Employees miss three to four hours of work every time they visit the doctor, which impacts productivity. But forgoing a doctor’s visit to avoid missing work is not the best choice dedicated employees can make for themselves or their employers. One solution that’s gaining traction with employers is the on-site health center, which increases the prevalence of ongoing preventive care and reduces time away from work.
“Employers are finding that the on-site center is a used and highly valued employee benefit,” says Teresa Wolownik, consulting actuary for the Group & Health Care Practice at Watson Wyatt Worldwide. “Which is great news because employers are seeing a reduction in nonproductive time by almost three hours per visit and employees are receiving high-quality health care.”
Smart Business spoke with Wolownik about the benefits of on-site health centers and how employers can explore the feasibility of and ROI from implementing one.
Why should employers implement an on-site health center?
The 2007 annual survey conducted among 453 employers by Watson Wyatt Worldwide and the National Business Group on Health revealed that 21 percent of the surveyed companies presently have an on-site clinic and 28 percent expect to open one in 2008. I think the reason behind the trend is that the clinics provide numerous solutions. First, because the on-site services can be delivered more cost effectively than those delivered by outside physicians, the practitioners are able to spend time focusing more on preventive and lifestyle-related risk factors, not just treatment. Second, only one in four employees currently seeks preventative care, which is contributing to the rise in chronic illnesses, such as diabetes. With services available at the work site, more employees engage in preventive care services, receive ongoing management for current conditions and participate in smoking cessation or weight-loss programs. Third, employers and employees benefit from visiting a health care provider who is fully integrated with a company’s program and is familiar with its benefit plans. Last, employees view the on-site health center as a perk, which improves morale and retention.
Which companies are potential candidates for an on-site health center?
We usually say that employers with a critical mass of 1,000 or more employees at a single location are candidates. However, there are vendors that cater to smaller employers, so it’s possible to adopt a scaled model that focuses on health coaching with or without disease management and still receive many of the benefits. Most on-site centers are outsourced to third-party vendors, so employers needn’t worry about additional liability, employee privacy issues or in-house expertise.
A design and feasibility study will help to validate ROI. The analysis process includes:
- Engaging key stakeholders, such as representatives from legal, finance, benefits, occupational health and real estate, in a meeting to educate and define the objectives for the center. Include consulting experts to advise on the range of health center models and third-party vendors and discuss considerations of eligibility, cost-sharing, integration with other programs and data/measurement.
- Shaping the center’s parameters, such as whether it will be led by an M.D. or a nurse practitioner. Knowledge of your employees and their preferences is vital.
- Conducting a claims history review to help determine the types of services needed and the estimated patient volume for the center. Extract key data concerning current cost and frequency of visits, condition prevalence and proximity to local physicians to estimate adoption rates.
- Leveraging the expertise of a clinician with experience operating an on-site health center. The needs and considerations of an employer-based center are unique to those in the outside community. The physician expert helps you to define your desired ‘patient experience’ and then reviews the data to determine the necessary health center resources and the estimated cost of providing them.
How is the ROI determined?
Once the volume of services is estimated along with the cost, it’s compared against the actual costs of purchasing those same services in the community, which can be validated by the claims review data. Next, we look at other savings opportunities, including productivity gains from employees missing less work time to overall employee health improvements. We typically see a 2-1 ROI rate, meaning that if an employer spends $500,000 for an on-site health center, it is seeing direct and indirect savings of $1 million.
What is the role of employers during the feasibility study and center implementation?
It’s important to have executive sponsorship from the beginning and an ongoing communications campaign. Second, it’s important to select an analysis partner that uses a cross-functional team approach, which includes an experienced physician, an actuary to evaluating community versus on-site services and an attorney to advise on compliance issues. Select a partner who is also familiar with integrating the on-site center with other employer-based programs, such as EAP and disease management, and who understands the options around integrating data with your insurance carrier and/or data warehouse. Data capture is vital for accurate ROI validation once the center is operational.
TERESA WOLOWNIK is a consulting actuary for the Group & Health Care Practice at Watson Wyatt Worldwide. Reach her at (858) 523-5586 or Teresa.Wolownik@WatsonWyatt.com.