Onsite clinics are growing at a rapid pace throughout the United States. An idea that was long thought to be for larger employers only, it is now being used for employers with as few as 300 employees.
The challenge for brokers and benefits consultants is how to analyze this market and recommend an onsite health care company for their clients. A common mistake for brokers is to compare onsite health care companies in the same manner that you would use for insurance companies. This would be a poor approach, seeing as how the due diligence process is much different. Brokers stumble when they try and compare clinic vendors on a spreadsheet.
Most brokers will focus on three things:
- Management fee
- Lab pricing
- Drug pricing
Because clinic vendors offer such a broad array of services, simply comparing management fees on a spreadsheet is not the best use of time. The lab pricing and drug pricing is usually only plus or minus 5 percent of an employer’s total health care spend. Although saving 5 percent in these two areas is OK, it is not where the real money is found; many brokers are too focused on the three areas above.
Onsite clinics have been around for long enough that the clinic’s impact on an employer has greatly evolved. You can no longer simply build a clinic, put a doctor in it, and save money. Today, clinics are going much further, approaching things from a total health management standpoint rather than the “doc-in-the-box” model.
The clinic should act as the hub of the employer’s health offerings – not as a standalone benefit. There has to be a laser focus on chronic condition management, referral management, online and in-person health coaching, and leveraging technology. For an employer, the onsite clinic becomes a wellness program on steroids. The company doctor becomes the quarterback of care and creates an environment of accountability for the employee or spouse.
There are several options regarding onsite health care vendors. The path of least resistance is to use a turnkey company that can provide all the services an employer requires. Other successful onsite models have partnered with local hospitals; this concept works most effectively in a smaller city or rural setting. However, this model requires that you have a significant amount of expertise to communicate to the hospital how to structure the clinic. Generally, most hospitals do not have the experience to implement these clinics on their own and require assistance from the broker on a number of issues. In order to learn as much as you can about this unique approach to managing health care costs, you can find many employer success stories online.
As a broker or benefits consultant, if you simply recommend putting a doctor onsite, you are missing the much bigger picture of the effect that an onsite health care clinic can have for your clients.
Joe Perkins is a broker with Indianapolis-based MJ Insurance.