Employers increasingly turning to on-site medical clinics

October 11th, 2006 by Julie Ferguson

In an effort to control skyrocketing medical costs, many employers are now providing on-site access to primary medical care. A recent article on workplace medical clinics in the Orlando Sentinel discusses the national trend and how it is in evidence in central Florida.

“According to a recent survey by the global consulting firm Watson Wyatt, 22 percent of large companies — those with 2,000 workers or more — have health clinics for their employees either at or near the workplace. The same survey found that, based on current plans, the portion of large companies with on-site clinics will rise to 27 percent by the end of next year.”

Typically, on-site clinics have been confined to both occupational medicine – treating and preventing work injuries – and to larger employers. That may be changing. Today, some health service providers are targeting smaller employers, with a half day on-site medical services provided at a rate of about a half day per every 150 employees.
Employers that implement clinics are generally motivated by the potential to manage costs, but as the number of uninsured workers continues to increase and the working population continues to age, keeping the work force well may become an increasingly important issue. On-site clinics can also enhance productivity since since employees don’t have to take the time from work for off-site appointments. In addition, medical care can be a powerful benefit and differentiator for employers, bolstering both recruitment and retention.
For more on this topic, also see The Doc Is In-House, an article by Susan J. Wells in SHRM’s April 2006 HR Magazine. Among other issues, the article discusses the potential cost savings:

” …according to a study published in the December 2005 issue of the American Journal of Preventive Medicine, employers can see a return of $3 to $6 for each dollar spent over two to five years on workplace health program strategies, which include medical screenings, financial perks for participation in health programs, health education classes, healthier food in the cafeteria and on-site clinics.”

But the real savings may not just in the cost per care, but in reduced disability:

“That type of program design also proved effective for Power Flame Inc., a 187-employee manufacturer of gas and oil burners in Parsons, Kan. Before adopting on-site care, Power Flame’s health insurance costs were about double the national average and were rising at a double-digit rate annually, chiefly because of catastrophic claims.

“An analysis of these claims showed that each one was related to lifestyle choices and preceded by warning signs,” says Walter Keener, SPHR, the company’s director of human resources. “The only long-term, effective way of reducing health costs was healthier employees.”

The implications for workers comp are many. Medical cost containment is the most obvious. A generally healthier work force means fewer injuries and faster recovery for injuries that do occur. Immediacy and proximity of care are also greatly beneficial to treat any on-the-job injuries. And the advantage of having a doctor who understands the workplace and the nature of work is also invaluable in terms of establishing effective return-to-work programs. Of course, cornerstones of any in-house programs must be quality and integrity The term “company doc” has historically had a very bad associations as being too aligned with the employer’s and not the employee’s interest.
We’ll keep our eye out for more stories on this topic. It would seem likely that we will see an upsurge in “doc in a box” type clinic arrangements being made available to smaller employers.