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Big employers bring health care in-house

Convenient clinics encourage workers to get all of their preventative care at work

From the January-February ACP Observer, copyright © 2007 by the American College of Physicians.

By Paula S. Katz

Those half-dozen patients who call their doctor first thing in the morning, desperate to get an appointment that day for a sore throat or headache, increasingly have a new and, some say, more effective option: seeing a health provider in their company's onsite health clinic.

It's a new take on the old factory medical clinic that dealt primarily with on-the-job injuries. Buoyed by disease management and health promotion strategies, the new clinics have surged in popularity just in the past few years. According to a survey by the benefits consulting firm Watson Wyatt Worldwide Inc., 22% of organizations surveyed offered on-site clinics in 2005 or 2006, with an additional 5% of organizations planning to offer them in 2007.

Companies offering onsite clinics typically contract with outside firms that provide staffing, including a mid-level practitioner, physician assistant and, sometimes, a physician. Proponents call it a win-win proposition: employees benefit from better access to acute and preventative care while employers save on health care and related absenteeism costs.

Skeptics warn that widespread use of such clinics would leave private-practice internists with the burden of caring for critically ill patients without the higher revenue generated from acute care visits and routine exams. Plus, some are concerned that clinic care will be substandard and could disrupt continuity of care.

Physicians, especially those in more traditional smaller practices, may have reason to be wary.

"This is potentially a threat to the current concept of health care delivery," said Cynthia E. Harvath, MD, founder and president of Onsite Healthcare Corp., which is slated to open the first of up to 50 clinics this month at locations frequented by the traveling public. "It's a fine line between expanding on in-store clinic care and infringing on primary care," she acknowledged.

From coughs to diabetes

While the clinics may see patient problems specific to the company's industry-an airline company's baggage handlers may have related musculoskeletal injuries, for example-most company clinics address the acute care needs that internists typically see in their offices.

"You can come [to the clinic] for acute care, the same as you would go to a primary care physician, from headache to toenail fungus and anything in between," said Cornell Pearcy, MD, medical director at L3 Communications System's health clinic and an employee of CHD Meridian, a company that runs onsite clinics.

The clinics also see themselves playing a role in the following areas:

  • Prevention. During monthly lunches the clinics may bring in an endocrinologist to talk about diabetes or an orthopedic surgeon to discuss low back pain. Other programs include smoking cessation or weight management.
  • Chronic care. Some clinics manage patients with chronic care needs, such as by scheduling a standing once-a-week appointment to check a patient's blood sugar.
  • Occupational health. CHD Meridian offers return-to-work programs, disability and worker's comp programs, coordination with employee assistant programs, travel medicine, and now frequently work with the employer on programs dealing with natural disasters, workplace violence, terrorism and bioterrorism.

Those services are appealing to employers facing annual cost increases that peaked at 14.7% in 2002, and were still at 6.1% in 2006, according to a recent survey by Mercer Health & Benefits.

CHD Meridian, for example, runs more than 200 clinics for nearly 100 clients and plans to open 100 more clinics over the next couple of years. In addition, Cleveland-based Whole Health Management, Inc., another provider of on-site clinics, which currently runs 62 clinics for 26 clients, expects to triple the number of clinics over that same time period.

The clinics' specifics vary depending on the employer's needs and the patient population. Some say that clinics are only cost effective with at least 1,000 employees, but smaller companies are getting involved by joining forces to share a clinic. Most offer primary care and some offer pharmacy services.

For example, Harrah's Entertainment is slated to open its fifth Whole Health run clinic this month in its Las Vegas location, will have two physicians and two advanced practitioners to serve 10,000 employees. A physician will always be available, said Phillip Zinni, III, DO, Harrah's regional medical director.

The payoffs: convenience, costs

Like the increasingly omniscient retail store clinics, company clinics are growing because of convenience as well as costs.

