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Workplace Clinics A Sign of Growing Employer Interest

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					                       Research Brief
                    Findings From HSC                                                        NO. 17, DECEMBER 2010



Workplace Clinics: A Sign of Growing
Employer Interest in Wellness
BY HA T. TU, ELLYN R. BOUKUS AND GENNA R. COHEN




Interest in workplace clinics has intensified in recent years, with            Growing Employer Demand
                                                                               for Workplace Clinics
employers moving well beyond traditional niches of occupational
                                                                               With employers facing relentless growth in
health and minor acute care to offering clinics that provide a full range      health care spending, demand for workplace
of wellness and primary care services. Employers view workplace clin-          health clinics has increased over the past five
                                                                               years, according to most industry experts
ics as a tool to contain medical costs, boost productivity and enhance         interviewed by HSC researchers (see Data
companies’ reputations as employers of choice. The potential for clinics       Source). Even during the recent recession,
                                                                               employer interest remained high, although
to transform primary care delivery through the trusted clinician model
                                                                               some chose to delay implementation or scale
holds promise, according to experts interviewed for a new qualitative          back clinic plans until economic conditions
research study from the Center for Studying Health System Change               improve.
                                                                                   Workplace clinics are not a new phenom-
(HSC). Achieving that model is dependent on gaining employee trust             enon. Until the 1980s, it was common for
in the clinic, as well as the ability to recruit and retain clinicians with    large employers to operate onsite company
                                                                               clinics to treat work-related injuries. Many
the right qualities—a particular challenge in communities with pro-            clinics closed because of declining heavy
vider shortages. Even when clinic operations are outsourced to vendors,        industry and manufacturing sectors and
                                                                               workplace hazards becoming less common
initial employer involvement—including the identification of the appro-
                                                                               in these sectors. Apart from occupational
priate scope and scale of clinic services—and sustained employer atten-        clinics, other early adopters of workplace
tion over time are critical to clinic success. Measuring the impact of         clinics focused on providing care for minor
                                                                               acute conditions. These employers—includ-
clinics is difficult, and credible evidence on return on investment (ROI)      ing many in the financial sector—tended
varies widely, with very high ROI claims made by some vendors lack-            to provide clinics as a perk for high-wage
                                                                               employees and to minimize employees’ time
ing credibility. While well-designed, well-implemented workplace clinics       away from work.
are likely to achieve positive returns over the long term, expecting clin-         The recent resurgence of workplace clin-
                                                                               ics has differed markedly from the first itera-
ics to be a game changer in bending the overall health care cost curve
                                                                               tion of clinics. The focus has shifted largely
may be unrealistic.                                                            to health promotion, wellness and an array
                                                                               of primary care services, rather than occu-
                                                                               pational health or convenience care. Indeed,
                                                                               the increased interest in onsite clinics is



P R O V I D I N G     I N S I G H T S   T H A T   C O N T R I B U T E    T O   B E T T E R     H E A L T H      P O L I C Y
Center for Studying Health System Change                                                             Research Brief No. 17 • December 2010




linked to greater demand for workplace          workplace clinics, reflecting that these      dence on both direct and indirect returns
wellness programs—an interest shared by         employers are more likely to reap savings.    on investment. Finally, policy implications
both employers and policy makers. The           Some experts reported seeing high inter-      are reviewed—including the potential
recently enacted health care reform law—        est among smaller employers, but these        impact of clinic growth on community-
the Patient Protection and Affordable           firms typically find it much more difficult   based primary care and the appropriate
Care Act (PPACA)—includes provisions            to shoulder the initial capital investment    role for government, if any, in encouraging
that may encourage more employers to            or ongoing operational costs, unless the      the growth of workplace clinics.
offer wellness programs.                        firm either sponsors a part-time clinic or
    By far the strongest motivation for         partners with other employers to operate      Clinic Management Models
implementing workplace clinics is to            a so-called “near-site” clinic.               Employers considering workplace clinics
contain direct medical costs. In the short          Estimates of clinic prevalence vary,      have three options:
term, exerting greater control over direct      with some recent employer surveys             • hiring third-party vendors to operate a
costs, such as specialist visits, non-generic   indicating that more than one-third of          clinic;
prescriptions, emergency department             large employers offer onsite or near-site
                                                                                              • employing all clinic staff and manage-
(ED) visits and avoidable hospitaliza-          clinics, while another survey reported
                                                                                                ment; or
tions, is a key employer objective. In the      one-fifth of large employers doing so.1
long run, improving population health by        According to HSC’s 2007 Health Tracking       • contracting with external health care pro-
preventing and managing chronic con-            Household Survey, 8 percent of American         viders to manage and/or staff the clinic.
ditions is a major objective. Employers         families had at least one family member           Most employers outsource clinic opera-
also view onsite clinics as a way to boost      who had ever used a workplace clinic,         tions to vendors that provide comprehen-
productivity, reduce absenteeism, and           and 4 percent had a family member who         sive staffing and management—so-called
prevent disability claims and work-related      had used a clinic in the past year.2          turnkey operations. As one benefits con-
injuries. Some employers implementing               This Research Brief examines the          sultant said, “More and more employers
primary care clinics also see opportunities     potential of workplace clinics to improve     are choosing to outsource because running
to improve access to and quality of care.       health and contain costs. In address-         clinics is far afield from their core com-
Finally, some employers view workplace          ing these issues, the study first provides    petency.” Many employers would rather
clinics as an important benefit that helps      context by describing current models of       contract with vendors that have expertise
to attract and retain competitive work-         workplace clinic management, services         in everything from employee data confi-
forces, while enhancing their own repu-         and staffing, focusing on the primary         dentiality to medical malpractice insurance
tations as “employers of choice” in their       care delivery model that experts view as      to biomedical waste disposal. While most
industries and communities.                     having the most potential for improving       employers contract with vendors focused
    Large, self-insured employers—partic-       health and curbing costs. Then key chal-      solely on operating clinics, health insur-
ularly with low worker turnover and high        lenges—including regulatory require-          ers also are interested in the business. For
worker concentration at worksites—have          ments—faced by employers and clinic           example, CIGNA’s onsite health division
been most likely to undertake or expand         managers are discussed, along with evi-       operated 22 clinics for employers as of late
                                                                                              2010. Other insurers offer a more limited
                                                                                              onsite presence—often involving biometric
Data Source                                                                                   screening, health coaching and disease
In addition to performing literature reviews, HSC researchers conducted more than             management—but several are considering
35 telephone interviews with workplace clinic industry experts and representatives            offering a broader set of clinic services.
of benefits consulting firms, clinic vendors and employers sponsoring onsite clinics.             The direct employment model—much
Interviews were conducted by two-person research teams between February 2010 and              less prevalent today than outsourcing to
July 2010. A semi-structured interview protocol was used in conducting each interview,        vendors—is used more often by employers
and notes were transcribed and jointly reviewed for quality and validation purposes.          with longstanding clinics, in part because
The interview responses were coded and analyzed using Atlas.ti, a qualitative software        “fewer clinic vendors were around when
tool.                                                                                         these clinics were started, so [employers]



