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HEALTH PLAN ANALYSIS Content from HealthLeaders-InterStudy's Ohio, Kentucky & Indiana Health Plan Analysis, Winter 2009, Vol. 10 No. 1:

January 7, 2009

Worksite Health Clinics Put New Focus On Employee Health

BY RICK BYRNE

During America's booming manufacturing era, the worksite health clinic was as common a sight on plant grounds as lunch buckets and hard hats. Now those on-site health clinics are returning to the workplace as employers, particularly those that selfinsure, begin to see them as a way to gain control, not only of healthcare costs, but employee health behaviors as well. It's a phenomenon made possible by the same people that brought retail clinics, or convenient care clinics as they like to call themselves, to pharmacies and grocery stores with great success. The Convenient Care Association, the Philadelphia-based industry group, estimates there were 1,060 CCCs at the end of 2008, a number that's gone up from 800 since the end of 2007. Take Care Health Systems is part of Walgreens Health and Wellness division, which includes Take Care Consumer Solutions, managers of convenient care clinics located at select Walgreens drugstores nationwide. But the worksite health division of the company is Take Care Employer Solutions which, as of October, operated 364 worksite clinics for 183 large (1,000-plus employees) companies, including Lowe's, Scotts Miracle-Gro, Goldman Sachs, Continental Airlines and Toyota. Combined, the Take Care retail clinics and worksite health-wellness centers total more than 600 locations. Unlike the CCCs, which are typically staffed by a single nurse practitioner, worksite clinics vary widely in size and scope, depending on the size of the employer and its needs. Clinics can have full primary-care responsibilities, and even be the primary care provider for a worker's dependents. "A health center can have a wide variety of staff, judging on the hours of operation," said Peter Hotz, president of Take Care's Employer Solutions division. "We have sites with a single nurse who is a health coach and does a lot of screening and outreach. But we also have sites that have 40 to 50 employees, and can perform full dental, vision, medical and X-ray services. Some are more fitness-oriented, and we can also offer full workplace pharmacies." New Client Base For Clinics The Employer Solutions division was created by Walgreens in May 2008 through acquisition of the former Whole Health Management, and I-trax, Inc., parent company of CHD Meridian Healthcare, two operators of

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OHIO, KENtuCKY & INdIANA ARtICLE PuLL-Out V worksite wellness programs. WHM, for example, opened seven clinics in 2006, a fitness center, and 13 wellness centers for clients like Qualcomm. It expanded the health and wellness sites at Harrah's Entertainment locations in Lake Tahoe, New Orleans, and Showboat Atlantic City. The company also expanded locations for Florida Power and Light, Ford Motor Company and Capital One. In 2007, WHM added new contracts with the Manatee County government in Southern Florida and the bookseller Scholastic Inc., among others. Take Care operates 11 sites in Indiana, including a health education center with Harrah's; five in Kentucky, including two with Toyota; and 23 in Ohio including Scotts, Continental Airlines and the Longaberger Co. "The health centers that big companies used to have on their worksites were very focused on worker health compliance, occupational health and workers' comp," Hotz said. "Now, they are more focused on population health management, wellness and disease management. And we are seeing them in all manner of industries." Novia CareClinics LLC, another worksite clinic operator, has won business from school districts, county governments and the more traditional industrial clients. In Indiana, it has 12 clinics operating with 11 employers and has contracts to open 11 more by April 2009.

table 10-1: Services Offered By On-Site Clinics

Immunizations Screenings urgent care Mental health/EAP counseling Pharmacy services

Source: Watson Wyatt Worldwide

81% of recent adopters 78% of recent adopters 63% of recent adopters 18% of recent adopters 44% of recent adopters

91 % of early adopters 88 % of early adopters 75% of early adopters 22% of early adopters 23% of early adopters

