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On-Site Savings

Companies are increasingly embracing on-site wellness clinics as a way to save both time and money.

Thursday, February 1, 2007
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With an eye toward the bottom line, many companies are choosing to limit and even reduce health-care costs by opening on-site wellness clinics for their workers. The convenience, increased productivity and proactive health-care approach are only a few of the added benefits of such a move.

Whether outsourced to a vendor or managed in-house, the trend toward supplying at least some medical care within walking distance of an employee's desk is "considered mainstream . . . best-practice," says Stuart Clark, executive vice president of Vienna, Va.-based Comprehensive Health Services, operator of 67 wellness clinics nationwide on corporate sites with employee populations ranging from 400 to more than 10,000.

Start-up costs, depending on size, equipment and personnel, he adds, range from about $20,000 to $500,000, but the investment will eventually reap dividends in worker productivity, reduced absenteeism, higher morale and lower health-care costs.

Indeed, the idea of on-site clinics, staffed by a variety of health-care professionals, is catching on. Though exact numbers of operational on-site corporate wellness centers in the United States are unavailable, their existence and popularity is noted by benefits experts and vendors of such programs. Those numbers reinforce the enormous attention to proactive health within the business community.

Todd Keller, CEO of Jacksonville-based IMC HealthCare, which specializes in on-site corporate health care within medium to large companies, says the establishment of such facilities during the last two years has "just gone ballistic."

In 2005 IMC received 53 inquiries from companies seeking information regarding on-site wellness clinic start-ups. Those contacts resulted in seven new sites serving 18,500 employees, according to Keller.

Contrast those numbers with inquiries recorded in 2006 numbering some 275. "We have six already scheduled for openings in the first quarter, three in the second quarter and anticipate a total of 18 to 20 in 2007," Keller says. One prospective center will serve more than 15,000 employees and dependents, while another will serve more than 25,000 people.

A survey of 464 employers representing varying sizes and types of industries, which was conducted at the end of 2005 by the Milwaukee-based International Foundation of Employee Benefits Plans, indicated "62 percent offer some sort of wellness initiative," according to Kelli Kolsrud, senior information specialist.

Many among those that didn't currently operate on-site wellness clinics planned to implement one within 12 months. Among companies that operate on-site clinics, 46 percent use in-house staff, 11 percent use outside vendors and 39 percent use a combination of in-house and outside vendors, according to the survey.

"We're a society of convenience," Keller says. "Bringing [health care] into the workplace increases the possibility [that] employees will access [it]."

Imagine going down the elevator or across the hall for weekly allergy shots, blood-glucose testing or a blood-pressure check. Or taking a half-hour instead of half a day to visit the corporate clinic for diagnosis and treatment of your sore throat or possible conjunctivitis. Gone is the necessity to take the afternoon off for the long drive to and from the doctor's office.

And convenience is only part of the attraction. On-site clinics present a viable solution to increasing health-care costs. "The whole concept [which hinges on achieving a return on the investment] is to leverage an existing cost," says Clark. He suggests the future of that return centers on measured outcomes and integration of data, such as pharmacy benefit managers, health risk assessments, data analytics and biometrics.

Employers can expect to see a return of $3 to $6 for each dollar spent over two to five years on corporate clinics, according to a 2005 study published in the American Journal of Preventive Medicine. Employers realize significant savings not only through treatment of minor illnesses and injuries but also through reduction in the number of visits employees make to doctors' offices and hospital emergency rooms.

On-site clinics also help employees save by assisting in maintaining overall health and managing chronic health conditions.

Employers can opt for occupational health exams and tests; routine lab work; immunizations and vaccinations; routine health maintenance, such as allergy shots or blood-pressure monitoring; screening programs; educational and training programs, such as smoking cessation or nutrition; and numerous other services.

Reduced health-care costs, limited absenteeism and increased productivity are among the reasons a growing number of companies are considering the viability of this form of on-site care. Handled right, it can accomplish all the above, but not without HR's involvement in the due diligence and not without a commitment from the C-suite.

The best-laid plans for successful ventures are in companies where top leaders "don't make decisions without HR benefits supervisors," Clark says.

Among the HR concerns are decisions related to employer- or vendor-operated facilities, management of wellness clinics, potential liability related to employee treatment and employee privacy issues. Additionally, senior management must be prepared to offer clinic support and encourage its use.

