As healthcare costs keep rising, on-site health clinics are trending upward as ways to cut costs and give workers easier access to quality care.
By Mark McGraw
Like a lot of people, Steve Heisler has allergy issues.
For Heisler, staff vice president of compensation and benefits with packaging products and services provider Sonoco Products Co., irritants such as dust, pollen, ragweed and cat hair give him fits.
In the past, he had gone for once- or twice-weekly allergy shots at a local immunization center located about five miles away from Sonoco's Hartsville, S.C., headquarters to help keep his allergies under control.
The process, however, didn't exactly mesh with the demands of his work schedule.
"The center was only open for allergy injections on Mondays and Thursdays from 9 a.m. to 11:30 a.m., and 1:30 p.m. to 4:30 p.m.," says Heisler. "I was typically out of the office for at least an hour, sometimes an hour and a half."
Since July 2012, however, he has been receiving those shots at Sonoco's on-site health clinic, where a range of health and wellness services are available to Heisler and the approximately 1,400 other employees based at the global packaging company's Hartsville campus.
The Sonoco Health Connection features four exam rooms, a treatment and procedure room, and a health-and-wellness community room, and is manned by a staff that includes a nurse practitioner, medical assistant and health coach. The 3,600-square-foot facility – managed by CHS Health Services, a Reston, Va.-based provider of workforce healthcare -- also offers professional advice on such things as eating habits, stress management and smoking cessation, as well as counseling for chronic conditions such as diabetes, cardiovascular disease, migraines and asthma.
For Heisler, the health center -- which opened its doors in October 2011 -- has been a faster, more convenient alternative to his previous routine.
"I can go to the on-site clinic between 7 a.m. and 1 p.m., or between 2 p.m. and 5 p.m.," he says.
For example, "I stopped at the clinic on my way into work at 7:50 a.m. this morning," says Heisler. "I walked in, had my allergy injections, waited the required period to make sure I didn't have a reaction, and was at my desk a few minutes later."
At a growing number of companies such as Sonoco, the desire to provide this type of convenient, comprehensive healthcare to employees -- and, in some cases, their families -- has HR and benefits leaders looking -- more now than ever -- to on-site health clinics to help workers gain easier access to healthcare, be healthier and more productive, and help their organizations contain ever-escalating healthcare costs.
New York-based Mercer's 2012 National Survey of Employer-Sponsored Health Plans, for example, polled 131 employers of varying sizes, finding 30 percent of companies with 500-or-more employees offering an on-site or near-site health clinic for occupational-health services, primary care services or both. The study also found the number of worksite clinics among employers with 5,000 or more employees rising from 32 percent to 37 percent over the past three years, with another 15 percent of employers in that size range considering implementing a clinic within the next two years.
Why? Eighty-two percent of respondents offering either of the two types of clinics indicated "reducing lost employee productivity" as their most important objective.
Many employers are also trying to encourage employee use of the clinics by helping them with the costs. Forty-eight percent of employers reported waiving co-payments to boost clinic utilization, and another 22 percent said they offer reduced co-payments.
Towers Watson's 2012 Onsite Health Center Survey Report yielded similar results. In the poll of 74 employers representing 1.7 million employees, 62 percent of respondents with a worksite clinic reported "increased productivity" as the primary reason for providing on-site care.
Reining in healthcare expenses is still a priority, of course, with 75 percent of Mercer respondents citing "increasing control over overall health spend" as their chief objective, and 56 percent of Towers Watson participants specifying "control and reduction in medical costs" as their goals.
The aforementioned factors are inexorably linked, says Bruce Hochstadt, senior leader of Mercer's health and productivity management practice.
"We do see a constellation of common drivers" in companies' decisions to implement clinics, he says. "A lot of times, it's about improving convenience and access to care for employees, and with that goes hand-in-hand a vehicle to reduce absence and drive productivity."
Expanding the Scope
The on-site health clinic is not an entirely new concept, of course.
Mercer's aforementioned survey finds a majority (58 percent) of respondents with clinics indicating their on-site centers are more than five years old. Among employers with 10,000 or more employees, however, 13 percent have a clinic that is less than one year old, and another 15 percent said their on-site health center is between one and three years old.
Why are more clinics popping up at large companies? Economics certainly play a key role, as big companies are more likely to have the capital to invest in a worksite clinic, and the slow economic recovery may be putting more pressure on employers to make a smaller workforce more productive, says Hochstadt.