"Our model is focused on the health plan, not generally occupational health at all," said Bill Crimmins of Novia CareClinics. "We operate like a small family practice doctor's office. Our clinics are open to employees and their spouses and children on the health plan. We market to larger employers but also smaller employers with 100 or more employees on site." Lisa Gish, executive director of the Tristate Business Group on Health, an Indiana-based employers' healthcare purchasing coalition, thinks coalitions can benefit greatly from worksite clinics, and has seen a couple of new ones spring up in the Evansville area. The Toyota manufacturing plant in Evansville features a more traditional clinic, offering only occupational health services, while the company's San Antonio assembly plant has a $9 million clinic run by Take Care that offers primary and preventive care. Toyota, she said, is currently investigating how to retrofit the Evansville site to offer the wider service array that employees in San Antonio have. Purchasing coalitions of self-insuring employers can also pooled their resources where their close location allows them to set up one clinic to serve multiple companies. "Really, it's consumerism at its best," she said. "The emphasis is not just on cost but productivity. It reduces barriers to care from an access standpoint, and there are usually no out-of-pocket costs for the employee." Gish has only seen resistance to the worksite clinics from provider groups and hospital systems when seeking staffing for the clinics. Many worksite clinics must employ independent physicians rather than navigate accusations of scavenging business and conflict of interest. Industrial and manufacturing clients aren't the only ones interested in the worksite clinics. For example, Take Care operates 45 such sites in Manhattan alone, nearly all of them in office environments. In fact, Random House Publishing was WHM's first customer in 1964.

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OHIO, KENtuCKY & INdIANA ARtICLE PuLL-Out V Hewitt Associates recently surveyed 248 large and midsized companies and found that though on-site programs and services are not common, they provide the highest degree of satisfaction to employers that offer them. According to the survey, 19 percent of the surveyed employers offered worksite medical clinics, and 11 percent offered worksite pharmacy services. They reported that 25 percent of employees used the clinics when they were available, and half used the pharmacies. Of the employers sponsoring worksite health programs, 81 percent expressed satisfaction with worksite clinics' results and 95 percent were satisfied with the pharmacies. Clinics Practice A Different Business Model The diversity of new clients compared to the historical model of worksite health clinics reflects a change in thinking about health delivery, Hotz said. The former onsite clinics, he said, concerned themselves with returning a worker to productivity as soon as possible, so the clinics focused on treatment of acute injuries and other issues of occupational health and workers' compensation. These occupational-model clinics typically sent the patient on to their family physician or an outside specialist. More recently, employers have come to realize that the greatest amount of avoidable healthcare spending comes from employees with chronic conditions. If a self-insuring employer can proactively identify and manage health risks and chronic disease conditions in workers through a worksite clinic, the employer can directly capture any savings through the screening, management and treatment functions of the clinic. The greatest advantage, Hotz said, comes from having a captive group of providers who are familiar with and focused on the health needs that might be unique to a specific industry or worker population. Respiratory care might be a concern for mine workers, for instance, while a teacher group might have more need for stress management.

table 10-2: Vendors Of Worksite Health Clinics

atWORK Health Services Care AtC CareHere Comprehensive Health Services International Concentra HealthStAt IMC Healthcare

Source: YACA Group LLC, the doctor Comes to You

MediWell MinuteClinic Novia CareClinics OnSiteSolutions QuadMed take Care WeCare

"The new model, which we call the population health model, is more preventive in nature, oriented around chronic disease, wellness, fitness and lifestyle," Hotz said. "There's a pretty solid body of research to show that the most important money an employer can spend is keeping healthy people healthy. So the first bucket of issues we concern ourselves with are nutrition, obesity, weight management and exercise. The second bucket is helping those with chronic issues manage those issues." Novia draws from a formulary of 2,500-plus FDA approved generic medications, and distributes them for free­no copay. The formulary varies with what works for the employer and the employees. "We start with about 40 to 50 of the most common generic drugs, and grow that list with the needs of the population," said Novia's Crimmins. "There are no controlled substances on site, and we can add some brandname drugs if the employer chooses." With on-site blood draws and common specimens, there's a menu of about 800 lab tests that a clinic can initiate and have processed by LabCorp within 24 hours. Novia also uses an electronic medical record system and stores all data off-site at a Web-based server farm in Virginia.

