Prudent Management Requires Consideration of Unique Alternatives

Most organizations that provide health care coverage for employees and dependents are in some business other than health care. The primary interest of the organization is somewhere other than on managing health care plans and the attendant cost. Therefore, health care planning is often relegated to a second tier position and delegated to be managed in the HR department.

However, with health care costs continuing to rise at rates above inflation and revenue growth at most organizations, the pain of continuing to provide quality health care plans is drawing the attention of the executive suite. More and more, line executives are getting involved in health care planning - if for no other reason, out of survival instinct.

One solution that is gaining visibility across the US is for employers to host third party onsite primary care clinics at the workplace. These clinics help hold down future health care costs by identifying and effectively managing chronic illnesses such as high blood pressure, high cholesterol and diabetes. By managing these chronic conditions, the risk of future catastrophic claims, which are the number one driver of total health care cost, is significantly reduced.

The most progressive of onsite clinic providers, recognizing that avoided costs are difficult to measure, have also developed other more near term cost saving strategies to help justify the cost of hosting an onsite clinic. The best providers can produce savings on lab testing and prescription medications in the range of 50-80% by shortening the distribution chain to the consumer. Some of the most sophisticated providers can also go beyond primary care and offer significant savings on specialty care, testing and imaging by providing the employer's plan members with panel access to the highest quality but cost effective specialists in a number of areas such as cardiology, orthopedics and oncology.

Thinking about onsite clinics in terms of product life cycle, the industry is still clearly in the innovator phase, with coverage being provided to less than 1% of the US population. However, growing cost pressure and the passing of time are pushing this concept forward to the early adopters. It will not be at all surprising, as employers awaken to the need to take control of health care costs, to see a significant number of these onsite clinics pop up in the US. Implementation of the Affordable Care Act is actually pushing such initiatives, as onsite primary care clinics are a perfect example of Affordable Care Organizations (ACOs).

Einstein pointed out that doing the same thing repeatedly and expecting outcomes to change was the definition of insanity. Well managed organizations have no choice but to evaluate this option as part of future of employer provided health care plans.

Kelsey Knutty