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Center for Studying Health System Change                                                             Research Brief No. 17 • December 2010




had to build and staff their own facilities,”   Wisconsin community, where there was
according to one expert. Boeing and Quad/       concern about provider resistance, Pitney
Graphics are examples of companies that         Bowes contracted with local providers to
built highly regarded full-service clinics      staff the clinic. And, at locations too far
using the in-house approach. In addi-           from corporate headquarters for easy over-
tion, some employers—such as the Dow            sight, the company chose to outsource clinic
Chemical Company—have developed more            operations to a vendor.
limited in-house clinics with an almost             Whatever model an employer chooses,
exclusive focus on wellness programs.           experts stressed that clinics are likely to suc-
    A few employers that developed their        ceed only if the employer remains engaged
own workplace clinics became so proficient      in clinic oversight. A benefits consultant
that they launched clinic businesses. One       observed, “There is no such thing as a
example, QuadMed, which started as the          completely turnkey operation.” Likewise, a
in-house clinic manager for the printing        clinic vendor said, “If we don’t have really
                                                                                                   While direct contracting with
company Quad/Graphics, now operates pri-        strong management support [from the
mary care clinics for other large employers.    employer], there’s no sense in going for it. It    health providers is relatively
Similarly, the Cerner Corp., a health infor-    will be a failure.”
mation technology firm, first established a                                                        uncommon, experts noted that
clinic at its Kansas City campus in 2006 and    Types of Clinic Services
then expanded its onsite-clinic subsidiary,     While experts had many different ways of           employers sometimes choose
Healthe Solutions, to provide clinic services   describing and classifying clinic services,
                                                                                                   this model if they expect or
for other large employers, including Cisco      the following categories generally capture
Systems and Kia Motors.                         the range of services at workplace clinics:        experience opposition from the
    While direct contracting with health        • Occupational health—treatment of work-
providers is relatively uncommon, experts         related injuries, employment physicals           local provider community to
noted that employers sometimes choose this        and screenings, travel medicine, and
model if they expect or experience opposi-        compliance with federal workplace safety         establishing a workplace clinic.
tion from the local provider community to         regulations.
establishing a workplace clinic. In addition,
                                                • Acute care—ranging from low-acuity epi-
employers with worksites in small, rural
                                                  sodic care, such as sore throats or sprains,
communities sometimes contract with local
                                                  to treatment of more severe symptoms
providers because there are limited existing
                                                  requiring urgent attention, such as exacer-
managed care networks. Perdue Farms, the
                                                  bations of chronic conditions.
poultry company with rural and small-town
facilities in 15 states, is one example. The    • Preventive care—physical exams, immu-
company negotiated preferred provider             nizations and screenings.
agreements directly with physicians and         • Wellness—health risk assessment follow
other providers in many communities;              up, biometric screenings, health coaching,
when these providers practice at a Perdue         lifestyle management programs and edu-
onsite health center, it is an extension of       cational programs.
their private practices.3
    Employers with multiple locations can       • Disease management—ongoing care for
vary models by worksite. Connecticut-             and management of chronic conditions.
based Pitney Bowes, for example, directly          Employers can choose different combi-
employs clinicians at its Connecticut facili-   nations of these services, such as a “wellness
ties, where the corporate medical director      model,” which typically includes wellness,
provides oversight. For a facility in a small   preventive care and often disease manage-


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Center for Studying Health System Change                                                             Research Brief No. 17 • December 2010




                                           ment, or a “primary care model,” which             the health coach, or that the coach can
                                           typically includes acute care, preventive          figure out what makes [the employee] tick
                                           care, disease management and some or all           and what will drive behavior change that’s
                                           aspects of wellness. Experts noted that there      meaningful and lasting,” a benefits consul-
                                           is substantial overlap among categories.           tant said.
                                           As one clinic vendor observed, “Wellness
                                           programming for individuals with high-risk         Clinic Primary Care
                                           factors and chronic conditions…is essen-           Delivery Model
                                           tially the same as disease management, or          Employers increasingly are offering primary
                                           at least the intersection between those two        care at workplace clinics well beyond basic
                                           things should be seamless.”                        preventive services or diagnosis and treat-
                                               Occupational health is still the most          ment of simple ailments. While the avail-
                                           prevalent service provided by workplace            ability of simple, routine care at work can be
                                           clinics, but neither occupational health nor       a valued perk for employees, most experts
                                           minor acute care is where clinic growth            observed that its direct cost-saving potential
                                           or employer demand is currently concen-            for employers is limited, if it exists at all.
These experts noted that what              trated. Instead, demand in recent years has        Instead, these experts noted that what gen-
                                           focused on wellness, prevention and disease        erates savings for employers is the ability to
generates savings for employ-              management. One clinic vendor observed,            change practice patterns, such as drug pre-
                                           “Of all the RFPs [requests for proposals]          scribing, ordering of tests and procedures,
ers is the ability to change               that have come to us in the past 24 months,        and specialist referrals, along with the
                                           I can’t recall one that didn’t ask for well-       potential for early diagnosis and treatment
practice patterns, such as drug            ness and health promotion.” Another clinic         to avoid ED visits, hospitalizations and
                                           vendor stressed that onsite wellness and           other costly downstream complications.
prescribing, ordering of tests
                                           disease management are key to cost sav-                Beyond a convenient onsite location,
and procedures, and specialist             ings: “Twenty-five percent of health care          workplace clinics aim to transform primary
                                           spending for employers is specifically for         care delivery in several key ways. First, clin-
referrals, along with the poten-           cardiovascular disease and diabetes. If we         ic vendors and benefits consultants noted
                                           can attack that part of the dollar, [it is worth   that—in contrast to most community-based
tial for early diagnosis and               treating] 20 runny noses as a way to start         primary care—the typical workplace clinic
                                           a conversation [with the employer] about           model offers much shorter appointment
treatment to avoid ED visits,              how to manage those diseases, but if the           and in-office wait times and much longer
                                           employer doesn’t want chronic condition            clinician-patient encounters. For example,
hospitalizations and other cost-
                                           management, they will never save money             some clinics set goals of accommodating
ly downstream complications.               treating runny noses.”                             patient requests for visits within 24 hours,
                                               Experts also noted that more and more          limiting clinic wait times to five minutes at
                                           employers are using workplace clinics to           most, and providing visits with clinicians
                                           operate wellness programs because of grow-         lasting from half an hour to an hour.
                                           ing recognition that face-to-face wellness             Experts said that longer clinic visits
                                           activities—in particular, health coaching          allow the clinician—sometimes, but not
                                           and lifestyle management programs—gen-             always, a physician—to listen to patients,
                                           erally are more effective than alternatives,       diagnose their conditions and discuss dif-
                                           such as Web-based and telephonic coach-            ferent treatment options with them. In
                                           ing. “When it’s just a disembodied voice           addition, the clinician has time to screen for
                                           on a phone line in place of a face-to-face         other problems unrelated to the immediate
                                           session, it’s not nearly as likely that [the       visit. As a clinic medical director observed,
                                           employee] will form a connection with              “[During the visit,] our doctors always go


