNs paid $60 per
one hour of training conducted at the client’s home will be hired. Projected revenue from one
client is $10,000 for a one-month period of training (12 sessions, three per week). Cost of labor,
such as employee salary and commuting expenses, is estimated at $4,000 every month. Monthly
operating expenses, taxes, and legal fees is estimated at $2,000. Projected gross profit is
estimated at $4,000 with a gross margin of 40%. Further expansion of Alameda HHD services to
multiple CMS certified dialysis clinics and other counties is the future fiduciary vision for this
company.
7
ALAMEDA HHD BUSINESS PLAN
Market Analysis
Industry type. Alameda HHD is a company that seeks to offer home HD training to
ESRD patients that have the capability of handling that modality at home, which has been
associated with improved quality of life and greater schedule flexibility. Patients are able to live
Demographics. The target market for Alameda HHD is ESRD patients on HD that have
Alameda county in Northern California. According to the Centers for Disease Control and
Prevention (CDC) in 2016, nearly 125,000 people in the United States started treatment for
ESRD, and more than 726,000 (two in every 1,000 people) were on dialysis (CDC, 2019).
According to the Healthy Alameda county website, as of 2020, there are 1,682,509 people in
Alameda (Healthy Alameda county, 2020a). Taking the CDC dialysis ratio into account, there
are approximately 3,365 dialysis candidates in Alameda for the service we are seeking to
provide.
Buyer characteristics. The target patient is one that has HD at a dialysis center that is
CMS approved to offer home HD. The patient has adequate insurance coverage for this modality,
shows interest in home HD, meets home requirements, wants to maintain quality of life, income
or employment by having better flexibility with their treatment, and shows competency, such as
never missing dialysis treatments and is compliant with medication and lab or clinic
appointments.
Market segmentation. Among patients being treated with HD, 98% used ICHD, and 2%
used home HD. In 2017, use of home HD was 120.8% higher than in 2007. Despite the large
8
ALAMEDA HHD BUSINESS PLAN
proportional rise in home HD, its overall use was only 4% of all incident ESRD patients
receiving dialysis in 2017 (USRDS, 2019). These statistics show there is a demand for home HD
that has not been met. Alameda HHD engages and empowers patients by providing adequate
training to perform home HD and help improve and maintain quality of life despite having a
chronic disease.
Competition. The biggest competitor to its service is dialysis centers that provide in-
center dialysis. “It’s more appealing for a dialysis company to add patients to a center where one
machine can accommodate multiple patients than it is to provide new services to each patient at
home” (Luthi, 2019). The company seeks to work in conjunction with dialysis centers to provide
HHD service to patients, so the threat to the company would be if there is any resistance from the
spend additional funds and time to become CMS-certified to provide home HD to patients. To
combat such pushback, the company will provide a market analysis report to the dialysis centers
that details CMS reimbursement for home HD services. The plan will also discuss advantages of
consultation services, such as reduced staffing requirements for the facilities. The company will
provide clinicians data on long-term reduction of treatment costs associated with home HD, as
well as improved patient outcomes from early referral to our home HD service. Additionally,
using social media to inform patients of the benefits of home HD, would empower them to hold
their dialysis centers accountable for offering all treatment options and not just in-center dialysis.
See Table 1 for the company’s full Strengths, Weaknesses, Opportunities, and Threats (SWOT)
analysis.
Table 1
SWOT Analysis
9
ALAMEDA HHD BUSINESS PLAN
STRENGTHS WEAKNESSES
-Capabilities – the company is unique as it -Dependent on consultation from dialysis
will handle all the aspects involved in centers
transitioning patients from in-center HD to -Cash flow with the business startup -
home HD and coordinate with the patient’s advertising services, hiring CDNs, liability
nephrologist, social worker, and dietician. insurance
-Advantage -patient empowered to perform
HD in the comfort of their home; maintain
quality of life, employment, and diet; able to
travel and optimize flexibility, i.e. choose
location, frequency, and time of HD
-Assets - CDNs provide HHD training
-Experience- CDN to provide training on
NxStage one HD machine use
-Value - Takes the responsibility of
transitional home HD training off the dialysis
center
OPPORTUNITIES THREATS
-More patients diagnosed with ESRD every -Obstacle – if CMS reimbursement for home
year, demand for home HD is uncapped HD does not improve, there will be less
-Emerging technology will result in better incentive for dialysis centers to become CMS
user-friendly home hemodialysis machines certified to offer home HD services
that will lead to an increase in demand for -Dialysis centers once reviewing our service
home HD training. chooses to “cut out the middleman” and
-Expansion of telehealth services will make provide their own training
home HD a more viable option for clinicians -Liability concerns
to recommend to their patients
-Partnering with dialysis centers approved by
CMS for home HD will be key in obtaining
potential clients
-The shift toward patient-centered care will
increase the need for home HD
Note. Strategic analysis of Alameda HHD business venture.
