CostBenefitAnalysis

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COST BENEFIT
ANALYSIS
This document discusses the cost-benefit analysis of employing a nurse
triage services for a self-insured group. The following return on investment
formulas were utilized: Benefit Cost Ratio, Payback Time, Net Benefit and
ROI%
For Nurse Triage
Services for 2011

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Table of Contents
What is a CBA?..........................................................................................................................................1
What is Nurse Triage?...............................................................................................................................1
What is this Document?............................................................................................................................1
Benefits of Nurse Triage................................................................................................................................1
Benefits of Having a Nurse-Triage Service................................................................................................1
The Break Down of these Benefits............................................................................................................3
Managing Company Savings .................................................................................................................3
Self-Insured Group and Employee Savings ...........................................................................................5
Costs of Current Nurse Triage.......................................................................................................................5
Costs of Having a Nurse Triage .................................................................................................................5
Break Down of Costs.................................................................................................................................6
Calls to Nurse Triage .............................................................................................................................6
Translation Fees....................................................................................................................................6
New Locations.......................................................................................................................................7
Cost of Client and Company Follow Up Calls ........................................................................................7
Customer Support.................................................................................................................................8
Company Upper Management .............................................................................................................8
IT Department Charges.........................................................................................................................8
Implementation Team Charges.............................................................................................................9
Cost Benefit Analysis Results ........................................................................................................................9
Benefit Cost Ratio .................................................................................................................................9
Payback Time ........................................................................................................................................9
Net Benefit............................................................................................................................................9
ROI%......................................................................................................................................................9
Conclusion...................................................................................................................................................10

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Introduction
What is a CBA?
A cost benefit analysis (CBA) is an economic decision-making approach to assess a proposed project,
program or policy either in progress or for the future. It involves weighing the total benefits of a project,
program or policy against the total cost of the project, program or policy. After conducting the CBA, the
preparer can see how long the payback for the project, program or policy will be in years.
What is Nurse Triage?
A nurse triage provider is a service that provides workers with a 24/7 access to registered nurses to
facilitate the treatment of work related injuries for a self-insured group.
What is this Document?
This document will showcase the CBA of having a nurse triage service available for employees. It will
showcase a complete list of nurse-triage costs to a self-insured group and its managing company.
Benefits of Nurse Triage
“Benefit” is a term used to measure the willingness of individuals to pay for the outputs of a project in
question. In this document the benefits have a monetary value and reveal the cost of not having a
nurse-triage service available to employees.
Benefits of Having a Nurse-Triage Service
There are many benefits to having a Nurse-Triage service available for employees connected to a self-
insured group. These are listed in Benefits of Current Nurse Triage. Each of these benefits were broken
down by who (the company that manages the self-insured group, the self-insured group or the members
of the self-insured group) it benefits, the cost per unit, the unit used, the average amount of
occurrences for a month, and the total value of the benefit for a single month.
Finally, it provides the Present Value of Benefits or PVB. This value informs a business of how much
benefit they are receiving from having the program for one year.