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Center for Studying Health System Change                                                            Research Brief No. 17 • December 2010




through a minimum health risk assessment,       clinic staff typically seek to coordinate
preventive care, blood work…They ask            care with patients’ existing providers on an
‘How’s your heart?’ even if you came in for     informal, case-by-case basis. The method
a sore knee…It’s a holistic approach, not       and extent of communication depends
just acute, episodic care.”                     largely on patient preferences. The onsite
    Many experts observed that most             clinician might provide copies of records for
workplace clinics aim to achieve a “trusted     patients to take to their next appointment,
clinician” primary care model, which one        have the patient sign a release form so that
respondent described as “having the abil-       clinic staff can transmit information directly
ity to bond with patients, to build a trusted   by fax or other means, or call and speak
adviser relationship…[a clinician who] can      with the usual provider. Several respondents
provide compassion, be accessible, and also     highlighted the value of communicating
be very good at motivating employees to do      with community providers, for instance, to
the right thing.”                               assist patients coping with chronic condi-
                                                                                                  Respondents agreed that
    Respondents noted that the use of           tions. One clinic vendor remarked, “If we
evidence-based guidelines and electronic        [clinic staff] are managing hypertension          the use of electonic medical
medical records (EMRs) is more common           and [the patient is] not compliant…[we]
at workplace clinics than a typical primary     pick up the phone and say, ‘We have your          records, which is nearly univer-
care practice in many communities. The          patient, her blood pressure is up, her weight
clinic company Comprehensive Health             is up and she is still smoking. We’re con-        sal among major clinic com-
Services (CHS), for example, uses a set of      cerned; you’re concerned. How can we work
                                                                                                  panies, contributes to internal
300 evidence-based guidelines spanning          together on this patient?’”
the domains of acute, preventive, chronic            When patients need referrals to special-     care coordination, quality and
and occupational health. Other clinic           ists or other providers not available within
vendors and employers described a simi-         the clinic, referral processes and networks       cost containment.
lar approach, and one corporate medical         vary widely across clinics. A few employers,
director noted the sharp contrast between       such as Toyota, and clinic companies, such
the evidence-based practices at his com-        as CHS, have developed “high-performance
pany’s workplace clinics and the primary        networks” by using data from such sources
care practices in the “surrounding small-       as Ingenix and Medstat, sometimes supple-
town and rural communities, where solo          mented by the employer’s own claims data,
and small practices are very much still the     to identify physicians and hospitals with
norm.”                                          better outcomes and lower costs. Most clin-
    Respondents agreed that the use of          ics, however, use a more informal, ad hoc
EMRs, which is nearly universal among           approach—relying on clinic medical staff
major clinic companies, contributes to          to recommend “physicians they’re familiar
internal care coordination, quality and cost    with from the community that they know
containment. However, because of the low        are good…It’s a more anecdotal approach…
EMR penetration in many communities             It’s a stretch to call it a high-performance
where clinics operate, experts noted that       network, although some vendors that use
few opportunities exist to use EMRs to          this informal referral network will label it as
communicate with clinic patients’ regular       such,” according to one benefits consultant.
physicians. Even when community physi-
cians use EMRs, interoperability challenges     Employee Financial
mean that exchanging patient clinical data      Incentives for Clinic Use
is rarely, if ever, done electronically.        Most employers offering primary care at
    Nonetheless, experts emphasized that        their clinics choose to supplement rather


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Center for Studying Health System Change                                                             Research Brief No. 17 • December 2010




                                           than replace primary care provided in the         likely to value services provided entirely
                                           community. However, a few employers               for free and that lack of any cost sharing
                                           have been more aggressive in attempting to        might “induce frivolous demand.” Many
                                           substitute the clinic for community-based         other employers reduce copayments for
                                           primary care altogether—an approach that          clinic visits compared to those charged for
                                           is used primarily when worksites are locat-       community-based visits—$10 or $15 differ-
                                           ed in smaller communities with quality            entials are common. Some employers also
                                           issues, provider shortages or both. When          provide generic medications for free if the
                                           employers aim to replace community-based          prescription is filled through the clinic. Few
                                           care, they tend to use health benefit design      employers offer no financial incentives at
                                           to strongly incentivize clinic use.               all to use clinics.
                                               For example, Quad/Graphics employees
                                           who use QuadMed clinics for their primary         Staffing and Recruiting
                                           care pay $7 for any service at the clinic and     Staffing arrangements at workplace clinics
                                           $30 for visits to in-network specialists, after   vary widely and are dictated by the types
                                           a $150 deductible. In contrast, employees         and mix of services the clinic provides.
                                           pay 25 percent coinsurance after a $400           Clinics focused exclusively on wellness
A few employers have been
                                           deductible for a community-based visit to         tend to have health coaches and other pro-
more aggressive in attempting              an in-network provider, or 35 percent coin-       fessionals with varied backgrounds, such
                                           surance after a $500 deductible to an out-        as nurses, health educators, nutritionists
to substitute the clinic for               of-network provider. Partly as a result of
                                                                 4
                                                                                             and exercise physiologists. In general, the
                                           this sharp cost-sharing contrast, more than       greater the extent of primary care services
community-based primary care               four in five primary care visits by Quad/         offered, the more likely it is for primary
                                           Graphics’ Wisconsin employees take place          care physicians (PCPs) to be used in staff-
altogether—an approach that is             in onsite clinics. Another employer seeking       ing. However, within each model of clinic
                                           to replace community-based primary care           services, each employer’s philosophy—
used primarily when worksites
                                           is Glatfelter, a paper company with a work-       which in turn depends at least in part on
are located in smaller communi-            place clinic in Ohio. Three years ago, the        employee preferences—also has a strong
                                           company introduced a premium-sharing              impact on staffing. For example, one cor-
ties with quality issues, provider         discount for employees who choose the             porate medical director of a high-technol-
                                           onsite clinic as their primary care provider.     ogy company with a high-wage workforce
shortages or both.                         For employees with family coverage, annual        noted, “We found that having M.D.s was
                                           savings in premium contributions amount           critical to patient acceptance of our [pri-
                                           to $1,000. As a result, more than half of         mary care clinic].”
                                           employees have chosen the clinic as their              However, a corporate medical director
                                           regular primary care provider.5                   at another firm asserted that employers
                                               Among the majority of employers seek-         don’t need a “BMW model” of primary
                                           ing to supplement rather than replace             care, saying, “I don’t think everything has
                                           community-based care, a wide variety of           to be done by physicians; great things can
                                           cost-sharing arrangements apply for clinic        be done by NPs [nurse practitioners]. The
                                           visits. Many employers waive copayments           reason I like NPs is they have to do care
                                           altogether—an approach endorsed by many           planning in school and learn to treat the
                                           clinic vendors because it provides a strong       person as a whole; physicians tend to think
                                           incentive to use the clinic. However, some        about [discrete] problems.”
                                           benefits consultants and at least one major           Whether clinics use primary care
                                           vendor expressed reservations about this          physicians or other medical profession-
                                           approach, arguing that consumers are less         als, experts emphasized that hiring the