On-site centers -- both new and existing ones -- are offering a broader scope of services as well. According to Mercer's research, 90 percent of clinics offer biometric screenings, with 87 percent also providing immunizations. Seventy-five percent of clinics also deliver urgent care (other than workplace injuries), and 61 percent offer chronic disease management. Pharmacy services and laboratory tests are both now offered at 35 percent of clinics, according to the survey, with another 21 percent providing mental health or employee-assistance program counseling in their clinics.
BMW Manufacturing Co.'s Greer, S.C. manufacturing plant had been home to an on-site pharmacy -- run by Walgreens -- since 2005, says Camille Reams, manager of health and productivity at BMW Manufacturing Co.
In January 2013, the pharmacy was relocated to BMW's new Associate Family Health Center at the Greer campus, where BMW employees and their families have access to services including physical exams, chronic disease management, dental, vision, physical therapy, high blood pressure management and personalized health coaching. The 25,000-square-foot facility -- located about two miles from the campus's main entrance and independently managed by Walgreens Take Care Health Systems -- also hosts a laboratory for medical testing, digital X-rays, biometric screenings and mobile mammography, says Reams.
The success of the on-site pharmacy helped make the case for adding the new health center, and offering a wider array of services, adds Bill Raulerson, director of site operations with Walgreens Take Care Health Systems.
For example, "we started a diabetes management program in the pharmacy that was successful" in terms of BMW employee utilization, says Raulerson. "We realized that we can [add] services to offer further care for patients. Having a primary-care provider, an optometrist, etc., all under one roof adds convenience for employees, of course, but we should also be able to bring the level of healthcare to new heights."
Just six months in, "it's a little early to track" the cost savings BMW has realized since opening the Associate Family Health Center, but the organization has seen participation in wellness programs run through the center -- as well as programs to help employees combat diabetes and hypertension, for example -- increase since January, he adds.
Organizations such as Sonoco and BMW Manufacturing are not alone in turning to third-parties such as Walgreens to manage their facilities (see sidebar).
When asked how they staff their centers, for example, 67 percent of Towers Watson's respondents with a clinic in place said they contracted through a third-party on-site health-services vendor.
For HR and benefits leaders, the input of a third-party administrator can also be a valuable tool in measuring the center's impact on healthcare costs.
Consider business-process-automation software provider Interactive Intelligence, which is home to a 1,000-square-foot clinic offering services including annual exams, immunizations, generic drug prescriptions and other screening and treatment procedures to the 475 Indianapolis-based employees on the company's health plan, as well as their spouses and dependents over age 16.
Jenny Burke, global benefits and wellness specialist with Interactive Intelligence, is among a group including Steve Head, chief financial officer, and Kim Kean, vice president of human resources, that participates in an annual renewal process with representatives from the company's insurance broker, underwriters and Indianapolis-based OurHealth, to whom Interactive Intelligence pays a $1,000 monthly fee to manage the facility. In the meetings, the group reviews proposals and decides on what plans to offer Interactive Intelligence employees.
The proposals, Burke says, take into consideration the company's group claims over the past year, and use this data to determine what Interactive Intelligence will be charged for insurance in the coming year.
The company's insurance renewal rates are based partly on its group claims history from the previous plan year. This past year, the company saw its renewal rate drop 1 percent from the previous year, says Burke, noting that "annual medical inflation is usually 8 percent to 12 percent.
"We think that's due to costs directed through the clinic," she says. "We can control costs much more so than we could with employees going out of the network."
When Interactive employees visit the clinic, for example, the claims and charges incurred through their visits are not directed through the company's insurance plan, she says, adding that Interactive is instead billed directly by OurHealth for the services.
"This helps us control costs in multiple ways," says Burke.
"First of all, a team member is likely to visit the clinic as a first stop if they are feeling ill, since the visit won't cost the team member anything. This could potentially save the company and the team member money, as the employee may have gone to the emergency room or [an] urgent-care center if the on-site clinic wasn't available, and this visit would have cost much more than the small charge that Interactive will receive from OurHealth."
Encouraging employees to utilize on-site health services also helps them avoid the variation in charges they would find at various healthcare providers, says Burke.
"Let's say [employees need] to have lab work done. If they go to an independent lab, they may be charged one lower price, whereas a hospital lab could charge three times as much for the same service.
And, directing services through the clinic ultimately enables Interactive to better manage costs, says Burke.
"If we can keep claims down by billing through the clinic as opposed to through [an insurance provider]," she says, "we can expect to see a better renewal rate and lower costs for the upcoming year."