More employers may be looking at workplace health and wellness programs as a way to tackle projected premium increases.
Particularly popular are on-site primary-care centers. For example, Corporate Health Dimensions, a Troy, N.Y.-based firm specializing in workplace health and wellness, consulted with nine companies in 1997 about setting up on-site primary-care centers. That was about double the number in previous years.
CHD prospered from the apparent difficulties of managed-care plans. With profits in that sector flat and stock prices sagging, there appears to be almost universal consensus that premiums for employers will rise. A recent survey by benefits consulting firms William M. Mercer and Foster Higgins found employers expect a 7% average premium increase this year.
Some firms contract with companies like CHD to contain the damage. The company claims it can cut employer costs by as much as a quarter by hiring its own doctors and bargaining for pharmaceuticals. Most on-site clinics perform screenings, vaccinations and other minor procedures.
"The referral management issue is cut out; so is lost employee time, because they're on-site," said Susan Mathews, CHD's president and chief operating officer. Mathews said CHD is negotiating with more than a dozen other firms regarding primary-care sites.
"There is access and convenience (in on-site healthcare) as well as cost savings. And, for what it's worth, the quality of the medicine practiced is as good as can be found elsewhere," said Donald Sherman, M.D., corporate medical director for Akron, Ohio-based Goodyear Tires and a CHD client. Sherman noted that patient volume at the four sites Goodyear operates on-site and off-site has increased greatly since they opened in 1989, although he refused to release exact figures.
Carpenter Technology Corp., a Reading, Pa.-based manufacturer of metal components, has used on-site clinics for nearly five years, serving about 2,200 of the company's 5,500 employees and their dependents at a couple of sites. The clinics mostly provide screenings for diabetes, heart disease, cholesterol and forms of cancer.
The company estimated it saved more than $108,000 during 1997 just on those employees who received flu shots on-site. Inoculated employees worked an average of 5.5 hours longer than those who didn't receive flu shots.
"If you extrapolate, there would be an additional cost savings of about $250,000 for the entire employee population," said Sue Stahl, Carpenter's manager of health services. "Those are the type of numbers that make us pay attention very closely."
Yet despite the praise such centers have received, there is little hard evidence that on-site healthcare is capturing corporate America with the same brio as casual Fridays. While the Washington-based Society for Human Resource Management noted in a recent survey that 43% of employers now offer some sort of wellness programs, there was no breakout for primary-care centers. Indeed, scant information about such trends is available.
The on-site primary-care center is an enigma to companies because there is little actuarial data on which to gauge the level of service needed for a given employee population, said Jonathon Fielding, professor of health services and pediatrics at the University of California at Los Angeles and a longtime researcher on work site wellness.
"If you start delivering services yourself and do it on-site, how would a managed-care company that is going to give you a bid for business know how to (price) that bid?" he asked.
There are also natural price and market constraints. Setting up a center is a capital-intensive undertaking. According to CHD's Mathews, setting up an on-site center costs upward of $1.5 million-a sum that could pay for a year's worth of premiums for 500 employees or more. Typically, a firm has to have at least 1,000 employees to enjoy the cost savings of opening an on-site facility, Mathews said. It takes about five years to generate a positive return.
Some firms have yanked their on-site centers after being underwhelmed by the results. Such was the case with San Francisco-based petroleum giant Chevron Corp., which closed its facilities in 1992.
"We felt like we were really duplicating the care employees could get outside," said D'Ann Whitehead, Chevron's manager of preventive health services.