On-site wellness clinics offer the best returns to employers with enough employees to warrant the investment. For HR leaders, this requires some due diligence to determine the feasibility of such a project and the right type of service for the business' employee population.

Attracting Participants

Tinley Park, Ill.-based Panduit Corp., a global provider of network and electrical solutions with 2,500 domestic employees, is in its second year of offering workers an on-site wellness clinic. Simply Well of Omaha performs health-risk assessments for Panduit employees, based on answers to online questions regarding health history, allergies, medications, nutrition, smoking, exercise and other factors.

Simply Well clinicians then "produce a health report for each employee," says Jacqueline Reidy, benefits analyst for Panduit. The company's wellness participation, which is completely voluntary, currently stands at 40 percent. "We hope to increase that to 50 percent this year" through additional communications about the clinic and incentive promotions, she says. Like many such programs, Panduit contracts its service based on participant count. The company's cost is calculated on a per-person basis.

As in other clinic programs, the health-risk assessment provides the foundation for the initiative and is the starting point for each employee's participation. Histories of family diseases, for example, are entered into a data bank and the aggregate information is then used to target general-population tendencies toward unhealthy lifestyles or specific diseases. In all such programs, employees' personal health information remains confidential and goes unshared with corporate officials. Only aggregate data across the workplace population is available to them.

"With HIPAA privacy rules, [confidentiality] is becoming more of a concern," Kolsrud says.

To boost the numbers of participating employees, some employers offer incentives for filling out the assessments. Workers at Panduit, for instance, receive 4,000 points for completing a health-risk assessment, and can earn an additional 4,500 points for health screenings on-site to determine weight, blood pressure, thyroid activity or other physical data.

Participants can earn additional points for ongoing healthy behaviors such as exercising, stopping smoking or wearing seatbelts. The company allows the point accumulation to create "eligibility for reduced medical premiums" as an additional incentive, says Reidy.

Economic motivation for employees predisposed to illness, as well as for those who are not, remains critical to a wellness program's success. At-risk employees can be quickly identified and provided with treatment and suggested lifestyle changes -- such as nutrition, exercise and even stress management -- in a clinic down the hall. The challenge for HR lies in bringing employees into the program.

Richmond, Va.-based Performance Food Group, which has operated an on-site clinic for its 6,000 employees for the past two years, tackles that by offering a Healthy Awards Account, says Charlotte Perkins, chief human resource officer for the national food-service distributor.

"Employees understand that the only way to control their health costs is to see that they stay healthy," she says. Employees who visit the gym three times a week, for example, receive cash rewards. "It's very much like a flexible spending account," she says. It rolls over every year, so "it grows in value."

Employees at PFG likewise receive rewards for monitoring chronic disease, such as blood-glucose testing for diabetics.

Perkins credits a good deal of the clinic's success to the vendor-client relationship, which she calls "the smart way to do it from an insurance and liability perspective." PFG's vendor covers the cost of medical malpractice insurance while the company carries incidental medical malpractice insurance on its policy, says Perkins. "It's built into our cost."

She also acknowledges the need to hire the right medical personnel. The clinic's physician needs to understand the business, specific jobs and the company's employees, she says. At PFG, HR leaders work in conjunction with the vendor to ensure clinic staff members develop that understanding and familiarity through targeted communication sessions and memorandums.

But key to a clinic's success, she says, is in attracting participants. In launching the initiative, she says, "you have to do a phenomenal job of communicating to your associates." It's essential to "institute a culture of wellness" with rewards and constant communication. "Wellness is part of your company's culture and part of the attitude in your organization."

Her early concern was a significant one: Would the employees buy into it or not? Perkins says employee morale, extra labor required for absent workers and early diagnosis and treatment for workers all factored into the decision to bring the clinic to the workplace. "If we just broke even, it was still worth it," she says.

PFG's on-site clinic has worked so well that the company will soon start a second on-site clinic in Elizabeth, N.J. "Our workers' comp numbers support it," Perkins says. "We have seen a significant reduction in lost days each and every year. In regards to the wellness-clinic cost savings we are seeing a 10 percent to 15 percent reduction in [health-care] cost.

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"The other savings are hard to quantify. You gain productivity increases, etc. The other huge benefit for us is the wellness aspect the clinic brings [nutrition, exercise, disease management]. This in turn will help to mitigate health insurance costs."

