3 considerations for maximizing the value of on-site and near-site health centers

There are critical elements that can help maximize a center’s effectiveness in fostering a healthier workforce.

Many employers are turning to on-site and near-site health centers to streamline access to medical care and treatment.

Think about your last doctor’s appointment.

Maybe you were able to get an appointment right away, but chances are you had to wait until the office had an opening. On the day of the appointment, you probably had to leave work and spend time traveling to the appointment. When you arrived, you spent more time in the waiting room. Finally, you got to see the doctor for a visit that likely felt a little rushed and impersonal.

Harvard Medical School researchers found that the average doctor visit lasts 121 minutes, but only 20 minutes of that time is spent with the actual physician. Many employees and patients can confirm that research from personal experience–and it is only getting worse.

Related: To cut health care costs, focus on the doctor

These time-consuming health care interactions are a challenge for employees and their employers. A busy employee may be reluctant to take time away from work for any medical concerns, particularly preventive care. Organizations eager to support wellness and employee health are forced to balance that commitment with significant losses in productivity and rising absenteeism.

Given this reality, many employers are turning to on-site and near-site health centers to streamline access to medical care and treatment. These centers are essentially physician’s offices for patient-centered care located on or near an organization’s property. They’re designed to deliver quality medical care without the cost and time commitment that comes from visiting other locations.

But not all on- and near-site centers are created equal. There are critical elements that can help maximize a center’s effectiveness in fostering a healthier workforce and delivering a healthy return on investment. This report outlines three key considerations employers and benefits administrators should consider when exploring the possibilities of on-site or near-site health centers.

1. What services will be provided?

The first step in establishing an effective center is prioritizing which services will have the greatest impact. Centers typically focus on providing primary care, wellness and occupational health services. Ideal centers manage to successfully manage population health and wellness issues as well as workplace safety and health issues under one roof. Employers should work with partners and benefits providers to analyze existing member health and workplace injury and illness data to identify services that will provide the most value.

Start by looking at how members interact with the health care system now, including:

If, for example, employees are exposed to fire and burn hazards in a kitchen or manufacturing facility, more robust first-aid services that can treat on-the-job injuries and triage injuries. If a significant portion of the member population suffers from diabetes, for example, staffing an endocrinologist or dietician may be advantageous.

Expanding services and the dependent decision

The services provided at on-site and near-site centers can expand beyond doctor visits. Other occupational health and wellness tests, inspections, trainings and learning sessions could be beneficial. Consider ancillary services such as:

One other important decision to make early in the development of these health centers is whether or not the site will serve dependents. In many cases, this decision largely based on logistics and geography. For centers serving members who often commute greater distances to work, offering services to spouses and children may not offer many benefits over existing health care options. But for locations embedded in the communities where employees work and live, offering services to dependents may increase member utilization and buy-in.

Fostering a better health care experience

Ultimately, the services an on-site or near-site facility provides should be centered on creating a better experience for employees. A well-run site replaces long wait times and impersonal consultations with efficient visits and deeper conversations. It’s an opportunity for patients to receive more holistic care, where physicians have time to talk through test results more thoroughly and create a personalized plans for chronic conditions or specific health issues.

2. Who will run it?

These centers are only beneficial if they’re positioned to serve a large enough pool of patients. Large employers may be in a position to establish an on-site location just for their workers – and more and more are choosing to do so. According to National Association of Worksite Health Centers, 33 percent of US employers with 5,000 or more employees offer general medical worksite clinics in 2017, up from 24 percent in 2012. There’s an opportunity for organizations with fewer workers to combine forces to realize the benefits of these centers. Smaller employers in the same office park or geographic area may opt for a shared-service model in creating a near-site health center.

Typically, both on-site and near-site centers are operated by a third party business. There are several primary health care operators that specialize in running these locations. In other cases, a hospital or health care system may run a center to expand its network and create a referral pool among members for specialty care.

