Evaluation of the consumer - directed care initiative - Final Report

9.2 Provider set-up costs

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CDC providers reported that they collectively spent approximately $1 million in 2010-11 to develop and implement CDC within their organisation.²⁵ Set-up costs were not funded by the Department, and were met by providers themselves.

For CDC, the average set up costs per CDC package was approximately $2,275 per package in 2010-11 (the period when the first round of packages were allocated to providers). The main cost items related to planning and to the development of modification of internal systems and processes.

CDRC providers reported that they collectively spent approximately $200,000 in 2010-11 to develop and implement CDC within their organisation. The average set up costs per CDRC package was approximately $1,098 per package. The main cost items related to planning, participant recruitment and development of information and other resources.

This is illustrated in the table below.

Table 43: Estimated average set-up costs per CDC package incurred by CDC providers, 2010-11

	Staffing	Non-staffing	Total
Planning	$556	$28	$583
Development or modification of systems (e.g. IT systems) and processes	$372	$45	$417
Development of information and other resources	$242	$26	$269
Participant recruitment	$167	$10	$177
Training and skills development	$272	$20	$293
Other	$366	$169	$536
Total	$1,976	$300	$2,275

Based on data provided by 35 organisations, encompassing 441 packages allocated to those providers
Source: 1^st CDC provider data collection (April-June 2011)

Table 44: Estimated average set-up costs per CDRC package incurred by CDRC providers, 2010-11

	Staffing	Non-staffing	Total
Planning	$246	$5	$251
Development or modification of systems (e.g. IT systems) and processes	$71	$20	$91
Development of information and other resources	$126	$20	$147
Participant recruitment	$170	$12	$181
Training and skills development	$82	$50	$132
Other	$242	$55	$297
Total	$937	$161	$1,098

Based on data provided by 13 organisations, encompassing 170 packages allocated to those providers.
Source: 1^st CDRC provider data collection (April-June 2011)

It should be noted that these set-up costs are unlikely to be incurred if the initiative is rolled-out further. ‘Planning’ costs, for example, are unlikely to be incurred at the same level, given providers would have largely developed their approach to CDC and CDRC and are likely to be only refining their approach over time. However, there will reach a point where providers will need to invest in systems development to automate many of the processes that are being completed manually currently (such as preparation of monthly statements). This will represent additional one-off costs that are not reflected in the figures above.

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25. Based on 35 organisations who submitted data for the April-June provider data collection. Refer to Appendix B for a breakdown of costs incurred.

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