ONSITE CARE: CAN THIS STRATEGY CHANGE YOUR HEALTHCARE GAME?

March 20, 2014

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TOPICS COVERED TODAY

• Intro

• Who’s a Good Fit and How to Build an Onsite Program

• Cost Structure and Payment Methods

• Keys to Onsite Success

• Client Stories

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INTRO

Why are companies considering onsite care?

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Employers are frustrated with the

amount of waste we’re seeing in

our health care system.

How big is it?

That’s…

33-52% of a total health care spend of $2.6 trillion

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WASTE IN THE US HEALTHCARE SYSTEM

THE CONSUMER

THE SYSTEM

HIGH COST OF ILLNESS

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“Unscheduled absences can cost employers $3,600 a year per hourly worker, so helping your employees stay healthy and on the job is smart business whether you have two employees or 200.”

—Kaiser Permanente

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REASONS FOR ESTABLISHING AN ONSITE CLINIC

ADDITIONAL CONSIDERATIONS

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• Experiencing High Absenteeism

• Low Utilization of Primary Care

• Quality of Local Providers

• Needs of the Population

Photo via Wikipedia

INCREASED EMPLOYEE DEMAND

• Employees view this as a benefit!

• Clinics have become common in the workplace

• By 2015, onsite clinics are expected to serve more than 13 percent of the under 65 population in the US compared to 4 percent in 2008*

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*Massachusetts Research Company

PATIENT-CENTERED HOME

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http://youtu.be/btsGDHO_4lU Patient-Centered Medical Home via Spectrum Health

WHO’S A GOOD FIT & HOW TO BUILD A PROGRAM What types of companies can make onsite care work? How does onsite care work, exactly?

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ONSITE CLINIC MODELS

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• Traditional Clinic o Near Site or Shared Clinics

• Direct Primary Care • Limited Service Clinic • Mobile Medicine

TRADITIONAL SERVICES

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• Occupational Health • Acute Care • Preventive Care • Wellness • Chronic Care and Disease Management

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ADDITIONAL SERVICES • Physical Therapy and Chiropractics • Radiology • Dermatology, Orthopedics, Pediatrics • Dentistry • EAP – Behavioral Health • Laboratory • Travel Medicine • Minor Procedures

Photo by Joe Goldberg via Flickr

TRADITIONAL ONSITE CLINIC

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• Hire third-party vendor • Employ all clinic staff and management • Hybrid — employ clinic staff but managed by contracted physician • Contract with local providers to operate the clinic • Shared clinics

Towers Watson

DIRECT PRIMARY CARE

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It’s retainer primary care practice. Basically, you get a company doctor, and your employees are VIPs (very important patients).

DEFINITION

DIRECT PRIMARY CARE

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EXAMPLE

Characteristic Traditional Practice Direct Primary Care Practice

Panel size 2,000-3,000 < 500

Provider incentive Volume-based Quality-based

PT access to MD Through call center 24/7 access to MD cell phone/email

PT appointment scheduling Weeks out Same day/next day guaranteed

Appointment length Appointment times < 10 min Appointment times > 30 min

Waiting room times Often > 1 hour No waiting

Annual exam Brief, it at all Comprehensive with lab work

Care Location MD office MD office, patient home, workplace, cell phone/email

Care coordination Minimal Complete

LIMITED SERVICE CLINIC

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Nurse Practitioner or Physician Assistant

Photo via Wikipedia

MOBILE MEDICINE

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Transporting the office to the patients to diagnose, monitor, and treat health conditions.

DEFINITION

MOBILE MEDICINE

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http://youtu.be/p8jbV1rugyc UnitedHealth Group: Connected Care Telehealth Video via Connecting Care

TELEMEDICINE AND KIOSKS

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INTEGRATION • Collaborate with other health plan programs, e.g. care management • EAP • Workers comp • Safety (OSHA ) • Onsite fitness • Pandemic planning

Photo by Liza via Flickr

COST STRUCTURE & PAYMENT METHODS How do we pay for onsite care?

