American employers, faced with the rising costs of insuring their employees, are turning to on-site health and wellness clinics to improve employee health, boost employee productivity, and reduce their costs. When Cerner Corporation (NASDAQ: CERN) told the story of its health and wellness clinic at its main corporate campus in Kansas City, it was a rapt audience at the Executive War College in Miami last May. Bill Wing, Cerner’s Vice President for Health-E Services, shared the many ways that Cerner was improving the health of its employees while reducing the overall cost of health benefits. This is achieved by getting involved with their employees’ health at an earlier stage, and encouraging preventative screenings and wellness programs.
On-site clinics at corporate campuses may offer a wide range of services, from primary care to travel medicine, to nutrition counseling. Preventative services, such as health screenings and immunizations, are the most common type of service offered in the latest wave of clinics, according to a recent survey by Watson Wyatt and the National Business Group on Health. They report that four in 10 clinics offer pharmacy services, making it easy for employees to fill their prescriptions.
Most on-site clinics are run by third parties due to privacy concerns of employees. Major players offering these services include CHD Meridian Healthcare LLC and Whole Health Management. These clinics may be staffed by physicians, nurse practitioners, or registered nurses in isolation or in teams.
Harrah’s Entertainment recently added a 7,000 square foot clinic offering acute and primary care services, nutritional counseling, and physiotherapy-all located on the floor above a 12,000 square foot gym. “We recognized that there was going to come a point where we couldn’t pass on the additional cost of providing health care to employees,” said Jeff Shovlin, Vice President of benefits at Harrah’s. “We concluded that the only way to control costs was by helping employees to get and stay healthy.”
Employees who use these corporate on-site clinics frequently get in faster and spend more time talking to their practitioner. Practitioners have the opportunity to explain the importance of preventative medicine. Within one year, Harrah’s has seen a 13% increase in the number of people getting colonoscopies, because of how practitioners at the new clinic raised awareness about the importance of the screenings (which are provided free under their health plan).
David Beech, a senior health management consultant and Hewitt Associates, Inc, said a clinic serving about 1,000 employees-usually considered a minimum number for critical mass-can expect to make hard-dollar savings of $70,000 in the first year, mainly because of fewer visits to the ER and self-referrals to outside specialists. These savings can rise to $250,000 annually by the third year, when preventative savings kick in. Productivity also gets a boost because workers spend more time on the job. Sick days dropped over 20% in 12 months when Regis Corp., to serve its 800 employees, opened two clinics staffed by a nurse practitioner.
Preventative medicine is good business for clinical laboratories that run routine blood work. It is an opportunity for local laboratories to approach corporations operating on-site health care facilities in their area and tailor a custom package of added-value services for that company. Labs might offer to staff the clinic with phlebotomists on a certain day of the week for routine blood draws for preventative blood tests. Laboratories should be creative in how they establish relationships with corporate on-site clinics.
Firms’ Health Clinics Cut Costs (WSJ subscription required)