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OHIO, KENtuCKY & INdIANA ARtICLE PuLL-Out V Finding Providers Not A Problem Finding a doctor to staff the clinic is typically an easy sell. Employer and employee preference plays a role in who gets recruited from the nearby community. With family practice doctors needing to see five or six patients an hour to meet their revenue goals, the slower pace of a clinic has immediate appeal. "In our world, we offer family practice doctors at $100 an hour, which is in line with what they generally target to make. Rather than seeing five or six patients an hour, we ask them to see three an hour," Crimmins said. "We want them to dialogue about their conditions, their family background, their nutrition, their exercise, their wellness. All we ask them to do is practice medicine. When they experiencee what it's like, they start asking for more hours." Though a large, industrial employer may be able to staff a clinic full time, many operate only part time, and are appointment-only during their operating hours­no walk-ins. Objections from the provider community occur infrequently, mainly from hospitals that might lose a little bit of lab business. The wellness and prevention aspect, integrated into Novia clinics, is what makes our clinics successful long term, Crimmins said. "Buyers start out desiring the short-term immediate savings, but we've integrated wellness and prevention into the clinic practice," Crimmins said. Novia clinics that are at least three years old are seeing medical and pharmacy inflation of under 6 percent and half of those are under 3 percent, he said. "Because everything is done for free with no copay, there are no barriers to employees and families coming to use the clinic, and people end up doing what they are supposed to do." Collaborator or Competitor? Ties to health insurers remain uncertain, since the clinics remain largely the province of large, self-insuring companies. A health center can be administered as a stand-alone benefit, or integrated into an existing company health plan administration through a TPA or an ASO arrangement. Some managed care companies agree to waive or reduce copays when workers visit the company clinic. The model also fits in well with employers that have adopted high-deductible health plans with medical spending accounts for employees. "The clinics just have to make sure they have the right billing in place for a consumer-driven health plan," Hotz said. "This model is consistent with pushing more accountability to the consumer. Since the clinics are often wellness-oriented, and in a CDHP, preventive services are typically covered, we tend to fit well with those plans." Employees are always free to seek services at other providers within their PPOs, but given the cost benefits, it's hard to see why insurers wouldn't rather see members using the clinics. "It brings payors closer to the providers," said Greg Wright, agent for Consolidated Insurance Services in Indianapolis. "It makes a lot of economic sense for the folks paying the bills. The direct savings are there because the clinics can contract with physicians at a reasonable cost, and that savings then goes directly to the payor." Novia's Crimmins said most employers are already paying $150 per employee, per month for the portion of the healthcare services that clinics can provide. Novia's clinics calculated their spending through October 2008 at $63.86 per employee, per month. Its most expensive clinic was at $103 PEPM and the least expensive was $50 PEPM. "Generally speaking, the savings are significant," Crimmins said. "You can look at it another way. Most family practice doctors in private practice must charge about $500 to $600 per hour in billable charges to earn $100 an hour. In our clinics, we're running at $289 an hour, with only three visits per hour and the doctor still earns $100 an hour. That's roughly 50 percent savings."

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OHIO, KENtuCKY & INdIANA ARtICLE PuLL-Out V In a fully insured environment, the arrangement might be more competitive, though, since the more efficient the worksite clinic becomes at managing the health of the members, the less it might need the disease management services of a health plan. The number of fully insured companies that open clinics remains small, but Take Care foresees growth in that segment as well. Insurers, Hotz said, could find value in treating the on-site clinic almost as another primary care provider in their networks, one that is highly efficient thanks to its direct contact and unique familiarity with the patient group. "We have a considerable body of research into our ability to engage employees in their health, and it's better than traditional health plans," Hotz said. "We make contact at a three- to five-times greater rate than telephonic management because we are there in an established, trusted relationship with the employees. That's a tremendous benefit to a managed care company." Health insurers have another way to capitalize on the value of on-site clinics: open them for their own employees. Hotz said Horizon Blue Cross and Blue Shield of New Jersey has opened three worksite clinics at its offices and support centers with Take Care. "We have another large national payor going live soon with a large health center and pharmacy in the New England area," he said. OUTLOOK: Worksite health clinics appear to be the next big thing, with clearly evident benefits and high satisfaction among employers and their workers. Their presence will increase, and insurers will have to figure out how to treat them. Vendors of clinics already appear to be positioning themselves as network providers, and are likely doing so to take advantage of coming healthcare reforms that will reduce barriers to their use. A worksite clinic's intimate understanding of an employer group suggests it will rank as a highefficiency provider, and insurers should anticipate having to reimburse them at their highest rates.

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