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The Logical Case For Worksite Clinics ~CareATC, Bill Bennett, VP

CareATC is a population health management company that empowers you to inspire healthier, happier employees and reduce your healthcare spend. We have the proven programs and technology to help you create an exciting wellness culture that works wonders for your workforce.

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CASE STUDY | Clinic achieves 88% engagement of high-risk population

By William “Bill” Bennett | VP Business Development | CareATC | DPC Journal Contributor

As everyone is painfully aware, rate increases for health coverage continue to abound regardless of the efforts of the industry to control them. It’s like a malignant cancer eating away at the budget. We do not see the actual healthcare dollars decreasing but are watching them simply change in terms of who is responsible to pay them.

Unless and until employers commit to pursuing a disruptive course that changes the way healthcare is delivered and financed, there is not much hope in the near future for relief.

Here are a couple of major culprits (not all by far) that are responsible for continued increases in costs:

  1. Fee-for-service is an old business platform used over the past 100 years. It says that every time a provider asks you to visit the office, he gets paid. There are no “result-based” requirements and if the provider owns part of another facility such as a radiology clinic or lab, they make money off those referrals as well. It places the doctor in a sales position where they make a “commission” on every sale. This is an antiquated approach that simply encourages “more and more”.
  2. PBMs are entities that make money in a number of ways but the most prevalent is that of developing point spreads between what the client pays and what pharmacies are reimbursed. There are additional issues such as rebates paid by manufacturers to make sure their drug is among the “preferred” ones on the formulary. Often they will indicate rebates are paid to the employer, but when asked what the total rebate is, the answer is cloudy at best because of the way they re-characterize the dollars. One look on the internet at the profits of particular PBMs as well as the salaries of the executives will give a hint of the enormous dollars in play. PBMs are not regulated by any state or federal department leaving them to determine their own rules by which to play. Obviously they are driven to focus on profits for executives and shareholders rather than the most cost effective ways to service employer plans. In just the last few years, the major PBMs (CVS Caremark, Express Scripts, Optum Rx, Prime Therapeutics ) have faced numerous federal or multidistrict cases over allegations of various misconduct — stemming from clawbacks of consumer copays; fraud; misrepresentation to plans, patients, and providers; unjust enrichment through secret kickback schemes; and failure to meet ethical and safety standards. While some of these cases are ongoing many have resulted in hundreds of millions of dollars in damages to states, plans, providers and patients so far[1]. Continued mergers and acquisitions in the industry with carriers and PBMs will only complicate the issue further.

CMT Graphic Ad (3) myconciergefitnessIn addition to these two issues are a couple of other dilemmas that further confound the issue:

  1. Accessibility has gotten to be a big issue for many. At this point, a “new” primary care patient looking for an appointment averages 59 days wait for availability. Impossible for someone with an acute issue so the solution is to go to the emergency room or an urgent care center. Both much more expensive than a primary care visit. The American Association of Medical Colleges estimates there is a shortage of 31,100 primary care physicians at this point.
  2. Affordability is a severe issue as well since many have to make a decision to buy groceries or pay utility bills or pay a large deductible to get treatment. Industry trend is toward large deductibles and higher copays. Both this issue and the one before can cause serious health issues long term and expose the health plan to large claims. The lack of either of these two are tantamount to rationing.

when good doctors lean in bookSo is there at least a partial solution to this persistent problem that most employers are able to take advantage of? A couple of things come to mind that have been proven many times over but have not been considered by many. In the 40s and 50s and even till today, many mines and steel mills, in addition to other large employers have employed a “company physician” for employees and families. While that trend waned for a while, it has experienced a renewal over the past couple of decades.

What is the advantage of this initiative?

  1. Having a fixed cost primary care clinic reduces the fee-for-service exposure, reduces the core plan claims and addresses the “availability” issue. In fact, with increased engagement of employees and dependents, the ROI for the clinic improves.
  2. Having the clinic dispense maintenance drugs for diabetes, hypertensive, high cholesterol and other chronic issues, as well as many acute issues, at a wholesale price without middle men is significant. At this point, pharmacy (exclusive of specialty drugs) represents an average of .22 of every dollar spent on healthcare and is increasing.
  3. Labs are also performed in the clinic at wholesale prices.

The end results of both of these is being able to stabilize, if not reduce, the trend.

In addition to all of this, a good clinic manager has protocols in place to manage chronic diseases such as diabetes, hypertension, high cholesterol, COPD, weight loss, smoking cessation and others. A healthier workforce is not only more productive but more satisfied and less costly.

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The clinic also can perform other functions the employer pays for outside the healthcare budget such as pre-employment physicals, flu shots, school, camp and sports physicals and DOT exams. For cities and counties it can provide most first responder exams.

In a day when recruiting and retention is more critical than ever, the clinic offers a great value in addition to the salary since there is generally no deductible or copay for the physician, drugs or labs

There is now a “shared clinic” platform that will allow smaller employers (down to 25 employees) to share a clinic who would otherwise not find it financially feasible. With the advent of self-funding for smaller employers, this is a great adjunct to their healthcare program.

Reviewing such an arrangement is clearly an action employers should take with the idea that something has to be done to prevent long term disaster.

William “Bill” Bennett

VP Business Development

Cell – 678-524-5572

bilbennett@careatc.com
www.CareATC.com

[1] PBM Watch – http://www.dcantitrustlaw.com

 

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