There was a time when the jobsite clinic was a band-aid station, a place to assess work-related injuries and get people back to work. These clinics were just marginal players in the health care system, but that’s changing. And the latest generation of clinics has the potential to upset existing relationships and systems.
Hospitals with strong primary care relationships or who employ a large percentage of the PCPs are particularly well positioned to respond to this trend. These organizations should be able to strengthen their relationships with employers, increase their capacity to manage care, and increase their share of the private insurance market by aggressively pursuing employer-based clinics.
In this article we’ll review the evolution of these clinics and the implications and opportunities for providers.
Clinic Evolution
Self-funded employers are rapidly expanding the scope of their clinics. Employers have come to understand that the most avoidable healthcare spending stems from chronic conditions and overuse of high-cost healthcare. By offering more services directly to employees, they are cutting out the middlemen and asserting great influence over utilization decisions. In the process, they are slowly changing the focus from illness care to employee health. And if managed correctly, employees like the new clinics as well.
Cost savings are proving worth the effort. Pitney Bowes states that for every $1 it spends on its clinics, it saves $1 in healthcare costs and gains another $1 in increased productivity. Within three years of implementing on-site clinics, PB experienced a 26% reduction in ER visits for diabetics and 62% reduction in avoidable hospital admissions for asthma patients. Peter Hotz, president of TakeCare Health Systems, a Walgreens company, said employers generally find a $2-$4 ROI for every $1 spent on clinic expenses.
Results such as these are driving acceptance. A 2009 national survey of US companies by Watson Wyatt and the National Business Group on Health found 29% either offer or plan to offer an on-site clinic. The research firm Fuld & Co. has projected that the number of on-site clinics will grow from a current count of 2,200 to 7,000 by 2015, and will serve about 10 percent of the US population under age 65.
These new and improved clinics are patient-focused primary/urgent care centers, some able to provide most all routine procedures, from basic blood work to ultrasound. The mix of services, varying from clinic to clinic, includes:
• HRA’s, Health Improvement Plans, and Wellness Programs
• Occupational Medicine
• Acute, urgent, and preventive care
• Annual physicals and screenings
• Pharmacy services and drug UR
• Routine Lab and X-ray
• Physical Therapy
• Chronic Disease Management
• Dental and Eye Care
And an added benefit for everyone is ease of administration. There are no forms to fill out, no claims disputes and no eligibility problems. The focus is exclusively on delivering efficient care to patients.
Implications and Opportunities
There are clearly threats of being on the outside of this evolution. The workplace clinics have the potential to pre-empt existing patient-doctor relationships. The hospital could lose revenue as sick care is reduced. Non-participants might be left with the sickest patients and government payers. Specialists may find referral patterns altered and patient volume reduced, and patient severity increased.
At HSG, we see three principle advantages to helping employers develop such clinics. First, by helping employers address this opportunity, you position your organization to be their partner for healthcare issues, rather than just being a vendor. That preferred status will position your organization to gain share in the lucrative private insurance market.
Second, and just as important, your organization will expand it capabilities in managing care efficiently. The focus on care of chronic patients and health improvement will provide invaluable insights, insights that can be applied to all your patients.
A third advantage to pursing this opportunity is tactical: if you do not do it, someone else will. Health insurers and a variety of entrepreneurial firms are interested in inserting themselves into this market. Their success may create challenges for your hospital.
With the advent of healthcare reform, we believe it is crucial that providers initiate an open dialogue with large employers, learn about their top health care concerns, and begin discussions about how providers might help them to achieve their goals. Such direct relationships will produce value for your organization in the long term, at least as long as employers have a role in healthcare coverage.
