It’s no secret that businesses are paying more for their employees’ health care.
Though growth during the previous period was greater, between Spring 2006 and Spring 2007, premiums for employer-sponsored health insurance rose by 6.1 percent, according to the 2007 annual survey of employee health benefits from the Henry J. Kaiser Family Foundation.
As premiums rise, businesses continue to lose productivity to acute and prolonged illness. According to an American Hospital Association report, an estimated 69 million workers took sick days in 2003 (the last year for which data is available), amounting to 407 million lost work days. That’s $48 billion in wages lost due to illness.
In recent years, Corporate America has begun to look to on-site clinics and wellness programs to help contain rising health care costs and motivate their employees to adopt better health habits.
The ROI on such programs is enough to sparkle the eye of any HR director. A review of 42 published studies of workplace health promotion and wellness programs found an average savings of $5.93 for every $1 spent, according to an AHA report.
The study also found workplace wellness programs yielded an average reduction in sick leave absenteeism of 28 percent; in health costs of 26 percent; and in workers’ compensation and disability management claims cost of 30 percent.
“I think a lot more employers are looking into implementing on-site clinics and wellness programs. The numbers have increased in the U.S. and even worldwide in the past couple of years,” said Sharolyn Whiting, employment law attorney at Doerner, Saunders, Daniel & Anderson LP, 320 S. Boston Ave., Ste. 500.
As of last year, more than 100 of the nation’s 1,000 largest employers offered on-site care, including clinics with occupational health care, primary care and pharmacy services, according to the AHA report. The number of providing companies was charted to top 250 by the end of 2007.
“There is no reason to think that trend wouldn’t continue to Tulsa,” Whiting said. “There have been several companies that have broached the issue, and a lot of them have already installed those programs.”
Within the past six months, the law around on-site clinics and wellness programs has taken about 10-20 percent of Whiting’s time at the office.
“That’s pretty significant, since I don’t do mostly health care law – that’s because it has come up for three or four fairly large clients. It’s a question that keeps coming up.”
Doerner, Saunders counts medium- to large-sized Oklahoma corporations as the core of its client base.
Implementing a wellness program or installing an on-site clinic may seem as easy as contracting with a physician or throwing some fitness equipment in an old conference room. But, because of new and changing laws and regulations, employers should proceed with caution to protect the start-up investment in and the cost savings yielded by on-site clinics and wellness programs.
“The legal issues are things that employers need to be aware of up front. They’re not necessarily, in my view, obstacles that should preclude these types of programs. Employers just need to do their research and define what they want before they get started,” Whiting said.
The first thing employers should know is that wellness programs and on-site clinics “are not one and the same. They can be created and run so that they are. They are two very different considerations, and they implicate some of the same laws, but also many different ones,” Whiting said.
“At the end of the day, you’re going to look at reduced insurance premiums, and hopefully your employees are going to be seeing the doctor regularly instead of not going and putting issues off until they get bad.”
Match the guidelines given by an alphabet soup of federal laws – the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Genetic Information Nondescrimination Act – and add them to rules in any applicable state laws, and employers suddenly have more to worry about than where to put the treadmills.
“There are a lot of federal laws. That’s one of the differences between an on-site clinic and a wellness program. On-site clinics have to worry a lot about state law, along with some federal law. Wellness programs are pretty much governed by federal law, because they fall under ERISA (Employee Retirement Income Security Act),” said Anita Chancy, employer benefits attorney at Doerner, Saunders.
“You have to be careful in the design of these programs. You should have a lawyer in the mix; we know these rules,” said Chancy.
Among Tulsa-area companies with on-site clinics, wellness programs or both are Dollar Thrifty Automotive Group, Williams Cos., The Nordam Group Inc., FW Murphy, American Waste Control, Melton Truck Lines and QuikTrip.
Features range from reduced health premiums in exchange for participation in a wellness program, cash rewards for smoking cessation and health education to free on-site clinic visits and prescriptions.
QuikTrip, which implemented an on-site clinic last year, has seen a 20 percent reduction in its claims.
“That’s actually too good, so we’re going to look at this year and see how things pan out, but that’s a pretty good trend for the first year,” said Walter Smith, benefits manager at QT.
QuikTrip boasts a combination of an on-site clinic and a wellness program, Smith said.
“The way I always pictured it was that it would be in conjunction with our regular health benefits plan, and that way it would be a benefit that we offer to our PPO members,” Smith said.
The clinic performs routine health checks and treats injuries or illnesses, excluding work-related problems. The wellness portion of the program is still in development, though the clinic and HR staff are working to educate the QT workforce on health issues and to follow up on any issues found during clinic visits.
“It takes less time for employees to go get their doctor’s visits, being that it’s right in our building. For the 350 employees here, it’s very simple to go downstairs, see the doctor and be back at your desk, and the trip takes a total of about 15 minutes. There is definitely a save in productivity,” Smith said.
When QuikTrip launched its on-site clinic, doctors were available on its campus three half-days per week. The clinic is now open five half-days, and this fall availability will increase to one full day and four half-days. About 600 QT employees are eligible to participate in the program, with a participation rate between 50-60 percent.
“One of the main concerns with these on-site clinics is historical,” Whiting said. “It has to do with corporate practice of medicine. The thought behind that is, the government and the people don’t want the company dictating what kind of care a patient is going to get.”
“There needs to be that doctor-patient relationship, and it needs to remain an independent decision-making process on the doctor’s part. That way, the company isn’t becoming the doctor. The doctor needs to do what the doctor does best.”
QT contracts with Care ATC, a Tulsa-based company at 9902-A E. 43rd St. that provides on-site physician’s clinics for medium to large-sized companies. The company promises progressive and preventative health care, yielding healthier employees, increased productivity, decreased absenteeism, boosted employee morale and significantly reduced health care costs.
“It would be my suggestion that the independent contractor route may be more careful,” Whiting said.
Another important safeguard for employers is to make sure employees’ medical information is kept private and secure.
“That’s always a difficult thing. You have a lot of people using this clinic, you have managers who want to go in and find out if someone was actually sick,” Whiting said. “That type of information certainly, definitely needs to be kept private.”
“The medical staff downstairs has to comply with all HIPAA regulations, just as they would if this was a clinic anywhere else,” Smith said. “They are responsible to keep locked and secured all medical records and documentation – just like a regular doctor’s office.”
“What we do on the flip side of that is that portion of the building is closed – it’s secured,” he said. “There is no one who has access to it except for, maybe, three people. Even those folks who have access don’t have keys to any of the files that contains patient information.”
“Most companies that install these on-site clinics are fairly large, since there is an up-front cost. If you’re going to contract with a physician, if you’re going to have equipment, all of these things, even if you’re going to contract that out, there is a start-up cost for all of that,” Whiting said. “It’s all about an employer going out and looking at that return on the investment.”
It’s no secret that businesses are paying more for their employees’ health care.