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Name of Benefit Who Benefits Cost/Unit Unit
Average Amount
of Occurances
per Month
Total Benefit
for Month
Phone Service
The Company Managing
Self-Insured Group
50.00$ per person employed 2 100.00$
Electicity Usage
Self-Insured Group
Water/Sewer
Self-Insured Group
Staff Wages
Self-Insured Group
2,716.67$ per person employed 2 5,433.34$
Staff Insurance
Package
Self-Insured Group
750.00$ per person employed 2 1,500.00$
Payroll Taxes
Self-Insured Group
Training Costs
Self-Insured Group
Extra Computers
Self-Insured Group
Extra Phones
Self-Insured Group
Extra Desks
Self-Insured Group
Supplies
Self-Insured Group
Setup of Work Area
Self-Insured Group
$ 16.88 per hour 3 $ 50.64
Setup of Computer
Self-Insured Group
$ 8.33 per hour 12 $ 99.96
Setup of Phone
System
Self-Insured Group
$ 12.50 per phone 2 $ 25.00
Setup of Account
Self-Insured Group
$ 16.67 per hour 2 $ 33.34
Computer/Misc
Support
Self-Insured Group
16.67$ per hour 6 100.02$
Customer Support
Managers
The Self-Insured Group 0.64$ per minute 4,050 2,592.00$
Translation
Services
The individual Injured
Employee
-$ per item - -$
Self Treatments
Received from
Nurse-Triag Claims
The Self-Insured Group 962.76$ average per claim 67 64,504.92$
Total Cost per
Month
75,348.24$
Present Value of
Benefits (PVB)
904,178.88$
Benefit of Current Nurse Triage Services
AdditionalSupportCostsnot
Needed
AdditionalSupport
forInjured
Employees
AdditionalServices
NotNeeded
AdditionalStaffCosts
Saved
AdditionalMaterialsNot
Needed

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According to the table, the PVB is $904,178.88. The majority of time the individuals that benefited the
most is the self-insured group due to the self-treatment costs for the year. This amount that the self-
insured group saves by employing the nurse triage group is $774,059.04.
The Break Down of these Benefits
Managing Company Savings
Why Only Two?
According to this document, there would only be two additional hires added to the staff for the
managing company to take the extra call volume. This value may change depending on the needs of the
self-insured groups. Currently, a nurse-triage call is approximately 18 minutes in length; with a Spanish
translation call at approximately 21 minutes and an English call approximately 15 minutes in length. The
number of additional employees needed was decided on after calculating that the average number of
calls added per hour would be three and the average time spent on these calls would on average total
54 minutes. Therefore, the members currently with the managing company and two additional
employees are based on the self-insured nurse triage bill analysis. Additional employees may be needed
as the managing company grows and adds new self-insured groups.
Additional Services Not Needed
Phone Services
At present, the bill for land-line phones is $1,550.00 a month. There are thirty-one employees located in
the managing company’s building. On average, each employee’s phone line costs $50 each month. If
two extra employees are hired, this would be an additional $100 a month spent on this service; this does
not include additional charges for installation of a phone.
Electricity Usage
Currently, the bill for the electrical usage is $2,723.34 a month. Therefore, the average cost of each
employee at the managing company is $87.85 a month for energy. If the managing company adds two
new employees, it will cost an additional $175.70 a month.
Water and Sewer
Presently, the bill for water and sewer is $360 a month and on average the managing company’s
employee costs $11.62 a month. Once two members are added to the team, this would mean that an
additional $23.24 is spent a month on water and sewer.
Additional Staff Costs Saved
Staff Wages
At the moment, the average employee at the managing company gets paid $2,176.67 a month. If two
more employees were hired, the cost of wages rises to an additional $5,433.34 a month.

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Staff Insurance Package
At the moment, each employee at the managing company offers $750 to go to insurance and other
medical needs a month. Two more employees would cost an additional $1,500 a month.
Staff Payroll Taxes
Payroll taxes help to cover Social Security and Medicare. Currently, the managing company pays 6% of
this tax. Since the additional employees would have a salary of $2,716.67 a month; the additional payroll
tax would be $163.00 per person. This means each month there is an additional $326 that goes towards
payroll taxes.
Training
Training for the staff occurs twice a month on new best-practices, software updates, insurance
providers, medical language, insurance language, etc. These cost $38 per person on average each
session. Therefore, it costs the company an additional $76 for the new hires.
Additional Materials Not Needed
Extra materials such as computers, desks, phones and supplies are broken down into their monthly costs
over a 12 month period.
1. Computers typically will cost $1,100. If this is spread out over a 12 month period, the cost is
$91.67 a month. For two, this is $183.34 a month.
2. A single multi-line phone costs $140.00, spread over 12 months; this comes to $11.67 a month.
For two new hires, this is $23.34 a month.
3. Additional desks cost $500 each; split up over 12 months, this comes to $41.67 each month. For
two new employees this is an additional $83.34 a month.
4. Supply orders each month are approximately $280, with thirty-one employees, this cost comes
to $9.03 a month per employee. This means there would be an additional $18.06 for two new
hires.
Additional Support Costs Not Needed
Setup of Work Space
To set up each additional work space (cubical setup), it costs the company $135 an hour. Each setup
takes 1.5 hours. Spread this cost of a 12 month period, the company would spend an additional $33.76
for two cubical setups.
Computer Setup Time
To set up each computer takes the consultant approximately six hours. This costs $100 an hour.
Therefore, if this cost is spread out for 12 months, then the additional cost would be $99.96 for two
computers per month.
Setup of Phone System
To set up each phone takes the phone provider approximately half an hour. This costs the company
$150 for each set up. If this cost is spread out over 12 months, the additional costs would be $25 a
month for additional employees.

