Company Clinics: Cutting Healthcare Costs January 14, 2007
Posted by Confused in Health.trackback
In recent years, American companies have been complaining of rising health care premiums. Some have argued that it is putting American companies at a disadvantage and have even advocated national health care. As the nation debates health care reforms, the companies are taking matters in their own hands.
Within the last two years, companies including Toyota, Spring Nextel, Florida Power and Light, Credit Suisee 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. More than 100 of the nation’s 1,000 largest employers now offer on-site primary care or preventive health services — a number forecast to exceed 250 by the end of the year, according to David Beech, a health benefits consultant.[Link]
While it does seem to a great idea, the problem is that running clinics is not their core competency.If health premiums were to go down tomorrow, the health clinics will disappear as fast as they have appeared. Also, it would be quote interesting to see how the big insurance companies react to this threat.
Confused: A few points. Firstly, these companies are not running the clinics by themselves – having some outside contractor running the clinics is not very difficult (it is similar to having a cafeteria). Secondly, on-site clinics for some companies is going to help them attract talent (case in point: Google) – so even if premiums go down, unless there is a major shift in the healthcare system, I believe the clinics will continue.
Finally, I would like to mention how some universities that have affiliated hospitals are moving away from the system of paying insurance premium for employees and instead moving their care in-house. In my graduate school, they started offering employees free (or some low deductible) in-house clinical services and specialist costs. They figured that only a subset of their employees actually needed regular healthcare, so why pay premium for everyone ?
Some companies located in the vicinity also bought into this service. Perhaps that will another model.
Bongo,
Not all of them have outsourced it yet, some are running them on their own.
Yes, I agree about universities but then their commitment to employees is much higher because of unionized labor and such like. Companies would like to cut and run if the costs were lower. Not that I see it happening anytime soon.