Fast Lane
In-house solution
Some employers are providing their own health care services.
By Todd Shryock
Smart Business Cleveland | December 1999
Health care is a difficult benefit to manage in any business. It’s expensive and complex to administer, and switching plans usually means complaints from employees as they may have to switch doctors.
When a service that’s intended to be a benefit becomes a concern, productivity and morale fall.
That’s why some employers have taken health care into their own hands. These businesses, mostly bigger operations with a large employee base, are building their own health clinics and contracting directly with physicians to provide services on-site.
These health centers offer occupational health care as well as primary care. In some cases, they even have pharmacies. Many employers extend the benefits of the facilities to dependents and retirees.
Employers will usually outsource the operation of the clinic to a third party, who provides staffing.
One advantage to an employer-provided facility is the medical staff is working directly with the work force on issues such as workers’ compensation, safety and certifications. The staff becomes familiar with the particular industry and job site, and is able to tailor its services and recommendations accordingly.
Examples of care provided at facilities include:
- Acute and chronic illness and injury care;
- Routine examinations and immunizations;
- Minor outpatient surgery;
- Radiology and mammography;
- Preventive care and wellness programs;
- Utilization management;
- Physical therapy;
- Laboratory and other services.
A business should have at least 500 employees for on-site occupational services and 1,500 for a primary care center. The cost to build a center is substantial — from $300,000 to $1.5 million to develop and operate annually. According to Corporate Health Dimensions, a third-party staffer of corporate clinics, the payback can be considerable and quick.
At CHD sites in 1996, the average cost per visit for primary care was 40 percent less than in the community, and occupational health costs per visit were almost 25 percent less. Pharmacy costs were also less than the community average. At one site, workers’ compensation costs were reduced by 70 percent.
Todd Shryock (tshryock@sbnnet.com) is SBN’s special reports editor.
