Raphael "Randy" Albert, M.D., says he's got it made.
Albert is the medical director for a bustling, five-physician primary care clinic serving more than 15,000 patients. Albert says he never wants to go back to an HMO, where he had worked for several years, or even back to working under his own shingle, where he had practiced for a decade.
"I've found my niche," Albert says. "I have the freedom that I need now to practice good medicine. I can use the principles I've learned in an HMO, but with the insurance behind it, like Blue Cross. I have the best of both worlds."
No, a company-owned clinic in Merrillville, Ind. The clinic is managed by a private company that oversees 150 "company store" family healthcare centers and expects to open 20 to 30 more in the coming year. It is an old approach that could receive a lot more corporate attention as existing delivery systems fade and healthcare premiums surge, experts say.
Albert's clinic is in a suburb of Gary, home of Gary Works, the flagship mill of U.S. Steel Group, whose parent company is USX Corp.
The giant steel maker owns the Merrillville clinic where Albert has worked for five years. All his patients come to the clinic from a pool of 40,000 U.S. Steel employees, retirees or their dependents.
Latham, N.Y.-based CHD Meridian Healthcare manages the clinic under a contract with U.S. Steel. CHD Meridian specializes in running what it calls "employer-sponsored healthcare" clinics in 30 states, offering healthcare to 750,000 people, says Chairman Michael Hardies, M.D. Clients include Fortune 1000 companies such as General Electric, International Paper Co., Goodyear Tire & Rubber Co. and Bridgestone/ Firestone.
On Aug. 2, U.S. Steel joined Bethlehem Steel Corp. and National Steel Corp., which also have steel plants on the southern shore of Lake Michigan, in breaking ground on a 15,000-square-foot family clinic in Chesterton, Ind., about 25 miles from Merrillville.
The clinic will cost $4.7 million to build and equip and will draw patients from all three steel makers. It will serve 61,000 workers and their families, offer primary and pediatric care and have on site a pharmacy, lab, X-ray and mammography equipment as well as a patient education area. It will be managed by CHD Meridian.
Combined, the three steel companies report their healthcare costs in the region are $122 million a year. Company officials say the new clinic will trim those costs 10% to 20%. Bethlehem should recoup its 49% stake in the venture in two years, says Jack Romeo, director of healthcare systems.
The notion of a company-sponsored clinic is as old as the "company store," though Hardies bristles at that reference. ("These are not company stores," he says. "They're independent medical centers even though they're company sponsored.") And while many company clinics vanished after World War II, analysts say the turmoil in today's healthcare environment could foster a comeback.
The concept poses little threat to hospitals or family practitioners, according to spokespeople for associations representing both. Patients say they like the convenience and quality of care the clinics afford, while companies praise how well they control costs.
Finally, Albert and Hardies say, by removing the administrative burdens for doctors, the clinics allow them to focus on practicing medicine.
For all the positives, company clinics may be no different than managed care plans when they face sustained pressure on their bottom line, one consultant says. How they will respond long term remains to be seen, he says.
"This goes back to the 1800s, when coal mine operators would hire doctors to take care of the men," says Richard Roberts, M.D., a family practitioner in Belleville, Wis., and president-elect of the 80,000-member American Academy of Family Physicians.
One Roberts caveat is there must be a fire wall between the clinic and the company when it comes to patient records and confidentiality. "I think companies will be in for a rude awakening if they ever attempt to insert themselves between the doctor and the employee," he says.
American Hospital Association spokesperson Rick Wade says some clinic models point to the days of industrialist Henry Kaiser. In 1938, Kaiser hired Sidney Garfield, M.D., to run a hospital serving Kaiser's workers building the Grand Coolie Dam. Giant HMO Kaiser Permanente grew from that start.
Since then, company clinics have been "springing up across the country from time to time," Wade says. No trade groups exist for company clinics, Hardies says, but he estimates there are 300 to 400 of them operating in the country.
Coors Brewing Co. in Golden, Colo., sponsors two onsite clinics, one for employees who are sick, managed by Liberty Healthcare of Bala Cynwyd, Pa., and a separate, employee-managed Wellness Center to buoy the physical and mental well being of workers who are not.
