Company clinics cut health costs

Updated: Jan 20 2007, 05:30am hrs
Frustrated by runaway health costs, Americas largest employers are moving rapidly to open more primary-care medical centers in their offices and factories as a way to offer convenient service and free or low-cost health care.

Within the last two years, companies including Toyota, Sprint Nextel, Florida Power & Light, Credit Suisse and Pepsi Bottling Group have opened or expanded on-site clinics. And many employers are adding or planning to add even more clinics, which were experimented with about 30 years ago but fell out of favor amid questions about their cost-effectiveness.

Today a new wave of clinics is opening, driven largely by a motive that was less of a factor in the past: employers desires to reduce their health insurance premiums by taking care of workers before they need to see outside doctors. Corporate Americas new in-house medical offices go well beyond traditional occupational health clinics that hundreds of factories have long maintained for job-related injuries and workers compensation cases. Employees can now stop by for check-ups, allergy and flu shots, pregnancy tests or routine monitoring for chronic diseases like diabetes and asthma. When prescription drugs are required, some employers arrange for the pills to be delivered the next day at the office or plant, while others even maintain fully stocked pharmacies.

Even at the older-style clinics run by companies like General Motors, about 40% of the services now rendered could be characterized as primary care or urgent care, said Dr Joel Bender, corporate medical director of GM Health Services. But at these more traditional clinics, employees are typically sent on to their family physician or an outside specialist. At the newer corporate health centres, by contrast, the goal whenever possible is to help solve the employees health problems without the need for additional outside care.

For employees, on-site clinics can mean faster medical attention and lower out-of-pocket costs, since visits are usually free or carry only a small co-payment. Some workers may fret about the privacy of their medical records, but employers say they treat the information carefully and responsibly. Some companies hire outside providers to run the clinics, thus offering an additional privacy firewall. For employers, on-site clinics can mean gains in worker productivity and lower health-insurance outlays. A clinic serving a couple thousand employees can probably save $1.5 million to $2 million a year, said Beech, a health care specialist at the Watson Wyatt benefits consulting firm. Right away, its easy to see reduced referrals to hospital emergency rooms and specialist physicians, and a shift away from hospital outpatient doctors to the clinic.

The biggest primary care clinic so far opened in Texas, when Toyota workers and their families started using a $9 million, 20,000-square-foot medical centre alongside a new truck assembly plant in San Antonio. Unlike most of the new medical offices which are staffed by nurse practitioners and in some cases a part-time doctor Toyota's San Antonio health centre has two-full time doctors, a part-time physician, a blood-test lab and an X-ray centre.

It is a clinic on steroids, Beech said.

And yet, even smaller operations, like the one with nurses, a physicians assistant and a part-time doctor at the midtown Manhattan offices of the investment firm Credit Suisse are drawing praise from many employees.

John Probert, a 42-year-old Credit Suisse foreign-exchange trader, recently took a few minutes from his 10-1/2-hour work day to pick up a prescription for a throat remedy at the firms clinic. He had it filled at a nearby pharmacy.

General Motors, despite continuing its traditional clinics, has put its emphasis on working with local doctors and hospitals to improve the quality of health care in communities like Flint, Mich., where GM retirees and their families vastly outnumber the companys active work force.

Other companies have eliminated primary-care clinics, either because they did not consider them cost-effective or for other reasons. Ford Motor, which used to offer basic health care in the 1950s at its big Rouge plant in Dearborn, Mich., now says it believes that most employees prefer to go to their own doctor for primary care.

But the foreign-based automakers in the United States, including Nissan and BMW, which do not have union-negotiated benefits or large numbers of retirees, are embracing the on-site health trend for their work forces.

NY Times / Milt Freudenheim