A tough business climate amid the likelihood of health care reform may require some employers to reconsider proposals and services for onsite health clinics.
Historically, employers have lauded onsite clinics because they provide convenient venues for employees to receive basic medical treatments without straying too far from the worksite. In addition, clinics are educational hubs for workers to learn more about medical services covered under the company's health plan.
Waiting on reform
Health care reform has crept into employers' thinking on onsite health clinics. Some embrace a wait-and-see approach on setting up a medical clinic, reasoning that it's better to see what health reform will look like and how it might affect health benefits before making such a huge investment.
On the other hand, since reform will most likely entail employers taking on more responsibility for providing health care benefits, some employers believe that an onsite clinic will give them better control over health benefits, provisions and outcomes, says Dr. Bruce Hochstadt, who leads Mercer's worksite clinic consulting group.
According to Mercer's 2009 "National Survey of Employer-Sponsored Health Plans," which surveyed 2,914 employers of all sizes, more than one-fourth of large employers (27%) offer an onsite or near-site medical clinic for occupational health services, while 11% of large employers provide a clinic for primary care services.
In the fourth quarter of 2008, "we saw among our client base a noticeable drop in requests for feasibility analyses on onsite clinics. In midstream, some employers said, 'Let's put the brakes on this,'" recalls Hochstadt, adding that they were uncomfortable in making a capital investment in assessing the feasibility of an onsite clinic, given the state of the economy. "It was a direct reflection of the impact of the economy on their business," he notes. Some companies also wanted to learn how they could make their clinics more efficient from a cost standpoint. However, by the first quarter of 2009, Hochstadt noticed rapid interest among employers seeking data about onsite clinics.
Turn the clinic into a medical home
Highmark, Inc., a Pennsylvania-based health benefits insurer, launched two onsite health clinics in November 2009 - one in Camp Hill and the other in Pittsburgh.
Despite the recession, the company continued to more forward in building two onsite clinics, a project costing about $500,000. Rich Little, vice president of compensation and benefits at Highmark, Inc., says the cost was worth it, considering that some medical claims can fall into the half-million-dollar range. Approximately, 10,000 employees are eligible to use the clinics.
"We estimate that the company will save a couple of thousands dollars in the first year on health care services," adds Little, explaining that a study by the Rand Corp. shows that onsite and retail clinics can provide services at a cheaper cost than a primary-care office or an urgent-care center - possibly by 30%.
Little also sees the clinics as playing a major role in offering rehabilitation services to employees who have returned to work after undergoing surgery. "Physical therapy can be one of those things that can cause an employee to take quite a bit of time off. We are trying to decrease that time they need to take off, thus improving productivity savings," Little says. "From an economic standpoint, we also feel that it's our responsibility as a health insurer to test this type of initiative."
Most employers realize that whatever economic pressures they are facing now are not going away for awhile, says Peter Hotz, president of Take Care Health Employer Solutions, a provider of worksite health and wellness centers. "The longer companies hold out on instituting an onsite clinic, the more opportunities they will miss on containing health care costs both in the short- and long-term run," Hotz adds. His company operates Highmark's health clinics.
In March 2009, Stacey Nelson, health care delivery manager at Sprint Nextel Corp., delivered a presentation on the company's two onsite health clinics during a conference sponsored by the National Business Group on Health.
Employers recognize that they might run into some financial challenges to sustain the clinics during tough times, "but there is such great value in providing the services offered by a worksite clinic," said Nelson.
Sprint Nextel's experience
The wireless communication firm operates two onsite clinics - one in Overland Park, Kan., which opened in 2005, and the other in Reston, Va., which opened in 2008. Nelson explained that the Overland Park clinic opened at a time when there were not that many urgent-care facilities in the area. The worksite at Overland Park employs about 10,000 employees, and the Reston campus about 3,000 workers.
To help relieve some of the financial burden, the company scaled back the hours of the clinics and also is considering a partnership with another employer that has an interest in an onsite health care. "We want to make sure that we do everything possible to keep the clinics," Nelson said. The onsite clinics have saved the company money on health care costs by reducing ER visits, urgent-care usage and avoidable hospitalization.
Still, she noted that "once you turn the clinic into a medical home staffed by a primary care physician, your utilization will probably increase dramatically, thus you have to ask yourself whether you have the resources to sustain such a clinic." The Sprint clinics are for urgent care and are not there to serve as a medical home. "It is a place that offers lab work, physical exams, and physical therapy services," Nelson said. "Workers should really try to establish a relationship with their primary-care physicians."
In a tough economy, an initial clinic approach should probably employ midlevel practitioners, such as a nurse practitioner or a physician assistant, because they are most cost-effective when rendering basic medical services, explains Mercer's Hochstadt.