Faucet maker Kohler Co. has a pharmacy at its Kohler, Wis., plant and a wellness and recreation center about a block away. Its in-plant clinic is mainly for occupational health, not primary care, but staff there will treat the occasional worker who stops in with aches and pains, says Terri Podruch, director of employee benefits.
"I think you'll see more of these things," Wade says. With their close links to the workplace, "you're going to try to get more people involved in preventive care," something Wade says the HMOs have generally failed to do.
Consultant Bruce Johnson with the Medical Group Management Association in Englewood, Colo., says the market seems ripe for the expansion of company clinics, but there are potential pitfalls.
With managed care, all of the easy savings have been wrung out and companies are becoming disillusioned as their costs are rising again, Johnson says. Still, with company clinics, "I think they will be hard pressed to do it any cheaper or do it with any fewer headaches." Also, many major employers are trying to find a way out of providing healthcare as an employee benefit, Johnson says.
From the workers' perspective, the clinic approach is working, says Tom Jones, former president of Steelworkers Local 2599 in Bethlehem, Pa. Bethlehem Steel shuttered its last steel making unit there two years ago, but after more than a century of producing steel in Bethlehem, the company retains healthcare obligations for 10,000 former employees. Since 1993, it has helped meet those obligations with a family clinic.
"I use it all the time," Jones says. "It's more convenient for us. It's the largest pharmacy in the valley here, so it gets heavy use." Workers have no qualms about using the clinic because it was created in partnership with the union, Jones says. "We had input right from the beginning, selecting the site and even the doctors, initially."
Rick Folsom, human resources manager for the Mead Paper Co. plant in Chillicothe, Ohio, says the company's 9,000-patient clinic has been "a huge employee relations hit" due to a prior shortage of primary care physicians in the community. As a result, employee utilization spiked at first, but long term the company expects savings to be significant, he says.
Hardies says the roots of CHD Meridian go back to 1978 in Troy, N.Y., when as a young internist wanting to keep his fledgling practice afloat he started working in occupational and family health with a local General Electric plant.
"It became apparent to me early on large businesses are very sharp at business, but from a healthcare standpoint, they needed advice and counsel," Hardies says.
He says he used the ideas developed at GE to found Corporate Health Dimensions in 1982. In January, Hardies' company merged with its chief competitor, Nashville, Tenn.-based Meridian Corporate Health Care.
The separate companies reported $145 million in revenue last year. Combined, they should do $200 million this year, he says. Margins have run from 3% to 7%, Hardies says. The company has no plans to go public.
There are about 2,700 U.S. companies with the minimum 5,000 patients needed to make a Chesterton-sized clinic feasible, Hardies says. But with combinations of smaller employers, he sees unlimited market potential.
Under the CHD Meridian model, primary care doctors typically are full-time employees, Hardies says. Ninety percent of their pay is in base salary, with 10% in incentives. They include bonuses for hitting patients-per-hour targets (just over three) and for scoring well on semiannual patient satisfaction surveys.
Physicians also are offered stock. Specialists are under contract and paid by the hour.
CHD Meridian has written a number of its own clinical pathways--the company calls them protocols--to improve patient care and control costs. Client savings also come from using generic drugs, in-house X-ray and lab sampling with outsourced lab testing, reduced referrals to outside specialists, expanded in-house disease management and earlier treatment of illness due to prompt access to physicians, Albert and Hardies say.
Very few of its occupational health contracts are capitated, Hardies says. Most are based on a budget prepared by CHD Meridian after a study of the employers' costs and an estimate made of healthcare services that could be handled by the clinic, plus a management fee. If costs run outside a 10% window, contracts contain adjustments, limiting CHD Meridian's risk.
Referrals outside the clinic are covered by the company either through self-insurance or its insurance carrier. In most CHD Meridian contracts, covered employees are not obligated to use the company-sponsored clinic, but often they are induced to use it by lower office visit costs than the company plan allows if employees go to their own primary care doctors, Hardies says.
One of the most challenging and time-consuming duties is physician and nurse recruiting, Hardies says. Finding doctors that fit the clinic is key.
As a clinic leader evaluating a prospective physician, Albert says he looks for the doctor's buy-in to the clinic concept as well as his or her compatibility with other clinic physicians. Albert says he tells recruits to consider this their practice. After five years at the Merrillville clinic, he does.
"Private practice was a lot of headaches," he says. "I can practice medicine here."