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Setup of Account and Support
The setup of an account needs to be provided by the IT staff; which is part of a sister company. The IT
company charges approximately $200 an hour for software support and setup. Therefore, if it takes 2
hours for setup, the additional costs would be $33.34 for two additional employees per month. If each
employee on average needs 3 additional support from the IT company a month, then the cost would be
another $100.02 for two additional hires. This would total $133.36 a month.
Self-Insured Group and Employee Savings
Additional Support for Injured Employees
Customer Support Managers Additional Costs
At this time, it takes approximately 15 minutes to enter a claim into the software system that did not go
through the nurse-triage service. These are entered by the managing company’s support management.
Their approximate billing value is $38 an hour. Each minute is worth $0.64 and there are approximately
270 claims each month that need to be entered into the software system. Therefore, this additional cost
would be $2,592 a month
Translation Services
There would be no cost of having a translation service at this time.
Self-Treatments Received from Nurse Triage
On average the nurse triage receives 67 self-treatment incidences a month. During these calls, the
nurses assess whether a person needs to go in to the hospital or just use first aid. Self-treatments are
just first aid directions and the call remains an incident instead of a claim on the insurance. If the nurse-
triage did not provide this service, these 67 incidences would become claims, which each medical claim
costs on average $962.76. This includes urgent care/emergency room, doctor and other medical need
costs. Therefore, without the service, the cost to the self-insured group would be approximately
$64, 504.92 a month or $774,059.04 a year.
Costs of Current Nurse Triage
“Cost” is a term used for the total expenditures that affect all parties involved in a project. When
running these values, it is important to see all the values that are necessary; regardless of how little the
monetary value is. Most of the values that are used in this section are called “activity based values.”
These values can mean the billing rates of employees that are going to directly work on the project in
study.
Costs of Having a Nurse Triage
There are many costs of having a nurse triage service available to the self-insured group. The following
table represents the costs by who incurs the cost, the cost per unit, the unit used, the average
occurrences for a month and the total value for a single month.

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Finally, it provides the Present Value of Costs or PVC. This value informs a business of how much the
program costs per year.
Break Down of Costs
Calls to Nurse Triage
A single call to the nurse triage service, over the years of 2005 through 2011, cost on average $72.67.
There are approximately 382 calls made a month. Therefore, the cost is $22,891.05 a month on
average.
Translation Fees
Of an employee needs to have their call translated, this service costs the group $1.69 per minute. On
average there are 2,988 minutes used for translations a month. Therefore, the cost for translation fees is
$5,049.72 per month.
Name of Cost Who Incurs Cost Cost/Unit Unit
Average Amount
of Occurances
per Month
Total Cost for
Month
Call to Medcor (All Calls) Self-Insured Group $ 72.67 per person employed 315 $ 22,891.05
Translation Fee Self-Insured Group $ 1.69 per person employed 2,988 $ 5,049.72
Customer Support
Follow Up Calls
Self-Insured Group $ 5.00 per follow-up call 764 $ 3,820.00
Customer Support
Managers
Self-Insured Group $ 6.34 per claim 382 $ 2,421.88
New Location Fee Member $ 5.00 per person employed 81 $ 405.00
Cost to Client Member $ 2.89 per person employed 382 $ 1,103.98
Follow up Calls Member $ 1.20 per person employed 764 $ 916.80
Company's
Management
Managing Company $ 50.00 per minute 12 $ 600.00
IT Consultant Firm Managing Company $ 189.00 per hour 16 $ 3,024.00
Implementation Team Managing Company $ 300.00 per hour 8 $ 2,400.00
Total Cost per
Month
$ 42,632.43
Present Value of
Costs (PVC)
$ 511,589.16
Cost of Current Nurse Triage Services

