On-Site Clinics Offer Savings and Convenience for Employees

Published January 1, 2007

In an effort to contain health care costs, a growing number of businesses are establishing on-site clinics for employees and their families, as well as fitness centers and wellness programs.

The trend is being fueled by rising health care premiums. According to the 2006 Kaiser Family Foundation Employer Health Benefits Survey, released in late September 2006, employer health premiums rose by 7.7 percent in 2006. Although that increase is less than those of recent years, it is still considered burdensome by many employers.

“There is no question that on-site health clinics can deliver significant cost savings to employers, particularly when they take an outsourced approach,” said Kelly Victory, M.D., chief medical officer of Whole Health Management of Cleveland, Ohio, a company that provides on-site health and fitness solutions for more than 29 client organizations nationwide.

“We are able to save our clients money on their direct health care spending, in addition to their indirect costs, such as lost work time, lost productivity, and employee turnover,” Victory said.

Determining Applicability

Whole Health Management President Jim Hummer said health care is usually provided after preventable illnesses and disabilities arise. Instead, he tells potential clients, “We can help you achieve a healthier workforce that consumes less health care services and is more productive.”

On-site health care is not appropriate for every employer. Hummer said it must be consistent with the corporate culture, so he looks for clients who will support and promote the service.

“Our experience is that if people understand the issues and choices, they will probably make good choices,” Hummer explained.

Also, a critical mass of employees is necessary for on-site facilities to be successful.

“In general, we are looking at companies that have somewhere in the range of 2,000 employees at a particular site,” Victory said. “That can be flexible, however, particularly in cases where we are also caring for employees’ dependents. The total number of covered persons in that case could easily be [twice] the number of employees.”

Joining Forces

Companies that are interested in establishing on-site clinics but cannot do so alone can work with another employer or group of employers to set up a shared facility for their workers.

“We are using that approach on the island of Guam, where we run a large clinic for Continental Airlines,” Victory said. “As part of our partnership with Continental, we have expanded access to the clinic to include a number of smaller companies that are geographically co-located.”

Growing Interest

The trend is likely to grow, said John Neuberger, vice president of operations for Quad/Med of West Allis, Wisconsin.

“We sense increasing interest in an employer-managed health care model,” Neuberger said. His company provides on-site health and fitness solutions for the employees of Quad/Graphics and their families at several sites nationwide. Quad/Med also provides on-site clinics for the employees and families of several other client companies in the Midwest.

“Traditionally, employers did not take an interest in health care and were afraid to deal with it, because it was such an unfamiliar topic,” Neuberger continued. “Unfortunately, from a profit perspective, employee health care now represents a major cost to employers. They must consider health care costs as a significant component of doing business. If employers do not learn to manage health care costs more effectively, such costs will continue to erode profits.”

Charlotte LoBuono ([email protected]) is a freelance health and medical writer in Hoboken, New Jersey.

For more information …

Kaiser Family Foundation/Health Research and Educational Trust 2006 Employer Health Benefits Survey, http://www.kff.org/insurance/7527/index.cfm

Quad/Med, http://www.quad-med.com

Whole Health Management, http://www.wholehealthnet.com