To maintain a loyal customer base, Alameda HHD will provide monthly updates on their
patients’ progress, including the cost-savings achieved from offering this modality. Alameda
HHD will offer lifetime free phone consultations to the patients who receive services to address
any questions or concerns. Future technology advances will result in better, simpler user-friendly
home HD machines. This will increase the demand for home HD. Telehealth expansion will
make it viable for nephrologists to communicate with patients performing home HD which will
10
ALAMEDA HHD BUSINESS PLAN
drive the demand for our services. Demand for home HD associated with an increase in ESRD
patients will result in CMS reimbursement changes that will support its use and hopefully offer
Financial Plan
Projected start-up costs. Estimated start-up costs of $15,000 will be obtained from a
business line of credit, which has the advantage of only paying interest on the amount used. An
interest rate of 10% will be the cost of obtaining funding ($1,500). The business will be set up in
October 2020, and by January 2021, it will have its first two patient consultations for home HD
Staffing plan. For the first year, the employees will include myself in the administrative
role and two dialysis nurses. I will be tasked with managing the budget, payroll, marketing and
coordinating consultations between the dialysis center, the patient’s nephrologist and social
worker. The dialysis nurses are required to have a CDN credential, which dictates they have at
least 2,000 hours of nephrology experience. Once hired, they will undergo a two-day training
offered by NxStage to review NxStage System One, the specific dialysis machine that will be
used by the patients at home. The CDNs will be paid $60 per hour. Estimated hours of home HD
training of patients per week is 18 hours. Projected staffing costs for the first year will be
Cash flow and budget. The business will be consulted to train up to 20 patients for the
first year. The revenue stream will primarily come from patient consultation. The projected fixed
cost is $10,000 per patient referral for 8 weeks of HHD training. Cash will begin to flow
beginning the first month, in January 2021, with a sales forecast/net income of $8,563 for that
month. By December 2021, the company will be training up to four patients every month (sales
11
ALAMEDA HHD BUSINESS PLAN
forecast of $206,646), a 24% increase from January 2021.Variable costs include commuting
expenses, advertising and marketing expenses. The operating margin projection for the year 2021
is $350,000. The operating costs projection for the year 2021 is $125,820.
Projected profit and loss. Once the business starts getting more patient consultations as
projected in Table 2, expansion into a second county would be considered, which would
potentially create the need for additional CDNs. During the first year, the anticipation is by
December, four patients per month will be trained. To be budgetarily responsible, the company
will only require two nurses to handle the four patients. If there is a steady consultation for
services, less advertising funds will be required. Projected loss is not anticipated, but any loss of
patient referral will result in less profit. As long as there are two patient referrals a month, profit
is expected.
Fundraising or grant opportunities. Upfront costs that will be avoided include rental
space and furniture, as the business will be based from a home office. Potential return on
investment will offset the start-up costs. Potential risks, such as employee safety and legal
matters will be an ongoing risk. Employee safety will be managed by performing routine risk
assessments and establishing a protocol and policy for potential hazards. Each employee will
also be provided with a cell phone to check in with the CEO upon arriving and leaving the
patients home. To manage legal matters, the business will have a monthly stipend for legal
consultation fees. This new home HD service will significantly impact ESRD patient outcomes
by providing greater flexibility to maintain quality of life. It is also associated with fewer
hospital admissions (cost avoidance) due to increased patient involvement in their care and
having the ability to dialyze more frequently, as opposed to HD at a facility. Opportunities for
12
ALAMEDA HHD BUSINESS PLAN
outside funding may arise if as a result of a successful venture, the service provided will be a
Summary of assumptions. Beginning in January 2021, the company will have two
patient referrals from the dialysis center. That number will steadily increase through the year so
that by December, four patients will be managed each month. Only two CDNs will be required
for the year 2021. No projected losses will be incurred, as there will be a steady number of
referrals each month. The tax rate is 10% from January to March, and 12% from April to
December. The business will have a significant operating margin for 2021 that will necessitate
Table 2
Start-Up Costs
Table 2
MA MA AU OC NO DE
REVENUE JAN FEB APR JUN JUL SEP YTD
R Y G T V C
$20, $20, $20, $30, $30, $30, $30, $30, $30, $40, $40, $40, $350,0
Service Revenue
000 000 000 000 000 000 000 000 000 000 000 000 00
Less (Discounts, Billing
Errors, Declined insurance, $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
etc.)