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Center for Studying Health System Change                                                               Research Brief No. 17 • December 2010




right people is key to clinic success. As        in markets with keen competition for
discussed earlier, the “trusted clinician,”      providers, it may be difficult for clinics to
who plays a central role in the primary care     retain key staff long enough to build the
clinic model, has the ability to form per-       sense of permanence and stability neces-
sonal connections and a bond of trust with       sary to the trusted clinician relationship.
patients. One medical director referred to           At some workplace clinics with preven-
this quality as the “hug factor,” noting that    tive and primary care services, specialist
as some clinics have expanded from an            physicians are available part time. Unlike
exclusive focus on occupational health into      PCPs, NPs and other providers who typi-
wellness and primary care, it has been diffi-    cally are employed by clinic companies,
cult for some clinic staff to transition. “The   specialists almost always work as contrac-
challenge was that we had occupational           tors, and their clinic hours are an extension
nurses trained a certain way, and every-         of their community practice. The types
thing was about work injuries. The focus         of specialists who practice on site vary
was on taking care of the injury and getting     widely depending on employer priorities
the person out [and back to work]. Over          and workforce demographics. For example,
time, we needed a new skill set to deal with     employers with an older workforce often
                                                                                                    In recruiting PCPs for clinics,
the person as a whole person. Some provid-       make cardiologists available on site.
ers were able to make that jump, and others                                                         experts noted that clinics have
could not.”                                      Start-up Challenges
    In recruiting PCPs for clinics, experts      Most respondents observed that one of the          some important advantages
noted that clinics have some important           biggest challenges to establishing a work-
advantages over typical community-based          place clinic is the initial capital outlay. The    over typical community-based
practices: a salaried arrangement, a con-        cost of building or remodeling the physical
trollable lifestyle, and the elimination of      plant and installing equipment varies wide-
                                                                                                    practices: a salaried arrange-
dealing with malpractice insurance and           ly, ranging from several hundred thousand
                                                                                                    ment, a controllable lifestyle,
many administrative hassles. Perhaps most        to many millions of dollars. Even at the low
importantly, the clinic offers what one          end, smaller employers may find it hard to         and the elimination of dealing
medical director called the opportunity to       overcome this barrier.
“get off the hamster wheel…[by] spending             Proper scale and scope. Experts empha-         with malpractice insurance and
time with patients…counseling and not            sized the importance of employers identi-
being productivity-incented.” Several clinic     fying and achieving the appropriate scale          many administrative hassles.
vendors noted that these traits are highly       and scope of services in developing and
appealing to PCPs, making it relatively easy     launching workplace clinics. Before install-
to recruit top candidates. However, in rural     ing a clinic, an employer must take stock
areas with provider shortages, it may be         of its physical plant and decide whether
hard to attract PCPs. As one expert noted,       its existing space can be reconfigured or
“If you’re in the middle of Oklahoma and         whether a new build-out is necessary. The
there are no doctors there today and you         employer must also determine who will be
want to put a clinic there now, it’s not going   eligible to use the clinic. Will it serve onsite
to make any difference—an onsite clinic          employees only or employees from other
can’t guarantee our ability to recruit some-     sites, as well as dependents, retirees, and/
one into our area and, if we can, the logis-     or contractors? This decision has important
tics could be expensive.”                        implications for the size and ultimate cost
    Some experts observed that clinic staff      of the installation.
turnover poses a serious barrier to achiev-          In terms of the scope of clinic services,
ing the trusted clinician model. Particularly    some employers incorporate a comprehen-


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Center for Studying Health System Change                                                          Research Brief No. 17 • December 2010




                                           sive array of ancillary services—such as lab-       Capital expenditure for clinics can rise
                                           oratory, imaging and pharmacy—as part of        substantially, not only because of the types
                                           the clinic. These additional offerings, which   of services provided, but also because some
                                           can dramatically raise a clinic’s price tag,    employers want to create as upscale a clinic
                                           tend to be cost-effective only for very large   environment as possible to bolster their
                                           worksites. In 2007, Toyota Manufacturing        corporate image. One large employer noted
                                           of America reported investing roughly $9        that every aspect of its clinic—from the
                                           million to launch its Center for Living Well    award-winning architecture to the latest
                                           in San Antonio, which serves roughly 7,000      imaging technology—was designed to be
                                           eligible employees, contractors and their       state-of-the-art to reinforce the company’s
                                           dependents. It is a 20,000-square-foot facil-   high-quality image among employees.
                                           ity that supports a laboratory, digital radi-       Whether an employer opts for the
                                           ology and a full-blown pharmacy as well         deluxe or the basic, experts stressed that the
                                           as primary care, dentistry, optometry and       physical environment of a workplace clinic
Capital expenditure for clinics
                                           physical therapy.6 A Toyota representative      needs to be accessible, pleasant and com-
can rise substantially, not only           indicated that the company achieved break-      fortable, and provide privacy if the clinic
                                           even in direct medical costs after roughly      is to attract patients. A benefits consultant
because of the types of servic-            2.5 years and also benefited from increased     observed, “We’ve heard complaints, like the
                                           employee satisfaction and reduced absen-        clinic is cramped [or] unappealing; some
es provided, but also because              teeism.                                         have locations that are not optimal—a
                                               According to most respondents, how-         basement location, for instance—or some
some employers want to create
                                           ever, it rarely makes sense for the typical     have a waiting room with a wall of glass.
as upscale a clinic environment            employer to implement clinics with a            While waiting for the nurse or doctor, they
                                           comprehensive array of ancillary services.      can be seen by coworkers walking by and
as possible to bolster their cor-          In one case, a vendor implementing a            they would rather not [have to] answer
                                           workplace clinic advised the client against     questions later.”
porate image.                              installing extensive laboratory services,           Getting patients through the door.
                                           which the vendor judged unlikely to be          Attracting patients is one of the most
                                           cost-effective for a population of 1,300        important challenges for new workplace
                                           employees. The employer went forward            clinics. As one clinic vendor observed, “You
                                           despite the recommendation, and some            can’t assume that once you build it, they
                                           laboratory services, such as measurements       [employees] will come.” Lack of awareness
                                           of thyroid function, eventually were discon-    among employees is a key issue, particu-
                                           tinued because of low utilization. Similarly,   larly when launching a clinic. One benefits
                                           providing extensive onsite imaging or phar-     consultant stressed the need for outreach
                                           macy services may be practical for very         using a variety of methods to connect with
                                           large worksites in smaller communities          different types of employees, including
                                           with few community-based alternatives but       e-mail, newsletters, bulletin boards, fliers,
                                           less so in urban areas where many alterna-      home mailings, health fairs and informa-
                                           tive providers are easily accessible. Rather    tion sessions. At the MillerCoors plant in
                                           than operating full-blown pharmacies,           Milwaukee, new employees receive a tour
                                           clinics usually offer onsite dispensing of a    of the clinic during orientation, and every
                                           limited number of commonly prescribed,          few weeks, a clinic provider sends personal-
                                           pre-packaged medications and also may           ized letters welcoming new employees and
                                           arrange for prescription deliveries from        encouraging them to use the clinic. One
                                           local pharmacies.                               expert suggested that having senior corpo-