For example, a mammogram "is a 20-minute exam that takes four hours," when the employee has to go offsite, said Dr. Kelly Victory, Whole Health's chief medical officer. Whole Health estimates wait time in its clinics to be less than 12 minutes. Some CHD-run clinics try to keep those waits down by calling employees just before the doctor is ready.

Plus, the onsite clinics make it convenient for employees to be seen right away for, say, a migraine that would otherwise make their day less productive. While the data is not firm, the amount of performance loss on a given day for a variety of reasons can reach 15% of the economy's productive capacity, noted Sean Sullivan, president and CEO of the Institute for Health and Productivity Management (IHPM) a non-profit organization with executive offices in Scottsdale, Ariz.

Companies tout their onsite clinics as a benefit, particularly in competitive fields. "Employees might think twice before moving to another company because of their relationship with the doctor and nurses in the health center two floors below them," said Raymond J. Fabius, MD, president and chief medical officer at CHD Meridian, an I-trax, Inc. company based in Chadds Ford, Pa.

Perhaps most significantly, companies that have operated onsite clinics for a year or more are seeing the hoped-for cost savings. So far, many clinics report a 3:1 return on investment within 12-18 months, said Dr. Victory. Harrah's Whole Health clinic in Lake Tahoe, Nev., which had a start-up cost of $1 million, is expected to break even in 12-18 months, said Juliet Vestal, Harrah's director of healthcare management.

CHD's clients save from 10%-20% on health care and pharmaceuticals per year, Dr. Fabius said. Hard data are pending publication in a peer review journal, yet, "We know that the presence of the on-site clinics significantly decreases both urgent care and emergency room visits," said Dr. Victory, a former trauma and emergency room specialist.

Dr. Fabius attributes improved outcomes to improved primary care access and improved compliance with medications, especially chronic medications.

Is it good enough?

Some question whether that gain comes at the expense of quality, continuity of care and the physician-patient relationship—problems that could raise costs in the long run.

For example, a patient who was already seen at the company clinic for back pain may later see his local physician for the same problem and could end up on two different medications at the same time, said Joseph W. Stubbs, FACP, one of eight internists at Albany Internal Medicine in Albany, Ga. Or, in clinics where a physician isn't always available, the nurse practitioner may not uncover the patient's complete picture of health. "It's not a well-greased machine," he said.

Plus, what happens after hours? For those clinics only open during regular business hours, a nurse call line or other backup may be available, but the patients may end up calling a physician in the community not familiar with the case, said Robert S. Wilkinson, Jr., MACP, a general internist recently retired after 44 years of practice.

He added that clinics that get involved in caring for patients' chronic illnesses may inadvertently interfere with the long-term care of that patient. For example, a patient may end up calling his personal physician at night or on the weekend for a problem that is being managed in the clinic.

If that patient has diabetes that has suddenly spiraled out of control because of an intercurrent infection, then the care is compromised, Dr. Wilkinson added. The physician has not seen the patient regularly and is not up to date on his or her overall health status, current prescriptions and recent laboratory results.

Those running the clinics counter that they hire only qualified staff and emphasize the unique relationship their doctors can have with employees. "The clinicians at the workplace are not only accessed in the office during clinical visits, but also in the hallway, parking lot and cafeteria," Dr. Fabius noted.

Clinic operators also say they adhere to evidence-based medicine standards and conduct chart reviews to monitor quality and comply with OSHA requirements. They make an effort to communicate with patients' community doctors, using electronic health records (EHRs), phone calls or faxes. "I see myself as a set of collaborative hands," Dr. Pearcy said. "If I can identify something, I would alert the employee to follow up with his physician."

Time to re-evaluate your practice?

It's not surprising that physicians, especially in a community where one large employer dominates the market, may feel threatened. "It's scary," Dr. Harvath, a pediatrician, acknowledged. Physicians may ask, "How can I compete with this freestanding low overhead clinic that can charge a fraction of what I'm charging for basic services?"

