The doctor will see you now... at your office; Workplace clinics making a resurgence
Rebecca Vesely
May 30, 2011
Employers are increasingly getting into the business of providing direct healthcare to their workers through on-site clinics after a several-year hiatus when the deep recession and uncertainty about national health reform made most of them gun-shy.
Just in the past six months, experts say, large to mid-size employers—and even some smaller companies—have dusted off previously shelved plans to launch clinics at the workplace where employers can receive primary and sometimes specialty care.
Technological advances, including electronic health records and telemedicine, have made the prospect cheaper and more appealing for employers that seek to promote wellness and prevention within their walls.
What’s more, some employers are jumping into the fray in order to lock down providers that will exclusively serve their workers in advance of 2014, when federal health reform is expected to extend access to millions of Americans who are now uninsured, potentially triggering a provider shortage.
“Healthcare reform coincided with the recession,” says Mike La Penna, principal of La Penna Group, a healthcare consulting practice based in Grand Rapids, Mich. “Employers were committed to the idea of workplace clinics, but they needed to find out how all these factors would impact them. Workplace clinics are sensitive to utilization and with workforces fluctuating during the recession, the business case became softer.”
The resurging trend also reflects impatience about the delivery system, according to experts.
“It expresses dissatisfaction that the delivery system is not doing what it is supposed to do,” says Dr. Bruce Hochstadt, partner at the consulting firm Mercer and national work site health practice lead.
Workplace clinics have been around for decades, largely serving as occupational health centers for manufacturers. All that has changed in the past five years, as more employers seek to build clinics as hubs for wellness promotion—providing primary care, pharmacy, specialist care or referrals, and even physical therapy, nutrition counseling, fitness and acupuncture.
“A lot of our clients view these clinics as a reminder that we do have a culture of health,” Hochstadt says. Some even shun the term ‘clinic,’ preferring to call the on-site care a “healthy living institute” or a “wellness center,” he adds.
Take Cisco Systems’ LifeConnections Health Center, located at the information technology giant’s San Jose, Calif., headquarters. The center opened in 2008 and offers primary-care, laboratory and radiology services, a Walgreens pharmacy, vision care, chiropractic medicine, disease management and other services. A fitness center and day-care center serving 400 children are also on-site.
“We have a primary-care model of a medical home that is extended to include acupuncture, mental health services and health coaching,” says Sharon Gibson, director of the healthcare practice at Cisco. “Ours is an attempt to get employees engaged.”
The clinic serves employees and their families, who have insurance through one of three health plans. Kaiser Permanente has a physician and support medical staff on-site at the clinic, while employees with Cigna or UnitedHealthcare plans see other on-site providers. The clinic therefore uses two separate EHR systems depending on the insurer.
Employees can use online scheduling to book appointments and are alerted via e-mail when appointments are about to start, resulting in a less than five-minute wait to see a provider, Gibson says.
Cisco has 17,000 employees in the Bay Area, and a total of 45,000 covered lives. The company expected between 25% and 30% of those covered to use the clinic. As of early May, the rate was 43%, she says.
Cisco has seen a drop in pharmacy costs, but declined to elaborate. The company plans to look at the return on investment in several years, but Gibson says it is on track with cost and performance measures. One important component is boosting productivity among the workforce by making care easy and accessible, while promoting wellness and prevention. “That was part of the value proposition,” Gibson says.
Hochstadt of Mercer says that if done properly, workplace clinics can save employers real money. For every dollar spent, employers can see $1.50 to $1.60 in savings, he says. Some of those savings might come in the form of employee retention, higher productivity or other “soft dollars,” he says. “For each employer, there are different value points.”
Employee surveys at Cisco show that 83% of workers view the clinic as a valuable benefit, while 80% reported higher productivity and less time away from work from using the clinic. And 78% of those who have used the clinic report a less than 10-minute wait to fill a prescription written by a provider at the center.
In the meantime, Cisco is expanding its use of telemedicine to reach employees at other locations and to connect San Jose-based workers to specialists.
Cisco offers primary-care remote visits to workers in Raleigh-Durham, N.C., the company’s second-largest campus in the U.S. Using headsets, high-definition cameras and high-tech listening devices, physicians in California can offer patient visits to workers in North Carolina. The physician doing the exam is licensed to practice medicine in both states.