                                                                 8
Center for Studying Health System Change                                                          Research Brief No. 17 • December 2010




rate leaders use the new clinic in a highly     the clinic also may stem from perceptions
visible manner is an effective way to boost     that the quality of care delivered onsite is
awareness and interest among the work-          inferior. “The mindset is that only second-
force. Outreach to dependents is even more      or third-rate doctors work at the clinic; if
challenging, because many of the commu-         they were top-notch they would work in
nication channels do not apply.                 their own practice,” a benefits consultant
    Even when employees are aware of            said.
clinics, they may hesitate to use them.             Given that it may take time for clinics
Skepticism of employers’ motives for            to attract patients, respondents stressed
launching clinics is a key reason why           the need for employers to plan activi-
employees may steer clear. This tends to be     ties designed to generate interest and get
an issue particularly when there has been a     patients in the door. A benefits consultant
history of adversarial relationships between    highlighted several strategies: preventive
management and labor. In cases where            screening reminders, flu vaccinations and
                                                                                                Several experts emphasized
workplace clinics have expanded beyond an       health risk assessments with follow-up
occupational health foundation to encom-        health coaching.                                that word-of-mouth recommen-
pass wellness and primary care, the legacy          Experts observed that predicting utiliza-
of the “company doctor,” whose objective        tion can be a challenge at the outset. While    dations from other employees
was to get people back to work quickly and      it often takes time for clinics to develop a
avoid workers’ compensation claims, can         following, the opposite can happen: The         are ultimately the most powerful
hinder the clinic’s success, according to one   presence of lower-cost, convenient care at
corporate medical director.                     the workplace can lead to an initial spike      tool in developing trust. They
    Mistrust also can arise from employees’     in demand, especially in communities
                                                                                                also noted that it is a tool that
concerns about potential misuse of person-      with provider shortages or other access
al health information. They may worry that      barriers. One vendor working with many          takes time to develop and
data collected in the clinic will be shared     clients located in primary care shortage
with their employer and have negative           areas noted that up to half of clinic users     requires patience.
consequences, including job loss. Experts       reported having no primary care provider
emphasized that employers need to expect        or having one but not seeing them recently
these concerns and work with vendors to         because of long appointment wait times
ensure that the handling of confidential        or other negative experiences. People who
employee data fully complies with federal       otherwise would not have sought care may
and other regulations and then commu-           suddenly flock to the clinic. Shortly after
nicate clearly with employees about these       opening, the onsite clinic for Charlotte
protections.                                    County Public Schools in Florida was
    Several experts emphasized that word-       flooded with employee calls complaining
of-mouth recommendations from other             they couldn’t get an appointment soon
employees are ultimately the most powerful      enough.
tool in developing trust. They also noted
that it is a tool that takes time to develop     Other Key Challenges
and requires patience. As one clinic direc-     As previously mentioned, when develop-
tor observed, “You need enough people to        ing onsite clinics, employers must decide
come in and have a great experience every       who will be eligible to use them. To some
time [and] talk about it. The No. 1 best way    employers, making clinics available to
for a new practice [to grow] is [through]       dependents of employees is critical because
word of mouth.” Employee hesitation to use      a significant portion of health care spend-



                                                                      9
Center for Studying Health System Change                                                            Research Brief No. 17 • December 2010




                                           ing is for family members rather than             to a younger and healthier demographic
                                           employees.                                        profile.
                                               Employers seeking to open clinics to              Experts emphasized the importance of
                                           dependents face many practical prob-              conducting regular and ongoing evaluation
                                           lems. First, there is the issue of capacity:      of clinic utilization and performance. At
                                           to broaden clinic eligibility to dependents       Pitney Bowes, for example, a clinic execu-
                                           typically requires a clinic at least twice the    tive frequently reviews the number of visits
                                           size of an employee-only facility. Employers      and hours of operation to estimate an inter-
                                           also face access, security or safety concerns.    nal efficiency index and determine whether
                                           One consultant noted that clients in the          staffing levels and clinic hours need to be
                                           aerospace and government defense indus-           adjusted. Many employers and vendors
                                           tries could not let non-employees on site         survey employees on a regular basis to
                                           for security reasons, while clients in heavy      gather information about their satisfaction
                                           industry and the chemical industry could          and perceptions of the clinic to determine
Achieving the appropriate
                                           not allow access for safety reasons. Some         what is working well and identify areas
scale and scope of services                employers have addressed these concerns           for improvement. Employers and ven-
                                           by locating clinics on the perimeter of their     dors reported very high satisfaction levels
is important not only when                 campuses to accommodate non-employees;            among clinic users, often in the range of 96
                                           however, many other employers continue            percent or higher. However, one employer
launching a new clinic but also            to grapple with this issue. Experts noted         cautioned, “There is clear selection bias
                                           that in some cases, employers are hesitant        when doing a survey [of clinic users]. Users
throughout its life cycle.
                                           to extend clinic benefits to non-employees        are typically satisfied, otherwise, they’re
                                           because, when launching a clinic, they            not using the clinic.” This respondent sug-
                                           prefer to “dip their toes in the water” by        gested an alternative measure of the clinic’s
                                           first establishing the clinic successfully on a   popularity: the levels and changes in the
                                           smaller scale for employees only.                 proportion of the total eligible population
                                               Experts agreed that retiree eligibility for   that uses the clinic.
                                           onsite clinics is increasingly rare—reflect-          As noted earlier, even when an employer
                                           ing the steep decline in employer coverage        outsources clinic management and opera-
                                           of retiree health benefits. Many of the same      tions to a third-party vendor, the employer
                                           challenges that apply to dependents also          needs to remain engaged in clinic opera-
                                           apply to retirees, including space, security      tions and outcomes. As one benefits con-
                                           and accessibility limitations.                    sultant noted, “You [the employer] cannot
                                               Achieving the appropriate scale and           simply plop the clinic in place and walk
                                           scope of services is important not only           away. You need to be invested.” Many
                                           when launching a new clinic but also              respondents agreed, noting that what-
                                           throughout its life cycle. A clinic may need      ever entity runs the clinic, the employer
                                           to increase hours or add staff as its eligible    ultimately owns the clinic, and strong,
                                           population grows or as the facility becomes       ongoing oversight and support by senior
                                           more popular with employees. Conversely,          leadership are key to the clinic’s survival
                                           a clinic may need to downsize if the work-        and success. In recognition of this fact,
                                           force shrinks or its composition changes.         one large employer noted that its benefits
                                           For example, in a worksite that transitioned      director holds biweekly meetings with the
                                           from manufacturing toward more white-             clinic vendor to discuss operational and
                                           collar work, demand for clinic services           budget issues, track progress, and identify
                                           declined as the employee population shifted       and resolve problems. A vendor who pro-




