Employees miss three to four hours of
work every time they visit the doctor,
which impacts productivity. But forgoing a doctor’s visit to avoid missing work is
not the best choice dedicated employees can
make for themselves or their employers. One
solution that’s gaining traction with employers is the on-site health center, which increases the prevalence of ongoing preventive care
and reduces time away from work.
“Employers are finding that the on-site center is a used and highly valued employee benefit,” says Teresa Wolownik, consulting actuary for the Group & Health Care Practice at
Watson Wyatt Worldwide. “Which is great
news because employers are seeing a reduction in nonproductive time by almost three
hours per visit and employees are receiving
high-quality health care.”
Smart Business spoke with Wolownik
about the benefits of on-site health centers
and how employers can explore the feasibility of and ROI from implementing one.
Why should employers implement an on-site
health center?
The 2007 annual survey conducted among
453 employers by Watson Wyatt Worldwide
and the National Business Group on Health
revealed that 21 percent of the surveyed companies presently have an on-site clinic and 28
percent expect to open one in 2008. I think
the reason behind the trend is that the clinics
provide numerous solutions. First, because
the on-site services can be delivered more
cost effectively than those delivered by outside physicians, the practitioners are able to
spend time focusing more on preventive and
lifestyle-related risk factors, not just treatment. Second, only one in four employees
currently seeks preventative care, which is
contributing to the rise in chronic illnesses,
such as diabetes. With services available at
the work site, more employees engage in preventive care services, receive ongoing management for current conditions and participate in smoking cessation or weight-loss programs. Third, employers and employees benefit from visiting a health care provider who
is fully integrated with a company’s program
and is familiar with its benefit plans. Last,
employees view the on-site health center as a
perk, which improves morale and retention.
Which companies are potential candidates
for an on-site health center?
We usually say that employers with a critical mass of 1,000 or more employees at a single location are candidates. However, there
are vendors that cater to smaller employers,
so it’s possible to adopt a scaled model that
focuses on health coaching with or without
disease management and still receive many
of the benefits. Most on-site centers are outsourced to third-party vendors, so employers
needn’t worry about additional liability, employee privacy issues or in-house expertise.
A design and feasibility study will help to
validate ROI. The analysis process includes:
- Engaging key stakeholders, such as representatives from legal, finance, benefits,
occupational health and real estate, in a
meeting to educate and define the objectives
for the center. Include consulting experts to
advise on the range of health center models
and third-party vendors and discuss considerations of eligibility, cost-sharing, integration
with other programs and data/measurement. - Shaping the center’s parameters, such as
whether it will be led by an M.D. or a nurse
practitioner. Knowledge of your employees
and their preferences is vital. - Conducting a claims history review to
help determine the types of services needed
and the estimated patient volume for the center. Extract key data concerning current cost
and frequency of visits, condition prevalence
and proximity to local physicians to estimate
adoption rates. - Leveraging the expertise of a clinician
with experience operating an on-site health
center. The needs and considerations of an
employer-based center are unique to those in
the outside community. The physician expert
helps you to define your desired ‘patient
experience’ and then reviews the data to determine the necessary health center resources and the estimated cost of providing them.
How is the ROI determined?
Once the volume of services is estimated
along with the cost, it’s compared against the
actual costs of purchasing those same services in the community, which can be validated
by the claims review data. Next, we look at
other savings opportunities, including productivity gains from employees missing less
work time to overall employee health
improvements. We typically see a 2-1 ROI
rate, meaning that if an employer spends
$500,000 for an on-site health center, it is seeing direct and indirect savings of $1 million.
What is the role of employers during the feasibility study and center implementation?
It’s important to have executive sponsorship from the beginning and an ongoing communications campaign. Second, it’s important to select an analysis partner that uses a
cross-functional team approach, which includes an experienced physician, an actuary
to evaluating community versus on-site services and an attorney to advise on compliance
issues. Select a partner who is also familiar
with integrating the on-site center with other
employer-based programs, such as EAP and
disease management, and who understands
the options around integrating data with your
insurance carrier and/or data warehouse.
Data capture is vital for accurate ROI validation once the center is operational.
TERESA WOLOWNIK is a consulting actuary for the Group & Health Care Practice at Watson Wyatt Worldwide. Reach her at (858)
523-5586 or [email protected].