Also, Cisco is launching a dermatology pilot program in telemedicine for San Jose-based patients in August. The LifeConnections Health Center doesn’t currently offer any specialty care, so Cisco is testing a referral program with a Bay Area hospital using high-definition cameras. The primary-care physician at the clinic will share an image, showing perhaps a skin lesion, with a dermatologist, who will then decide whether the patient requires an in-person visit.
“Right now, the wait time in the Bay Area to see a dermatologist is three to four weeks,” Gibson says. “We see this as a huge opportunity to make dermatology more available to our employees.”
Accessibility to providers is a concern for employers these days, says Larry Boress, president and CEO of the Chicago-based Midwest Business Group on Health. The business coalition, in partnership with the La Penna Group, announced in May that it is forming the National Association of Worksite Health Centers to allow employers to share best practices on work site health.
“With an additional 32 million Americans getting access to health coverage in the coming years, primary care will be at a premium,” Boress says.
Hochstadt agrees. “It would flood an already overstressed system,” he says of expanded access to the nation’s uninsured and underinsured via federal health reform. “We see this as a real catalyst for employers to expand or accelerate their plans for workplace health.”
Some providers are drawn to on-site clinic care because they don’t have to deal with overhead or billing multiple payers and can get a chance to know their patients better. Typically, office visits are longer, too, Boress says. At Cisco, an office visit may be as long as 30 minutes or more.
Gibson says Cisco has had no problem recruiting providers; the issue has been finding the right fit. “The real challenge is making sure they are the type of person that wants to do comprehensive as opposed to episodic care,” she says.
Other employers are very concerned about a possible primary-care or specialty-care shortage related to federal health reform.
Quad/Graphics, a commercial printing company based in Sussex, Wis., operates five on-site clinics for its 20,000 workers and their dependents through its subsidiary QuadMed. QuadMed also provides on-site or near-site clinics to other employers, including MillerCoors and Northwestern Mutual Life Insurance Co.
John Neuberger, vice president of operations at QuadMed, says accessing primary-care providers in rural areas is already a problem.
“We do think there will eventually be a serious shortage of providers,” he says. “If we don’t manage that, it will have a serious impact on productivity. It’s a big deal for us to make sure we are caring for our employees. In smaller markets, it is a crisis.”
Quad/Graphics workers pay a flat fee of $8 per clinic visit. Workers get incentives to participate in on-site wellness programs in the form of reduced health insurance premiums. Today, Quad/Graphics has been able to keep its healthcare costs at 31% below its expected benchmark because of such programs. “It’s a major competitive advantage to us.” Neuberger says.
Like Cisco, QuadMed is expanding its use of telemedicine to reach employees at sites that don’t have on-site clinics and to address any immediate or long-term provider shortages. Three of Quad/Graphics’ clinics now offer nurse consultations to workers at other geographic locations. “Not everyone has access, so that’s our challenge for the next two years,” Neuberger says. “A lot of employers are jumping on this right now.”
A shortage of primary-care providers is prompting more employers to get into the business of on-site clinics, says Tracey Moran, marketing director for Marathon Health, which offers turnkey on-site clinics to employers. The Burlington, Vt.-based company has seen employers with as few as 200 workers express interest in the clinics.
As a result, more smaller and mid-size employers are exploring a shared-service model, with two or more businesses in nearby locations setting up a clinic together and sharing the access and the costs, Moran says. In May, two employers in Lincoln, Neb., announced an agreement to share a clinic set up by Marathon Health. Lincoln Industries, a metal finishing company, has about 450 employees, while nearby IMSCorp, an industrial manufacturer, has 200 workers.
The two companies see the clinic, dubbed Healthy U, as a medical home that will improve employee health and lower costs. “Opening the health center is the next step in our long history of wellness initiatives,” Tonya Vyhlidal, wellness/life enhancement director at Lincoln Industries, says in a statement.
La Penna says the shared-service model is an important trend because it opens up the on-site clinic concept to more employers, but that sometimes differences between the participating employers are too wide for the model to be successful.
In one case, a deal fell apart when a small manufacturer and a nearby retailer could not work out their differences over staffing, financing and other issues.
“We found too many governance issues,” La Penna says. “And there were cultural barriers we could not have predicted.”
Still, such pitfalls are unlikely to deter employers in the years to come, experts say.
“It’s more than just about getting a dollar return,” Boress says. “It’s about keeping people more engaged, compliant with their medicines and involved in their care.”
Crain Communications, Inc.