                                                                  10
Center for Studying Health System Change                                                            Research Brief No. 17 • December 2010




vides turnkey clinic services but stressed        vices through employed physicians. State
the importance of employer engagement             laws also vary in terms of credentialing and
said, “We take [this approach] so far that        oversight requirements for mid-level pro-
we have [employers] interview the final           viders, such as nurse practitioners, which
candidates for the nurse practitioners and        can impact clinic staffing models.
physicians, because the clinic becomes an             Variations in state laws present a chal-
extension of HR [in the] organization.”           lenge for employers with locations across
   Finally, several respondents stressed          state lines. While different clinics can be
that senior corporate leaders need to find        tailored to different regulatory environ-
the right balance between too little and too      ments, in some cases, employers find it
much engagement, noting that excessive            simpler to standardize across sites. For
involvement in day-to-day clinic operations       instance, Pitney Bowes is prohibited
or insistence on unreasonable timeframes          from extending clinic services to non-
for returns on investment are counterpro-         employees in Connecticut under the state’s
                                                                                                  There is no single industry
ductive.                                          Department of Labor licensing regulations,
                                                  and the company has carried employee-           standard for measuring return
Government Regulations                            only eligibility over to clinic locations in
Affecting Workplace Clinics                       other states.                                   on investment, or ROI, on work-
In sponsoring onsite clinics, employers
have to navigate a complex array of medi-         Impact of Workplace Clinics                     place clinics, so it is important
cal, labor, real estate and data security regu-   Accurately measuring the impact of a
                                                                                                  for employers—before launch-
lations, at both federal and state levels. This   workplace clinic is complex and difficult
is one reason that employers often out-           for employers. Respondents observed that        ing or expanding clinics—to
source clinic management and operations           there is no single industry standard for
to vendors with more expertise in handling        measuring return on investment, or ROI,         scrutinize alternative ROI
these regulatory issues. At the federal level,    on workplace clinics, so it is important for
regulations guaranteeing the privacy of           employers—before launching or expanding         calculation methods and reach
employee health records are among the             clinics—to scrutinize alternative ROI calcu-
                                                  lation methods and reach agreement with
                                                                                                  agreement with vendors about
most important compliance requirements
for workplace clinics. Several respondents        vendors about which method to use. Two
                                                                                                  which method to use.
also raised concerns that federal regula-         types of ROI are typically estimated: “hard
tions governing health savings accounts           ROI,” which measures savings in direct
(HSAs) might pose a barrier to optimal use        medical costs only, and “soft ROI,” which
of workplace clinics (see box on page 12 for      also includes productivity gains from such
more about this issue).                           factors as reduced absenteeism.
    In addition to federal requirements,              The expected timelines for achieving
employers must abide by state and local           breakeven on hard ROI depend in part
regulations that govern many aspects of           on the scope of clinic services. For clinics
clinic operations, including licensure of         exclusively focused on wellness, several
health care facilities and providers, data        experts suggested that employers should be
privacy and access, disposal of biomedical        ready to take a loss on hard ROI in the first
waste, handling of laboratory specimens           year or two, break even in the next year or
and storage, and dispensing of pharma-            two, and begin to see reasonable returns
ceuticals. Some states have corporate             only in the fourth and fifth year—in large
practice of medicine laws that restrict or        part because positive impacts on employee
prohibit corporations from providing ser-         lifestyles and health take time.7 Employers



                                                                       11
Center for Studying Health System Change                                                              Research Brief No. 17 • December 2010




                                                                                                clinic users vs. non-users. However, they
Health Savings Account Rules and Workplace Clinics
                                                                                                noted that this approach is confounded by
HSAs are tax-exempt accounts that must be linked to health plans with high deductibles          two problems: sample-size constraints and
(at least $1,200 for individual coverage and $2,400 for family coverage in 2010). Under         selection bias—the latter because clinic use
IRS rules, enrollees in HSA-eligible plans must pay full market value for medical care          does not tend to be random. Instead, some
until they have met the entire deductible; the only exception is for certain preventive         clinic programs, such as wellness activities,
services—such as annual physicals, screenings and immunizations—for which cost                  often attract healthier and more health-
sharing can be waived under a preventive care safe harbor. Some employers suggest               conscious employees, while others, such
that these regulations create a barrier to workplace clinic use, when part or all of their      as disease management, tend to attract
workforce is enrolled in HSA-eligible plans. While employers typically aim to reduce            sicker employees. Trying to disentangle
or waive out-of-pocket fees for clinic users to encourage utilization, this would be pro-       these separate, opposing effects makes it
hibited under IRS rules unless the services are preventive. Many employers have sought          difficult to correct for selection bias when
IRS clarification about the definition of preventive care and urged the IRS to expand its       comparing costs between clinic users and
definition of preventive care.                                                                  non-users.
    Meanwhile, employers that have adopted the most conservative interpretation of the              Isolating the impact of workplace clin-
IRS regulations have established, in their clinics, separate cost-sharing arrangements          ics is further complicated by the fact that
for employees enrolled in HSA-eligible plans vs. other plans. For example, Highmark, a          these programs are seldom implemented
Pennsylvania health insurer with onsite clinics for its employees, provides clinic services     by employers in a static environment. In
free of charge to preferred provider organization (PPO) enrollees but uses a fee sched-         particular, employers seeking to contain
ule to charge HSA-plan enrollees who have not met their deductible and who receive              costs often introduce concurrent benefit
services that are not clearly preventive. Highmark representatives said this two-tier           design changes. As a result, some ROI cal-
approach can be confusing to employees and may discourage HSA-plan enrollees from               culations might mistakenly attribute cost
using the clinic.                                                                               reductions to clinic use when these savings
    Other employers have taken a more aggressive tack with respect to HSA regula-               might have been caused by benefit design
tions. One employer, after consulting with legal counsel, determined that all services at       changes or other factors.
the clinic could be considered preventive, and therefore exempt from the deductible,                Estimating indirect benefits of work-
provided that each visit includes a brief discussion about the employee’s health risk           place clinics from productivity gains can
assessment. Many experts considered this to be a risky, overly broad interpretation of          be equally challenging. As one expert
the safe harbor—one that may ultimately jeopardize the tax-exempt status of employees’          noted, “Over time, productivity rises in
HSAs. It should be noted that not all experts viewed current IRS guidelines as a serious        the workplace due to all sorts of changes…
obstacle. As one benefits consultant noted, “It’s still more convenient to [obtain care] at     maybe it’s better software, or better train-
work at the same cost” as out in the community.                                                 ing…You can’t ascribe all that to [the clin-
                                                                                                ic].” Also, while time savings from using an
with high staff turnover generally will not     dents were reluctant to generalize about        onsite clinic instead of a community-based
achieve positive ROI.                           the magnitude of hard ROI that could            provider can be substantial—respondents
   For clinics providing primary care, most     be achieved, noting the wide variation in       commonly cited estimates of only 30-60
experts said reaching breakeven on hard         clinic models, workforce demographics           minutes away from the job compared with
ROI can be achieved earlier, because of the     and other characteristics. According to one     at least 2.5 hours—this may be less of a
opportunity to impact provider practice         prominent benefits consultant, “Some ven-       factor in certain professions, such as white-
patterns, such as drug prescribing and          dors have floated… lofty ROI figures—3:1,       collar jobs where work hours and assign-
specialty referrals, and the ability to use     5:1, upwards of 7:1. That’s really getting to   ments are flexible.
early diagnosis and treatment to prevent        be unrealistic…Many have had to temper              Because of these limitations, alterna-
more expensive downstream costs. Some           their numbers.” This consultant suggested       tive measures of impact are commonly
experts suggested that breakeven on hard        that, in an equilibrium state, hard ROIs        used. One method estimates the difference
ROI could be achieved in the first year, but    between 1 and 2 were more realistic.            between the employer’s projected health
most believed a range from two years to             Some experts measure the impact of          care cost trend without the clinic and the
five years to be more realistic. Most respon-   ROI by comparing overall health costs for       actual cost trend with the clinic in place.


