Employers stampede to on-site care

Richard Sutton

The mega-trend of employers taking over primary care in on-site clinics at the workplace continues unabated. It’s like a prairie fire. Here are some data points from the Heartland:

• QuadMed, the Wisconsin-based subsidiary of QuadGraphics, now runs 23 contract clinics that employ 70 primary care providers (doctors, nurse practitioners, physicians’ assistants and nurses). Its customers include the likes of MillerCoors, Briggs & Stratton, Northwestern Mutual Life, Kohler and Safeway. It’s challenged to keep up with demand from other employers. (I wish I could buy stock in QuadMed.)

• 170 school corporations in Indiana have moved to on-site service in part-time clinics through a start-up company, Novia Care Clinics. Novia operates 47 health and wellness centers in the Midwest and South. It has helped the schools keep health cost inflation to less than 3%. “I cannot come up with a better strategy than this” for delivering health care and containing costs, said Richard Sutton, vice president, Indiana, for Brown & Brown Insurance, a publicly traded insurance brokerage company. He stressed that the on-site clinics don’t shift costs to employees, they reduce costs, a big difference from current tactics.

• The West Bend School District in Wisconsin has put out a request for proposal for an on-site clinic for its 1000 employees and their dependents. It would kick off in 2013.

• ModernMed, which offers concierge doctor services to mid-sized companies, is also growing fast. And there are other entrants into the primary care business, such as Walgreen.
There are many reasons why on-site clinics deliver health care at savings of 20-30%:

• They are convenient, meaning employees spend less time away from work attending to medical needs. Waiting is minimal for concierge doctors and support staff. A 10 o’clock appointment occurs at 10 o’clock.

• The on-site staff acts as economic gatekeepers. They order tests, prescriptions (generics as often as possible), specialists and hospital admissions where the prices and quality are the best. An MRI, for example, can be bought for $525, versus average rates of $2000 to $3000. I’ve seen bills above $5000 where multiple polyps are removed.

• Less severe workplace injuries can be handled quickly and at lower prices, bringing down lost time and workers’ compensations costs.

• Instead of reactive medicine – “sick care” – the on-site providers offer proactive, holistic care. They work hard to head off the effects of chronic diseases to keep people well and out of hospitals.
• Concierge doctors take phone calls, e-mails, make themselves available 7X24 and even make house calls. Among other benefits, this kind of service cuts down on uneccsesary office and emergency room visits.

• Prevention, wellness and chronic disease management become intimate, rigorous encounters versus passive brochures or websites that preach at employees. Hospital admissions drop dramatically with proactive regimens. The stampede toward proactive primary care offered by employers amounts to a new business model for the delivery of health care in the United States. It is what is known as “disruptive innovation.”
Given that the old business model is busted on the economic side of health care, it’s welcome disruption.

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