Efforts to keep workers committed to their health are also working at the University of Vermont, which opened an on-site clinic at its Burlington campus three years ago to service its nearly 4,000 employees. There, the incentive-based program, featuring a menu of options, offers employees points that are earned on the basis of choices from that menu, such as completing a health risk assessment, beginning an exercise program or enrolling in a smoking cessation program, according to Emina Burak, wellness coordinator.

"Those points are translated into dollars," she says, which can be used to purchase things on or off campus. Workers, she says, "can earn up to $100 a year."

The university also offers coaching through numerous on-site workshops, run by university-hired health-care professionals. For those whose schedules prohibit their attendance, there's even telephone coaching, provided by health-care professionals. Employees set goals, discuss potential obstacles and provide support for each other. "Participants are armed with a very strong action plan," Burak says. Such coaching "promotes implementation of lifestyle changes," she says. "Unless people know how to do it, they struggle and they fail."

To date, the feedback on the university's program has been positive, Burak says. "People can't thank us enough. They've made huge changes."

On the Plus Side

At Raytheon Missile Systems in Tucson, Ariz., Jim Pirzynski, director of human resource administration and systems, sees numerous advantages to the on-site trend. His 11,000-employee company, specializing in the design and production of missle systems, operates a primary on-site clinic in addition to a satellite facility.

Both treat occupational injuries, maintain Occupational Safety and Health Administration logs, offer immunizations for employees traveling internationally and provide flu shots for employees, among other services.

Raytheon's initial clinic startup required HR's input into the menu of services to be offered, based on employee population demographics and vendor recommendations. The HR department also coordinated with the vendor on personnel and clinic management, implementation of policies related to appropriate reasons for clinic visits and creation of protocol for dispensation of medications.

The clinic staff -- including a physician, several nurses and a licensed occupational nurse (employed by the vendor) -- treat both injuries and illnesses, Pirzynski says. Services include monitoring employees' cholesterol and blood pressure, providing drug and alcohol resource teams, and even addressing absence management and administering short-term and long-term disability programs.

"It's a pretty comprehensive clinic," Pirzynski says. There is also an employee-assistance-provider contractor on-site. "That kind of gives us an additional dimension there."

In addition, administering programs through the clinic has streamlined dealings with FMLA, disability and workers' comp administration just on the basis of clinic staffers' familiarity with company personnel, Pirzynski says.

Is there a downside? "It's hard to think of any except cost," he says. Still, he says, "as costs become more predictable, we can budget more effectively."

The challenge, as with every other company, lies in motivating employees to invest in making lifestyle changes to improve their health. "We really touch a pretty large portion of our workforce," Pirzynski says. "Employees are more aware of how they're treating themselves and their bodies. That can have a tremendous impact in the long term."

Of course, such clinics and programs work best when designed specifically for individual workplace demographics. Workers' ages, genders and occupations, among other factors, enter the equation that determines a company's ideal wellness options. An employee population of miners, for example, would have limited or no need for obstetric services.

Staffing needs are also determined based on the services to be performed. The menu is vast and varied, and can be tailored to meet the needs and expectations of both management and employees. Many services can be performed by nurse practitioners or physician's assistants.

"Each program is customized and designed for the specific needs of that company," according to IMC's Keller. He also cites some criteria. "Typically, there are 350 employees in one geographic location, or higher," for the implementation of an on-site program to be cost-effective, he says.

Contract costs are calculated based on the number and types of professionals required to deliver the contracted services, Keller says. "The cost," he adds, "is in the staff."

Outsourcing management of an on-site clinic to a vendor makes sense for a variety of reasons, according to Dr. Terry MacMath, chief medical officer at IMC. Companies don't want the liability of potential malpractice suits, nor the regulation-compliance responsibilities. Also, MacMath says, health care is not the company's core competency. Outsourcing to professionals allows the company to focus on what's central to its operation.

Keller underscores the importance of HR's involvement in vendor selection and a program's startup. It's critical, he says, for HR leaders to recognize that establishing a corporate wellness center involves a significant time element. Corporate commitment to on-site wellness programs is long-term, Keller says, with contracts typically extending over five years. "Wellness is not an overnight fix," he says.

Copyright 2014© LRP Publications