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ACCESS AND ELIGIBILITY Who can use the clinic? • Employees • Dependents • Limit to those in the health plan • Shared facilities with other employers • General public

Hours of operation • Shifts of employees • Anticipated utilization • Flexibility of staff • Coordination with other providers

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Photo by Enrico Donelli via Flickr

VENDOR PAYMENT METHODS

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• Direct costs plus a management fee • Per member per month • Monthly flat fee

Photo by Andrew Magill via Flickr

START-UP COSTS

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• None — Built into vendor fixed rate • Small initial investment in an exam room • Clinic build out

o 500 to 2,000 square feet o $50 to $100 per square foot

• Start with basic services and add over time

START

OPERATING COSTS

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• 70% to 80% labor Family Practice Physician: $170,000 Nurse Practitioner; $94,000 Physician Assistant: $90,500 Registered Nurse: $65,000 Certified Nursing Assistant: $42,000 Physical Therapists: $83,000

• 20% to 30% supplies Immunizations Medications Minor Equipment Laboratory

EMPLOYEE INCENTIVES AND OUT OF POCKET EXPENSES

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• Most have low or no copays to encourage utilization • Services may be provided at cost with no markup e.g. immunizations, minor equipment (crutches) • Equipment could be loaned

COPAY NO -or- LOW

HEALTH BENEFIT DESIGN

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Core Plan

• Deductible - $3500 per individual

• Coinsurance

– Preventive Care – 100% (all providers)

– All other services including Rx - 80% benefit in-network

• Maximum Out-of-Pocket - $6350 per individual

HEALTH BENEFIT DESIGN

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Choice Available

• Option 1:

– $1000 company contribution to Health Savings Account

– No access to On-Site Clinic/DPC model for non-preventive

care

-OR-

• Option 2:

– $0 co-pay for primary (non-preventive) care at on-site

clinic/DPC provider

– Selection of Option 2 disqualifies access to HSA funding

KEYS TO ONSITE SUCCESS

How do I comply with regulations?

What are best practices?

How do I measure performance?

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HSA RULES AND WORKPLACE CLINICS

• HSAs are tax-exempt accounts that must be linked to health plans with high deductibles

• Under IRS rules, enrollees in HSA-eligible plans must pay full market value for medical care until they have met the entire deductible

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ERISA

• Narrow exemption exists for certain clinics

• Treatment of minor injuries or illness or rendering first aid in case of accidents occurring during working

• If the clinic does not fall within this definition, it is considered a welfare plan is needs to comply with ERISA

• ERISA claims and appeals procedures

• Plan Document, SPD, Form 5500, Summary Annual Report are all required

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ACA COMPLIANCE

• Must include clinic in the cost of coverage reported on the W-2 if COBRA premium is charged

• Value is included in the cost of employer coverage when performing Cadillac tax calculations

• Must comply with wellness rules

• Other mandates such as 100% preventive care, emergency care, etc.

• Additional guidance regarding ACA impact on on-site clinic would be welcome

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ADDITIONAL REGULATORY CONSIDERATIONS

• State corporate practice of medicine laws

• Fraud and abuse Laws

• HIPAA

• Medical malpractice

• Rules for nondiscrimination in favor of highly compensated employees

• Accreditation and licensure

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AVAILABILITY BY EMPLOYER SIZE

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# of Employees Full Service

Onsite Clinic Limited Service Onsite Clinic

Mobile Medicine

Direct Primary Care

Mid-Size (<200) n/a X X x

Larger (200+) X X x x

SUCCESSFUL PROGRAM BEST PRACTICES

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Essential • Leadership Support • Continual Communication • Patient Medical Home • Providers that Fit

BEST

MEASURES OF SUCCESS

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• Savings — direct and downstream • Operational — attendance, wait times, etc. • Satisfaction — employer and employee • Utilization — physicals, visits • Clinical outcomes

RETURN ON INVESTMENT

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• T&W — Over half do not track savings • Not tracked because

o Complex o No access to past claims o Difficult to measure cost avoidance o Catastrophic events can skew results o Higher use due to incentives or lower costs

• Hard ROI • Soft ROI • Most studies estimate the ROI between 2 to 3 years

SUCCESSFUL PROGRAM OUTCOMES

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• Coordinated Care • Control Downstream • Transparency and Consumerism • Promote Wellness

SUCCESS STORIES

How have other firms made onsite care work?

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SUCCESS – TRADITIONAL CLINIC

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OUTCOME: Integrated diabetes management program into primary care model for 2.4 ROI.

MANUFACTURER WITH 1,000 EMPLOYEES

SUCCESS – DIRECT PRIMARY CARE

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OUTCOME: The strategy yielded 9.2% reduction in first year health care costs.

MANUFACTURER WITH 550 EMPLOYEES

SUCCESS – LIMITED SERVICE CLINIC

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OUTCOME: Detected several serious health problems and connected employees with primary care physician.

Photo via Wikipedia

MANUFACTURER WITH 80 EMPLOYEES

QUESTIONS

THANK YOU!

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