Remember, however, that company clinic physicians are contracted, not fee-for-service employees, said Dr. Reynolds, so they have no incentive to take over community doctors' patients. But sometimes it just works out that way. "In some cases, because of access and availability at our comprehensive primary care centers, patients do transfer their records and ... use us as a primary care provider," Dr. Fabius said.

"There's no question that what [the clinic] does is make the community physician look very critically at what he's doing to stay in the market," Dr. Victory said. If a patient is happy with his community physician and has no trouble getting an appointment, she noted, "then the community doctor shouldn't be concerned that the patient would leave to see someone else."

But if a physician is feeling threatened—solo practitioners or those in small practices with limited office hours may feel most vulnerable—they might want to adopt EHRs to increase efficiency, offer preferred appointment times and extend their office hours, according to those running the clinics and other industry experts.

Those monitoring the trend say physicians who see that line blurring in their community may be forced to consider ways, such as offering evening and weekend hours, to stay viable in a changing health care marketplace.

Or, the trend might inspire some physicians to consider a career move: working for an onsite clinic and reaping the benefits of reduced hours, malpractice coverage, and not having to track how many patients they see per hour.

"It allows physicians to practice health care free from the distraction of third-party payer system and focus on what they were trained to do: make people better," Dr Victory said. "It's the way practicing medicine is supposed to be."

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Clinics may attract workers and keep them productive

Walking into Freddie Mac's 1,250-square-foot health clinic in Washington, DC, may feel familiar. Beyond the receptionist's desk are two exam rooms, a lab and all the trappings of a typical physician's office including emergency equipment, oxygen tanks, a defibrillator and pregnancy kits. But patients might be surprised by name on the sign—Whole Health Management—and the copay: free.

Two years ago, Freddie Mac, a shareholder-owned mortgage investor that spends about $30 million a year on health care, turned to an outside provider to operate an onsite clinic for its McLean, Va. headquarter's 4,300 employees. "Starting a clinic piqued our interest since we could use it as a tool to attract and retain top talent, keep employees healthier and more productive and save money at the same time," said Shawn Flaherty, a Freddie Mac spokesperson.

About 17 to 20 patients with and without appointments visit the clinic between 8:30 a.m. and 5 p.m. Most see the full-time nurse practitioner who performs exams, takes care of minor illness and writes prescriptions. The medical director, Columbus J. Giles, Jr., MD, who had his own family medicine private practice before joining Cleveland-based Whole Health Management, Inc., comes in two or three days a week and on other days is accessible by phone and backed up by the regional medical director. A dietician is in one day a week.

Freddie Mac is even happier with the bottom line: While it costs $586,000 to run the clinic each year, the return on investment—direct costs plus added productivity (an estimated 12,318 hours saved in time away from work annually)—is $900,000 per year.

"This is a cutting-edge trend in health care," Dr. Giles said. "Because of the overall effectiveness of the system, people will be seeing much more of this in the future."

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Not your father's company clinic

While the specifics of company clinics vary in order to meet the needs of individual employers, today's players may include the following range of options, according to the sources interviewed for ACP Observer:

  • Services provided: Acute care, occupational health, sometimes chronic care management, prevention, physicals including lab work, wellness programs.
  • May provide: EKGs, X-rays.
  • Staffing: Mid-level practitioners, part-time or full-time physician (could be internist but may be family practitioner, occupational medicine physician and/or emergency physician).
  • Hours: Work hours; some available 24/7 to meet needs of shift schedules.
  • After hours: Usually referred to community physician; sometimes nurse hotline available.
  • Location: Inside a company building, frequently on the main level.
  • Patient load: A one-physician clinic may see about 20 patients per day.
  • Confidentiality: The room with charts and files are locked and kept separate from company files.
  • Number of employees: At least 500—some say 1,000—employees to make this cost-effective. Some note that smaller companies are joining forces to have the minimum needed for a clinic that would work conveniently.
  • Co-pays: Frequently waived or "advantaged;" may be fee-for-service cash only.

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