                                                                     12
Center for Studying Health System Change                                                           Research Brief No. 17 • December 2010




Employers taking this approach often            seldom concentrated at a single worksite—
benchmark their trends against those of         meaning that an “onsite” clinic can actually
similar companies in their community or         be several miles offsite for many employees.
industry, or against other worksites (with-     Despite the lack of onsite convenience,
out clinics) within their own company.          experts noted that employees may still
However, making accurate comparisons            be drawn to the clinic for other reasons.
may be complicated by differences in work-      For instance, the Charlotte County Public
force or benefit design changes, among          Schools found that employees flocked to
other factors.                                  the workplace clinic to save on out-of-
    Another increasingly common approach        pocket costs because all services are free.
to measuring impact is to examine the           Other experts noted that clinic users often
changes in an employee population’s health      are willing to travel some distance to the
risk factors over time. Dow, for example,       clinic when it serves as a “one-stop shop”
tracks multiple risk factors ranging from       for a variety of medical needs or provides
                                                                                                 Several employers with work-
biometric data, such as blood-pressure and      services that are not readily accessible else-
cholesterol levels, to self-reported mea-       where in the community.                          place clinics emphasized the
sures, including stress and diet. Employers         Employers join forces to operate clin-
can also track risk factors separately for      ics. Interest among employers in joining         importance of considering the
clinic users vs. non-users, using methods to    together to cosponsor clinics is an emerg-
adjust for selection bias.                      ing trend. Many respondents referred to          broader impact, including the
    Several employers with workplace clin-      minimum size thresholds needed for onsite
                                                                                                 effects that clinics have on
ics emphasized the importance of consid-        clinics to be economically feasible. These
ering the broader impact, including the         estimates ranged from the high hundreds          employee loyalty and morale
effects that clinics have on employee loyalty   to several thousands of workers. Among
and morale and on enhancing the firm’s          employers that fall below these thresholds,      and on enhancing the firm’s
reputation and brand.                           there has been interest in collaborating
                                                with other employers under a near-site           reputation and brand.
Recent Trends                                   model. This type of collaboration can take
High public employer interest. In recent        a variety of forms: one employer can spon-
years, interest in workplace clinics has been   sor its own clinic and make the services
especially high among public employers,         available to employees of other nearby
including municipal governments and             companies; alternatively, several employers
school systems. Because public employ-          in the same office or manufacturing park
ers tend to have low staff turnover and to      can cosponsor a shared clinic in a mutu-
maintain rich health benefits compared to       ally convenient, neutral location. There are
the private sector, they have strong moti-      even cases of industry competitors collabo-
vation to use workplace clinics to contain      rating on clinics—rival mining companies
costs and to keep employees healthy. Like       currently cosponsor clinics in Colorado,
their counterparts in the private sector,       Nevada and Wyoming.
public employers have implemented a vari-           Shared clinics are appealing to many
ety of clinic models, with some focusing        employers—particularly mid-sized employ-
exclusively on wellness and others offering     ers—because they require a smaller finan-
more comprehensive primary care.                cial commitment, but experts noted that
   Whatever the scope of their clinic           employers considering these arrangements
services, one challenge that many public        face several key challenges. First, it can
employers share is that their employees are     be difficult to identify potential partners



                                                                     13
Center for Studying Health System Change                                                         Research Brief No. 17 • December 2010




                                           that share similar business requirements,      dors, but experts noted that no successful
                                           philosophies of care delivery and levels of    clinic is completely a turnkey operation.
                                           corporate commitment. Also, an expert          Senior leaders not only need to provide
                                           noted that it can be challenging to get dif-   active, visible support at start-up but also
                                           ferent employers, each “with [their own]       need to remain engaged throughout the life
                                           brands and egos, to play nicely in the same    of a clinic. Achieving the appropriate bal-
                                           sandbox.” As a result, despite what seems      ance between too much and too little cor-
                                           to be keen interest from many employ-          porate involvement is a challenge. Without
                                           ers, collaborative clinics remain relatively   micromanaging, employers need to keep
                                           uncommon.                                      vendors accountable while also providing
                                               For employers without the critical         the support and resources necessary for the
                                           mass to sponsor a full-time clinic, another    clinic to thrive.
                                           emerging option is the use of mobile               Gaining employee trust is key to clinic
                                           medical vans that travel to different work-    acceptance. When clinics are first intro-
For employers without the criti-
                                           sites—an approach being piloted by both        duced, employees may be mistrustful of
cal mass to sponsor a full-time            established clinic vendors and start-up        employer motivations, concerned about
                                           companies. The use of mobile vans in the       personal data confidentiality and skeptical
clinic, another emerging option            workplace is still in a very early stage of    about quality of care. Employers need to
                                           development, but some experts find the         expect these concerns, communicate clearly
is the use of mobile medical               concept promising.                             and honestly about how the clinic fits into
                                                                                          the company’s core business strategies and
vans that travel to different              Key Takeaways                                  demonstrate convincing evidence of patient
worksites—an approach being                Among the common themes that emerged           privacy protections. Employers also need
                                           from interviews with industry experts and      to be patient in allowing employee trust to
piloted by both established                employers sponsoring workplace clinics,        be built through first-hand personal expe-
                                           the following stand out:                       rience and recommendations from early
clinic vendors and start-up                    The trusted clinician model of wellness/   clinic users.
                                           primary care delivery hinges on having             Investing in the appropriate scope and
companies.                                 the right staff. One of the most promising     scale of clinic services is challenging but
                                           aspects of workplace clinics is their poten-   essential. At start-up, some employers take
                                           tial to transform the delivery of wellness,    such a cautious and incremental approach
                                           disease management and primary care            that the clinic makes little impact on
                                           by developing a relationship between the       care delivery or cost containment. Other
                                           patient and the trusted clinician, who may     employers take a no-expenses-spared
                                           be a primary care physician or other health    approach, building state-of-the-art facilities
                                           provider. Through longer, more frequent        with comprehensive ancillary services—an
                                           face-to-face encounters that emphasize         approach that might pay off in reputation
                                           holistic rather than acute, episodic care,     and brand but makes it difficult to recoup
                                           this model distinguishes itself from most      direct medical costs. Throughout the life
                                           community-based care. Achieving this           of a clinic, services and staffing need to be
                                           model is contingent on finding and retain-     monitored and adjusted to meet changing
                                           ing clinic staff with the right skills and     business needs or shifting workforce demo-
                                           qualities.                                     graphics.
                                               Whoever runs the clinic, sustained             Employers should be realistic about
                                           employer engagement is critical to success.    return on investment and that measure-
                                           Most employers outsource clinics to ven-       ment poses challenges. While some argue




