Highmark Joins On-Site Clinic Movement

When health insurance companies adopt for their own employees the cost-effective healthcare delivery strategies of other large businesses, this is a good indication that the trend is more than a passing fad.

Highmark Inc., for example, is following the lead of companies like Toyota, Disney, and Harrah's and this month opened on-site healthcare clinics and pharmacies for its 10,000 or so employees at its two main operations centers in Pittsburgh and Camp Hill, PA.

Rich Little, vice president of compensation and benefits at Highmark, says opening the clinics is a logical progression along the wellness-at-work spectrum.

"We want to focus on the preventive healthcare because that is where we've been. If you go back five years in this story, our CEO (Kenneth Melani, MD) has really been pushing us in the direction of preventive care, consumerism, taking better care of your health, and being more engaged," Little says.

Take Care Health Systems, within Walgreens Health and Wellness Division, has been contracted to operate the on-site clinics, each of which will be staffed during the business day by a full-time physician and a nurse practitioner, as well as office managers and receptionists.

Highmark spent about $1.5 million to get the two clinics operational, but expects to recoup $200,000 in savings within the first year, and as much as $5 million over the next five years. Much of that savings will come through increased productivity and the reduced time away from work for employees trying to access a physician or seeking care away from the work site. Little says employees are excited about the easier access to care, at a reduced price.

"We did the return-on-investment study with Take Care and one of the things they cited was a Rand study in September that showed the costs of providing services at a facility like this are about 30% to 40% cheaper than a primary care office or an urgent care clinic, and 80% cheaper than the emergency room," Little says. "The other thing is the plain concept behind preventive care itself. If you can get your high blood pressure diagnosed or cholesterol under control, you are less likely to experience a catastrophic event in the future."

The clinic isn't available to family members, but the pharmacy is. The cost of the clinic depends upon the employee's insurance plan, with higher out-of-pocket expenses for high-deductable plans.

Little says the health insurance industry has an obligation to try out progressive and potentially cost-saving healthcare delivery strategies within the workplace. "This is a step in that process of going out and trying to get people engaged in taking care of themselves," he says. "The healthcare reform discussion also has quite a bit of discussion about preventive care and making sure people get to the physician and we feel that is our responsibility. We test a lot of these things internally at first. We want to make sure there is validity to it before we try to push it out into the market and to our customers."

Little says that other wellness and preventive programs at Highmark have shown to be very cost effective, resulting in $1.65 in savings for every $1 spent on things like the lifestyle rewards step program. "I expect we will be able to demonstrate a similar type of ROI here. That makes it very appealing to a customer," Little says.

The only negative that I can see in these on-site clinics is that they are limited only to very large companies that can absorb the up-front costs, and have the economies of scale to make them work. Little concedes that it would be difficult for a company with 50 or 100 employees to follow the model. "I'm not sure whether we are going to be able to do that in the short term," he says.

The answer for smaller companies might be to pitch in and split the cost of establishing a clinic, for example, centrally located in the industrial park where they're located.

I'm a big advocate of retail medicine and on-site clinics. The nation's healthcare delivery system has done a poor job making itself more accessible for our 24/7 culture. Not even banks have the same restrictive hours of operation as that of most physicians' offices. On-site health clinics represent a common sense and cost-efficient way to deliver medical care. This is not a passing fad.