On-site clinics multiply, slash costs

Large corporations in the Milwaukee area and across the country have figured out what QuadMed has figured out over the last 20 years: if you keep people out expensive hospitals, your health costs can be controlled.

Just as consumer-driven health care is now a proven concept for reining in runaway health costs, so is putting primary care doctors back where they belong – driving the health care bus.

Once it became known that QuadMed, a division of QuadGraphics, the nation’s second largest printer, was delivering excellent health care in on-site clinics for one-third less than the national average, other corporations started knocking on the door.

They want to deliver health care for the $8,000 per employee that Quad enjoys.

Best practice for full benefit plans in the private sector is about $7000 per employee. The national average, according to Kaiser Permanente, is about $11,340. In the public sector, where change comes slowly, per employee costs are typically more than $20,000.

In the Milwaukee area, Quad now runs clinics for its own 6000 employees, as well as for MillerCoors, Briggs&Stratton, Kohler, Northwestern Mutual and Steinhafel Furniture.

Dr. Raymond Zastrow, chief medical officer for QuadMed, said it is being barraged by requests for proposals from other large employers. Part of its charm is intimate medicine. Gone are the six-minute appointments that the big providers utilize. Average visits at QuadMed are 30 minutes.

“We consciously slow down the pace of care to get a more holistic approach,” said Zastrow.

A recent report in the New York Times said 100 of the 1000 largest employers have installed on-site clinics, and the expectation is that the number will jump to 250 in the near term.

Why the stampede? The first driver is the continuing hyperinflation in health care costs. Employers can’t stand the pain to their bottom lines.

The second is the realization that large, vertically integrated health providers have tied up the health care supply chain. No customer wants any vendor in charge of an entire supply chain, especially when competition is limited.

Hiring your own doctors gives payers control over the front end of the system. Its primary care doctors decide which tests are ordered, when specialists should be called in, when surgeries make sense. The giant health systems are no longer in total control.

Third, instead of tokenism when it comes to wellness, on-site, salaried doctors get very proactive in chronic disease management. Those chronic conditions end up accounting for more than 80% of the nation’s health care bill.  The on-sire doctors work hard to keep people out of the hospital.

QuadMed is now looking at smaller clinics to serve plants picked up when its parent company acquired World Color last year. It will use the latest telemedicine in new ways to reach those plants.

Other early movers in putting the primacy back into primary care with on-site clinics are Toyota, Nissan, Pepsi Bottling Group, Sprint Nextel, Florida Power and Light, Credit Suisse and QualCom.

Smaller companies, like my company, Serigraph, use part-time nurses for their clinics with similar results. Serigraph contracted with ModernMed, a concierge doctor company, for on-site, proactive primary care. We were ModernMed’s first corporate account.

Other smaller companies are coming on board. ITU, a New Berlin, Wisconsin industrial towel company, will be its next corporate account. Others are in the wings.

The move by corporate payers large and small to take back control of the front end of the health care supply chain has a full head of steam. It is real reform of a broken business model.

Expect this trend to accelerate.


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