Recently, my local paper published an article describing strategies employers are trying to improve the health of their workers. Keeping workers healthy makes good business sense. Ten modifiable health risk factors are linked to more than one-fifth of workers’ healthcare spending, which drives up the cost of providing health insurance to workers. These risk factors include high blood glucose, high blood pressure, obesity and depression.
{mosads}One approach involves the provision of on-site or near-site medical clinics, or on-site paramedics with a physician network for serious medical issues. The companies offering these services claim that they save employers money in the long run. The cost savings come from catching chronic illnesses early; for example, treating high blood pressure to lower the risk of a stroke or heart attack. By receiving quick treatment, workers don’t lose a half day visiting the doctor, and those who may be averse to visiting the doctor can get their medical problems addressed.
At first, the potential cost savings of worksite clinics made sense to me. But as I read further, I was jolted by the cost of these services. CareATC operates on-site and near-site medical clinics for a cost of $50 to $75 per employee per month. At $50, that’s $10,000 a month for a company with 200 employees. And this service is a supplement for firms that already provide their workers with health insurance. A CareATC executive claims that they saved 13 employers with 7,000 employees an average of $1,300 per worker compared to the previous year.
A clinic that charges $600 to $900 per year for services but saves $1,300 in healthcare costs is certainly worth it. But how exactly were those cost savings calculated? Employers facing extraordinary increases in healthcare costs in the past few years have been shifting those costs to workers using higher copays and deductibles, as well as high-deductible health plans. Most employers have implemented multiple strategies to control costs simultaneously, so it would be difficult to attribute those cost savings to a worksite clinic versus other cost-saving measures. Moreover, CareATC’s claimed cost savings appear to be based on an internal analysis. I would prefer estimates calculated by an external, objective source.
Whether any firm could hope to achieve these claimed cost savings depends also on the composition of the company’s workforce. A tech start-up company usually has a high proportion of young, well-educated workers. Both of these characteristics are associated with better health status, which translates into lower healthcare needs. Even if one were to catch high cholesterol or high blood pressure among young workers, the benefits of avoiding future strokes and heart attacks won’t occur until at least 20 or 30 years down the road, and most workers will have moved on to another company by then. A company that has a higher majority of older blue-collar workers is more likely to benefit from preventive healthcare services offered by worksite clinics.
Is early detection of chronic illnesses definitely a money saver for employers? While healthcare prevention can save lives and improve quality of life, it doesn’t always save money. Researchers have found that some preventive measures save money, while others do not. And some preventive measures are expensive given the health benefits they confer. Think of a worker in his 40s with high cholesterol. Lowering the risk of heart disease requires daily dosing with cholesterol medications for the rest of that worker’s life. Those costs certainly add up over time.
What about the notion that some workers don’t want to see medical providers? Studies show that men are less likely to have a regular source of medical care than women, and many men avoid the doctor unless they are extremely sick. But the reasons that men avoid medical providers include less value placed on preventive care, and perhaps a fear of what might happen if the doctor does find something wrong. Patients who don’t visit the doctor for these reasons don’t seem more likely to visit a worksite clinic. Moreover, many workers may be reluctant to visit a clinic paid for by their employer because they are concerned about privacy regarding their health information.
Employers should carefully weigh the costs and benefits of worksite healthcare before investing in this benefit for their employees. Many workers will find the convenience and free service appealing, which contributes to employee satisfaction. However, benefits like this may not be worth the additional cost. If employer healthcare costs continue to rise as rapidly as they have over the past two decades, then on the margin more firms will choose to drop the provision of health insurance as a benefit. Maintaining affordable private-sector healthcare coverage is essential for reducing the number of uninsured persons in this country.
Ho holds the Baker Institute Chair in Health Economics at Rice University’s Baker Institute for Public Policy. She is also a professor of medicine at Baylor College of Medicine.