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New Locations
Every new location that is added to the group is also added to the nurse-triage. Each of these new
locations cost $5 to add. On average there are 81 new locations added each month. Thus, this costs the
group $405 a month on average.
Cost of Client and Company Follow Up Calls
The table, “Average Hourly Wages of Self-Insured Employees,” identifies the average amount of hourly
wages an employee in the group receives. This value includes all part-time and full-time employees.
The table, “Cost to Client for a Nurse-Triage Phone Call,” calculates out the cost of the initial call to the
nurse-triage service. Each call is on average 18 minutes. Each call needs to have the manager and the
injured employee. This takes up approximately 30% of each employee’s time, thus costing the
store/restaurant $2.89 per call. There are approximately 382 calls made each month, thus it costs the
members $1,103.98 each month to have the service.
The table, “Cost to Client for Managing Company’s Follow Up Call,” reveals the cost to the client for the
follow up call that is made by the managing company. This call is mandated by the self-insured group.
This call averages 15 minutes in length. On average, there are two follow-up calls per submission/claim.
Payroll for Self-
Insured Group
# of Employees
Average Salary for a
Year per Employee
Average Salary for
a Week per
Employee
Average Salary for
a Day per
Employee
Average Salary
for a Hour per
Employee
$ 1,500,000,000.00 150,000 $ 10,000.00 $ 192.31 $ 38.46 $ 4.81
Average Hourly Wages of Self-Insured Employees
Average Call Length to
Nurse-Triage (in
minutes)
Number of Minutes in
an Hour
Average Proportion of
an Hour that a Single
Employee will be on
Phone with Nurse-
Triage
Average Amount
of Salary not Used
by Client
Number of
Employees
Needed for Nurse
Triage Call
Amount of
Salary Lost to a
Call to Nurse
Triage
18 60 0.3 $ 1.44 2 $ 2.88
Cost to Client for a Nurse-Triage Phone Call
Average Length of Call
from Company to
Client (in minutes)
an Hour
Employee will be on
Phone with Nurse-
Triage
Average Amount
of Salary not Used
by Client
Number of
Employees
Needed for
Follow Up Call
Amount of
Salary Lost to a
Follow Up Call
15 60 0.3 $ 1.20 1 $ 1.20
Cost to Client for Managing Company's Follow Up Call