Estimated sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Revenue $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$10, $20, $20, $30, $30, $30, $30, $30, $30, $40, $40, $40, $350,0
Net Sales
000 000 000 000 000 000 000 000 000 000 000 000 00
Cost of Goods Sold $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$20, $20, $20, $30, $30, $30, $30, $30, $30, $40, $40, $40, $350,0
Gross Profit
000 000 000 000 000 000 000 000 000 000 000 000 00
MA MA AU OC NO DE
EXPENSES JAN FEB APR JUN JUL SEP YTD
R Y G T V C
$17 $17 $17 $17 $17 $17 $17 $17 $17 $17 $17
Administrative General $175 $2100
5 5 5 5 5 5 5 5 5 5 5
$10 $10 $10 $10 $10 $10 $10 $10
Location/Office $100 $100 $100 $100 $1200
0 0 0 0 0 0 0 0
14
ALAMEDA HHD BUSINESS PLAN
Marketing $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $600
$10, $10, $10, $10, $10, $10, $10, $10, $10, $10, $10, $10, $120,0
Labor
000 000 000 000 000 000 000 000 000 000 000 000 00
$16 $16 $16 $16 $16 $16 $16 $16 $16 $16 $16
Other $160 $1920
0 0 0 0 0 0 0 0 0 0 0
$10, $10, $10, $10, $10, $10, $10, $10, $10, $10, $10, $10, $125,8
Total Expenses
485 485 485 485 485 485 485 485 485 485 485 485 20
$9,5 $9,5 $9,5 $19, $19, $19, $19, $19, $19, $29, $29, $29, $234,1
Income Before Taxes
15 15 15 515 515 515 515 515 515 515 515 515 80
Income Tax Expense $234 $234 $234 $234 $234 $234 $354 $354 $354 $27534
$952 $952 $952
2 2 2 2 2 2 2 2 2
$856 $85 $856 $17, $17, $17, $17, $17, $17, $25, $25, $25, $206,6
NET INCOME
3 63 3 173 173 173 173 173 173 973 973 973 46
Note. Profit and loss projection for January 2021 to December 2021
Operating/Implementation Plan
Timeline:
● July 2020 - September 2020: During this time, the company will ensure license
and registration are completed, legal counsel is consulted, work policies and
● September 2020 - December 2020: Two CDNs are hired and NxStage System
center that has CMS approval for home HD. The business associate agreement is
established.
● January 2021: First patient consultation for home HD training and the onset of
Key employees and organization. CEO/Home therapy program manager, who is CDN
certified, has completed training on NxStage System One machine. Is responsible for the budget.
Coordinates with the patient’s dialysis center, nephrologist and social worker. Is the main
resource for patients who receive the business phone number for questions and concerns
regarding their home HD. Dialysis nurses are required to have California RN license, CDN
certification, Basic Life Support (BLS) certification, and complete training on the NxStage
15
ALAMEDA HHD BUSINESS PLAN
System One machine. The home-based business will be conducted in Berkeley, CA - Alameda
Dialysis RN
CDN certified
CEO BLS certified
CDN certified
(OWNER) Dialysis RN
CDN certified
BLS certified
Actual work required. The CDN will be deployed to a patient’s home within Alameda
county. The patient should have received all the dialysis supplies in advance. The CDN will set
up home HD and provide safe and effective training to the patient on the following tasks: use of
home HD and water machines; proper disposal of needles, syringes, treatment tubing and
dialyzers; how to use and care for dialysis access; troubleshooting any issues that may occur
during treatment; resources available to address questions and concerns. The CDN will comply
with set policies and protocols and standards of home HD. The CDN will communicate patient-
related issues to the physician and adverse patient events to the dialysis clinic and nephrologist
as needed. Training per patient will be conducted in five-hour sessions, three times a week for
eight weeks. Patient will then receive a certificate once training is complete.
online lender for business line of credit; the Alameda-based dialysis center; Alameda HHD
employees, which are CEO and two CDNs; and patients that receive consultation services.
References
16
ALAMEDA HHD BUSINESS PLAN
Brill, A. (2016, March). Economic benefits of increased home dialysis utilization and innovation.
paper_for_release.pdf
Centers for Disease Control and Prevention (2019, March 5). Chronic kidney disease in the
National-Chronic-Kidney-Disease-Fact-Sheet.pdf
edacounty.org/demographicdata?id=238
Healthy Alameda County. (2020b). Chronic kidney disease: Medicare population. Retrieved
from www.healthyalamedacounty.org/indicators/index/view?indicatorId=2056&localeId
=238
Home Dialysis Central (2020). Paying for treatment. Retrieved from https://hemodialysis.org/ho
me-dialysis-basics/paying-for-treatment
Luthi, S. (2019, March 4). Azar: Kidney dialysis needs to move to patient homes. Modern
lysis-needs-move-patient-homes
National Institute of Diabetes and Digestive and Kidney Diseases (2016, December). Kidney
information/health-statistics/kidney-disease
g/atoz/content/homehemo
Rivara, M. B., & Mehotra, R. (2014). The changing landscape of home dialysis in the United
U.S. Centers for Medicare & Medicaid Services (2019). Medicare benefit policy manual:
nd-Guidance/Guidance/Manuals/downloads/bp102c11.pdf
U. S. Renal Data System. (2019). US renal data system 2019 annual data report: epidemiology
USRDS_2019_ES_final.pdf