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On-site clinics expanding workplace services in effort to control health costs

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On-site clinics expanding workplace services in effort to control health costs

As they seek methods of controlling medical costs and improving employees’ overall health, many employers are taking a more thoughtful approach to offering on-site and near-site health care services.

The use of on-site primary and acute-care clinics, fitness centers, pharmacies and other health care services continues to be dominated by large employers, with small and midsize firms showing signs of receding from the market, according to several recent studies.

However, those same studies indicate companies of all sizes that do offer health care services on or near their worksites are becoming more ambitious in terms of the range of medical and wellness services they provide and how they administer them. Also, they are getting more sophisticated in the way they measure the success of those services.

Large employers leading the way

Studies published within the last 12 months show the percentage of employers investing in on-site health services for their employees tend to vary significantly according to staff size, with implementation rates as much as 15% to 20% higher among large employers compared with their small and midsize counterparts.

However, the trend lines those studies reveal also depend heavily on the demographics of the responding employers.

For example, 24% of employers with 3,000 or more full-time employees reported offering on-site health clinics to their employees, compared with 14% of employers with 100 to 2,999 employees and 9% of employers with fewer than 100 employees, according to the results of Eden Prairie, Minnesota-based Optum Inc.’s 2015 Wellness in the Workplace Study.

Similarly, 36% of large employers polled by Optum offered on-site fitness centers, compared with 31% of midsize employers and 17% of smaller employers.

Optum’s Wellness in the Workplace survey results — generated from a split between large employers (60%) and small and midsize employers (40%) — indicate a slight rise in the prevalence of on-site health clinics and fitness centers among small and midsize employers.

Conversely, studies weighted more heavily toward employers with fewer employees suggest that the percentage of small and midsize employers offering on-site health services actually has declined in recent years, largely due to constricting budgets and an increased focus on health care reform compliance, experts say.

According to the Alexandria, Virginia-based Society for Human Resource Management’s 2014 Employee Benefits Survey — of which, 80% of respondents reported having fewer than 2,500 full time employees — the percentage of employers offering on-site health clinics, fitness centers, seasonal flu vaccinations and other services has decreased by as much as 10% since 2010.

Expanding on-site clinical services

As employers continue to hone their strategies regarding on-site health services, the scope of services they offer to their employees has broadened substantially.

In addition to traditional on-site clinical services such as acute and urgent care, emergency first aid and occupational health care, many employers today also provide primary physician care, preventive and behavioral health services and pharmacy services through an on-site or near-site clinic, according to survey data published in February by the National Association of Worksite Health Centers, a Chicago-based nonprofit trade organization.

To increase the likelihood that employees will actually use the on-site health programs they provide, experts recommended employers closely examine and tailor their services according to a range of data sets, including past medical and pharmacy claims, health risk assessments and biometric screenings, as well as employee surveys and industry benchmarking data.

“It always comes back to the data,” said Beena Thomas, Atlanta-based vice president of health and wellness at Optum. “That’s going to drive the selection of services employers ought to be offering.”

When it comes to offering on-site health services, employers also are expanding their definition of success beyond a reduction in medical costs, a strategy that experts say typically makes it easier for benefit managers to secure an ongoing investment in those services.

“It really isn’t all about cost reduction anymore,” said Larry Boress, the worksite health centers association’s Chicago-based executive director.

According to the association’s 2014 Benchmarking Survey, 70% of employers providing on-site and near-site clinics said the clinics contributed to improvements in employees’ overall health, while 75% said their employees had become more engaged in worksite health and wellness programs.

“When you look at employers’ priorities in terms of offering on-site health services, we’re seeing a lot of companies trying to deal with health care access issues, productivity, population health and reducing unnecessary emergency room use,” Mr. Boress said. “Recruitment and talent retention are becoming a bigger and bigger part of this as well.”

Additionally, more than 95% of those employers also said the clinics had at least partially improved employee job satisfaction and productivity, according to the association’s survey.

“We’re struggling a little bit with measuring the overall cost impact at this time, but where we have seen a large impact is on efficiency, productivity and lost work time,” said Kate Schieldt, vice president of human resources at Stoughton Trailers L.L.C. in Stoughton, Wisconsin. “We’re working on adding metrics to determine what the financial gains might be from those improvements.”

Self-managing workplace clinics

Another way in which employers’ strategies regarding on-site health services has evolved in recent years is the approach they take to administering the services they offer, including how they choose to handle staffing and managing their on-site facilities.

According to worksite health centers association’s survey data, 30% of employers today have implemented some form of cost-sharing for on-site clinical services, compared with 12% in 2012.

Additionally, 38% of employers polled reported they have elected to self-manage the on-site clinical services they provide to employees, rather than use a third-party vendor or local health care provider.

Experts say that while the majority of employers that staff and manage their on-site clinical services internally tend to be larger firms, some small and midsize firms also have embraced self-management to control the upfront costs of offering an on-site clinic and tailor the services they offer more closely to their employees’ needs and health conditions.

“Doing this work on your own is something that a lot of employers probably can handle, but there’s a big cost-benefit analysis that goes with that,” Ms. Schieldt said. “In our case, we understood what it would cost to bring in a third-party vendor and decided that the best way forward for us in terms of cost savings was to do it ourselves.”

Conversely, experts say a majority of employers — particularly smaller ones — still elect to contract with a third-party vendor or local health care provider to staff and manage their on-site clinics, largely to reduce the administrative burden on their benefits personnel and dampen privacy concerns among employees.

“I actually think data security is one of the big reasons why most companies shop out the management of their clinics,” said Jill Micklow, a Chicago-based wellness consultant at Schaumburg, Illinois-based Assurance Agency Ltd. “Employees tend to feel more comfortable working with a third-party vendor, even if it’s only because of the perception of greater privacy.”

What lies ahead

Looking forward, experts say they expect large employers to continue expanding the types of health care services they offer on or near their worksites, as well as a growing preference for in-house administration of those services.

They also expect some manner of rebound in on-site health clinics among small and midsize employers, as they acclimate to new market conditions and administrative processes under health care reform, though some barriers are likely to persist.

“The persistent challenge that I see being a major part of it is the fear of the cost, and a lot of that depends on what kinds of services you’re going to offer, and whether you’re going to build something brand new or just renovate an existing structure,” Mr. Boress said.

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