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If each call costs $1.20 and there are 382 claims/submissions to the service a month, this means it costs
the client $916.80 per month on average.
Therefore, the final cost to the clients each month is $2,020.78 on average.
Customer Support
The table, “Cost to Self-Insured Group for Follow Up Calls,” identifies the cost per call that is billed to the
self-insured group. This cost is $5 per follow up call. There is on average 382 claims per month and each
of these on average takes two follow up calls. This means that on average the self-insured group spends
$3,820 for this additional support.
The table, “Cost to Self-Insured Group for Support Manager’s Review,” calculates the cost per
claim/incident that is reported to the service. There are approximately 382 claims/incidences a month
and each claim costs $6.33 to review. Therefore this additional support costs the self-insured group an
extra $2,421.88 a month on average.
Therefore, the total additional charges that self-insured group pays on average are $6241.88 a month.
Company Upper Management
Upper Management at the managing company spends approximately 3 hours a week collaborating with
the support staff on nurse-triage issues. The hourly billing rate is $50. Thus the cost of these extra
meetings is $600 a month on average. This cost is absorbed by the managing company.
IT Department Charges
The IT Department is a sister company of the managing company. To use the IT’s services, the managing
company is charged for the assistance. This cost is on average $189 an hour. The managing company on
average has 16 times a month that they will need this assistance. This assistance might include
computer set-up, hardware issues, printer solutions, phone complications, network upkeep, etc.
Therefore, it costs an additional $3,024.00 a month on average.
Average Length of Call
from Company to
Client (in minutes)
an Hour
Employee will be on
Phone with Nurse-
Triage
Amount Billed per
Hour
Number of
Employees
Needed for
Follow Up Call
Amount Billed
per Call
15 60 0.3 $ 20.00 1 $ 5.00
Cost to Self-Insured Group for Follow Up Calls
Average Length of
Time for Review (in
minutes)
an Hour
Employee will be on
Phone with Nurse-
Triage
Amount Billed per
Hour
Number of
Employees
Needed for
Follow Up Call
Amount Billed
per Call
10 60 0.2 $ 38.00 1 $ 6.33
Cost to Self-Insured Group for Support Manager's Review

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Implementation Team Charges
The Implementation Team is a section of the IT Department. The IT Department is a sister company of
the managing company. This company works on any software programming issues, data analysis, server
upkeep, etc. This service costs $300 an hour. Therefore, it costs the managing company an additional
$2,400 a month for 8 hours of work.
Cost Benefit Analysis Results
The most important and difficult parts of a Cost-Benefits Analysis is finding the PVC and PVB. Once,
there are determined, the benefit cost ratio, payback time, net benefit and ROI% can be calculated. The
following table represents these values.
Benefit Cost Ratio
The benefit cost ratio is the comparison of PVB divided by PVC. This value is the dollar representation of
returns for every $1.00 invested in the project. For the nurse triage services, this dollar value is $1.77
per dollar invested. Each year this value would need to be recalculated, since the averages used in the
calculations are fluid depending on the month and year.
Payback Time
The payback time is a calculation made to discover how long, in years, it would take to break even if the
project is implemented. This is found by taking the PVC and dividing it by the PVB. The results of this
report showcase that it would take seven months to break even with the amount the nurse triage
service costs in 2011. Each year this value would need to be recalculated, since the averages used in the
calculations are fluid depending on the month and year.
Net Benefit
The net benefit demonstrates the benefit after considering the cost. This is found by finding the
difference between the PVB and PVC. In the case of the nurse-triage service, the service will yield
$392,589.72 in benefit after considering the cost. Each year this value would need to be recalculated,
since the averages used in the calculations are fluid depending on the month and year.
ROI%
ROI is an acronym that stands for Return on Investment Analysis. The ROI% demonstrates the
percentage of return for every dollar invested when considering cost. This is calculated by dividing the
For Year
Present Value of Cost (PVC) 511,589.16$
Present Value of Benefit (PVB) 904,178.88$
Benefit Cost Ratio (BCR) 1.77$
Payback Time 0.57
Net Benefit 392,589.72$
ROI% 76.7%
Cost Benefit Analysis

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net benefit by the PVC, then multiplying by 100 for a percent. In the nurse triage service implementation
project the ROI% equals 76.7%. This means that the service with yield $0.77 for every dollar invested
when considering cost. Each year this value would need to be recalculated, since the averages used in
the calculations are fluid depending on the month and year.
Conclusion
In conclusion, the present value of cost for the nurse triage service is $511,589.16; whereas the present
value of benefit is $904,178.88. The payback for the current expenses of the service will be seven
months. Each year a CBA should be conducted, since the averages used in the calculations are fluid
depending on the month and year.

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