                                                                 14
Center for Studying Health System Change                                                          Research Brief No. 17 • December 2010




that clinics can achieve a positive ROI         uncertain, and, in situations where gains
in the first year, many experts suggested       are most likely—low turnover and highly
that employers should not expect to break       engaged employers—the likely positive
even for at least two years or possibly lon-    returns provide sufficient employer motiva-
ger, especially if conservative measures of     tion to pursue programs. The major impact
hard ROI (direct medical costs) are used.       of subsidies might be stimulating programs
Employers should not look to clinics as a       less likely to succeed.
quick fix for high health costs, because sav-       Workplace clinics that provide primary
ings from population health improvement         care have the potential to improve access to
take time, even in the most effective pro-      care for eligible employees and dependents,
grams. In addition, some experts estimated      but some observers have expressed concern
hard ROIs for many clinics range between 1      about the potential aggregate impact that
and 2, suggesting that while well-designed,     clinics may have on community-based
well-implemented clinics may prove wise,        primary care in the surrounding areas. If
financially viable investments for employ-      onsite clinics continue to grow and a great-
                                                                                                A central policy question con-
ers, the magnitude of savings is unlikely to    er portion of primary care for well-insured
                                                                                                cerning workplace clinics is
make clinics “game changers” in bending         patients continues to shift to the workplace,
the cost curve substantially overall. There     their concern is that primary care prac-        whether the model of employer
are many challenges in accurately capturing     tices in the community will be left with an
ROI or alternative measures of impact, and      increasingly less viable payer mix.9 This is    -sponsored wellness and
because workplace clinics are often imple-      an issue for policy makers to be aware of as
mented in conjunction with other benefit        they consider whether to actively encour-       primary care delivery is likely
changes, isolating the impact of clinics on     age the growth of workplace clinics.
                                                                                                to function more effectively with
employer cost trends may not be possible.           Growth in onsite primary care clinics
                                                also has the potential to exacerbate short-     or without active encourage-
Policy Implications                             ages of community-based primary care
A central policy question concerning            physicians and other providers in some          ment from government.
workplace clinics is whether the model of       areas. This concern is likely to become
employer-sponsored wellness and primary         more acute over the next few years, with
care delivery is likely to function more        demand for primary care expected to
effectively with or without active encour-      increase substantially as perhaps 30 million
agement from government. The new fed-           or more people gain coverage nationwide
eral health care reform law contains provi-     under health reform.
sions facilitating workplace-based wellness
programs8—reflecting the view of many           Notes
policy makers that such programs merit          1. Watson Wyatt Worldwide, Companies
some degree of federal support—but there           Not Fully Tapping Potential of Onsite
are some in the workplace clinic industry          Health Centers, Press Release,
and the employer community who sug-                Washington, D.C. (March 19, 2008);
gested that the new legislation has not done       Mercer, Survey on Worksite Medical
enough to promote such programs. These             Clinics (2008); Towers Watson, 2010
proponents contended that the federal              Health Care Cost Survey, Workforce
government should support employer-                Health 2010: New Deal, New Dividend
sponsored wellness programs through tax            (February 2010).
credits. However, the evidence to date sug-
                                                2. It is not surprising that the population
gests that the gains from such programs are
                                                   estimate of clinic use is substantially



                                                                      15
Center for Studying Health System Change                                                        Research Brief No. 17 • December 2010




                                              lower than the large-employer estimates        deemed appropriate by the secretaries
                                              of clinic implementation. Among other          of the U.S. Treasury, Labor and Health
                                              reasons, many Americans are employed           and Human Services departments.
                                              by small or mid-sized companies
                                                                                         9. Terry, Ken, “Worksite Clinics—The
                                              that typically are not candidates for
                                                                                            Next Threat?” Physicians Practice, Vol.
                                              workplace clinics, and among people
                                                                                            19, No. 7 (May 2009).
                                              with access to workplace clinics, many
                                              choose not to use them.

                                           3. Gunsauley, Craig, “Home-Grown
                                              Network: Building a Better Health
                                              Benefit, Perdue Farms Contracts
Funding Acknowledgement: This
                                              Directly with Physicians and Hospitals,”
research was supported by the
                                              Employee Benefit News, Vol. 15, No.
Robert Wood Johnson Foundation’s
                                              9 (July 2001); Wells, Susan J., “The
Changes in Health Care Financing
                                              Doctor is In-House,” HR Magazine, Vol.
and Organization Initiative, which is
                                              51, No. 4 (April 2006).
administered by AcademyHealth.
                                           4. McCarthy, Douglas, and Sarah Klein,
                                              QuadMed: Transforming Employer-
                                              Sponsored Health Care Through
                                              Workplace Primary Care and Wellness
                                              Programs, The Commonwealth Fund
                                              (July 2010).

                                           5. Schilling, Brian, Is an Onsite
                                              Clinic Right for Your Firm? The
                                              Commonwealth Fund (May 2010).

                                           6. Glabman, Maureen, “Employers Move
                                              Into Primary Care,” Managed Care, Vol.
                                              18, No. 6 (June 2009).

                                           7. Tu, Ha T., and Ralph C. Mayrell,
                                              Employer Wellness Initiatives Grow, But
                                              Effectiveness Varies Widely, Research
                                              Brief No. 1, National Institute for
                                              Health Care Reform, Washington, D.C.
                                              (July 2010).

                                           8. PPACA includes $200 million in grants
   RESEARCH BRIEFS are published by           to allow small businesses (with fewer
   the Center for Studying Health
   System Change.                             than 100 employees) to implement
                                              wellness programs. In addition, under
   600 Maryland Avenue, SW                    PPACA, maximum wellness incentives
   Suite 550
   Washington, DC 20024-2512                  will be increased to 30 percent (from
   Tel: (202) 484-5261                        the current level of 20 percent) of the
   Fax: (202) 484-9258                        total premium by 2014, with the pos-
   www.hschange.org
                                              sibility of raising the maximum incen-
   President: Paul B. Ginsburg                tive up to 50 percent of the premium if



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