Many health plan sponsors are frustrated by high group medical costs and are losing sleep over the potential cost implications of health care reform.
Some plan sponsors adopt a short-term solution by shifting costs to employees in the form of high-deductible plans that result in increased out-of-pocket costs, but that can damage morale when limited wage increases are consumed by higher medical plan contributions and out-of-pocket expenditures, says Joseph Marlowe, senior vice president, Aon Consulting.
“Cost shifting to employees does not address two root causes of the medical cost problem,” he says. “The majority of the increase in health care spending during the past 15 years is due to unhealthy behaviors contributing to more chronic disease. In addition, the medical delivery system is not efficient.”
Progressive plan sponsors are exploring on-site health centers in response to both challenges. Plan sponsors with as few as 700 employees in one location can generally make a business case for having a full-time clinical presence on site, while those with fewer employees are so attracted to the offering that they resort to a part-time clinician.
Smart Business spoke with Marlowe about how having a clinical presence on site can not only benefit the employees, but the employer, as well.
What does a typical on-site health center offer?
On-site health centers mimic a primary care (e.g., family practice) physician’s office, with one or more treatment rooms and basic diagnostic and laboratory equipment. It may be staffed with physicians and/or nurse practitioners and technicians. Centers serving a limited patient population may rely upon a nurse practitioner as the first-stage clinician. The typical on-site medical center offers:
- Routine medical care, including diagnosing medical conditions, prescribing medications, ordering radiology and laboratory studies, performing physical exams, repairing lacerations, drawing blood, performing minor office procedures such as biopsies, and conducting heart rate and blood pressure checks, etc.
- Immunizations
- Preventive screenings Health education, consultation and wellness (diabetes education, nutrition counseling, etc.)
- Chronic condition management
- Occupational health
Who operates the on-site health center?
Most plan sponsors contract with a management firm that hires clinical staff and provides the center with supplies, equipment and information systems. These firms are paid a management fee subject to a multiyear agreement.
Most decisions to outsource the service are driven by two primary considerations — privacy concerns on the part of employees who fear the use of confidential medical information in employment matters and minimizing medical malpractice exposure.