Factors to consider with third-party operators

As employers work with a third party to establish and run the center, there are a few key details of the partnership that should be addressed at the outset.

Data and privacy – privacy and confidentiality are essential for employee buy-in and compliance. Employers should only ever have access to aggregate member health data, and every effort should be made to make site visits private for employees.

Insurance coverage – one of the main perks of these health centers is no-cost visits for members. In some cases, however, insurance companies request notice of $0 claims to track data. In other instances, centers are required to charge “fair market value” for services to meet the requirements of high-deductible plans.

Access for terminated employees – there are some cases in which employers have been required to provide care at on-site health centers to employees who have been terminated. Organizations should consult with their legal teams to navigate the specifics of COBRA benefits and terminated employees.

3. How will you measure success?

The overall return on investment for on-site and near-site health centers is typically measured in benefits plan savings and fostering better health outcomes for employees. Those metrics aren’t mutually exclusive – healthier employees are good for an organization’s bottom line. The best way to measure the impact of the centers is to use historical data to establish a baseline of per-employee health care costs.

Research shows that just 10 modifiable health factors are responsible for more than 20 percent of all employer-employee health care spending: Depression, blood glucose, blood pressure, body weight, tobacco use, physical inactivity, stress, cholesterol, nutrition and eating habits and alcohol consumption.

Centers that focus services on these issues will be more likely to see a healthy return on investment, and integrating population health data into planning and operating a center can further streamline savings.

The costs of opening and running a center are well-established and fall into four categories:

  1. Startup costs for construction, equipment, etc.
  2. Monthly management fee
  3. Fixed costs for staff and services
  4. Pass-through costs for the lab and pharmacy

A comprehensive look at return

With the baseline per-employee health care metrics and costs for running the center in place, benefits teams should take a broad look at where the center has the potential to deliver returns. Healthier employees have been shown to increase productivity and job satisfaction while driving down absenteeism and occupational health hazards. They also drive down health care costs through reduction of unwarranted emergency room, urgent care and specialty services.

They can improve ongoing management for chronic care patients and reduce the chances of more serious and expensive health risks down the road. Replacing this “bad spend” with preventive “good spend” can lead to significant long-term savings that are often difficult to quantity in the near-term.

It’s also important to factor in existing costs in conducting this ROI analysis. Flu shots, emergency room visits, annual physicals and many other health care services that are brought under the on-site center umbrella are costs that exist today. Adding them into on-site services isn’t creating new expenses, it is in fact offsetting existing costs.

ROI depends on utilization

Achieving an effective return on any on-site or near-site center is dependent on getting employees to use the center. Employers should make members aware of benefits including:

Making employees aware of these benefits comes down to effective communication just like any other employee engagement initiative. As employees understand the value that on-site and near-site health centers provide, they’ll be more likely to utilize the center for greater portions of their care. Communication should be ongoing and include accomplishments and data points supporting the benefits of the center.

Measurable ROI depends heavily on the effectiveness of that communication and overall utilization. Most health centers achieve ROI within one to three years.

The right partner can support healthier members and returns

These are just three of the many considerations that go into building an effective on-site or near-site health center that supports healthier employees and reduces health care costs. Getting these details on other specifics right up front is a significant factor in ensuring members utilize the center’s services and it delivers a healthy return.

Finding a broker or other external partner to help guide the establishment of the center as well as ongoing operations and metrics is critical. The right partner will have the experience and access to recommend best practices around where to focus service efforts, how to measure success and how to navigate issues around patient privacy and insurance coverage. With the right approach and the right partnerships, on-site and near-site health centers can help employers of any size can achieve a healthy return for members and the company bottom line.

Matthew Tiagwad is a business development executive with Conner Strong & Buckelew and is responsible for new business development and relationship management. Kristine Klepper is a managing director, senior vice president, and practice leader in Conner Strong & Buckelew’s Employee Benefits Division. 

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