Reason No. 1 Reduced Healthcare Costs
Offering an onsite healthcare option, such as a primary care clinic that serves as a direct primary care provider for employees, allows employers to provide vital preventive and early intervention healthcare services. As discussed earlier, these services can go a long way toward reducing treatment for costly, advanced chronic illnesses and expensive trips to the emergency room, which can ultimately decrease overall healthcare costs for employers.
Reason No. 2 Improved Employee Productivity and Engagement
Onsite clinics allow employees to manage their healthcare with fewer barriers. This means that workers are more likely to address illnesses promptly before they worsen and, thus, miss less time on the job. According to the Centers for Disease Control and Prevention, employee absenteeism costs employers $225.8 billion annually (or $1,685 per employee) in lost productivity—something to take into serious account when weighing the benefits of onsite clinic implementation.
Reason No. 3 Lower Turnover and Recruitment Costs
For those in the job market, benefits have always been a compelling component of their search. Employers who provide perks, such as convenient onsite clinics, show candidates and current staff that their health and wellness are company priorities. As a result, employee engagement and morale improve, which can reduce turnover. Lower turnover rates mean reduced recruitment and training costs, another positive impact on the employer’s bottom line.
Reason No. 4 Customized Wellness Programs
Ideally, corporate wellness programs create healthier employees who are, therefore, more likely to be present, motivated, and focused on their work. Known as the “employee positivity factor,” this attitude can produce intangible benefits for employers, such as improved customer experience, increased sales, and innovative solutions. Furthermore, wellness programs have been shown to have a positive financial impact on healthcare expenditures. One study found that lower healthcare costs were an associated result of employee participation in a wellness program over a 5-year period.
Reason No. 5 Actionable Data and Analytics
When employers establish a customized onsite clinic, they can use data to develop an appropriate set of services that will help the employer achieve the best return on investment. Once established, an onsite healthcare program can collect valuable, actionable data. For example, employers can pull metrics about savings that result from employees seeking care at the onsite clinic as opposed to an ER or urgent care center.
Any type of employer-sponsored coverage can incorporate an onsite clinic. Employers that self-fund (also known as self-insure) their benefits plans will especially benefit. Let’s look at why that is and how employers can achieve their health and cost goals.
Role of Self-Funded Employer-Sponsored Health Plans
With self-funded employer-sponsored health plans, employers assume the financial risk of providing benefits to their employees. A business pays its workers’ claims as they occur using money it sets aside monthly instead of paying an insurer one lump sum, as is the case with fully insured plans. At the end of the year, the money accumulated is weighed against claims paid out. For the employer, that difference becomes either savings or an additional expense to cover the overage.
An increasing number of businesses are choosing the self-funded route for their employer-sponsored health plans. According to the results of a 2022 KFF employer health benefits survey, 65 percent of covered workers surveyed were enrolled in employer self-funded health plans, which is 5 percent higher than in 2012. Is self-funding the right choice for your organization?
As businesses look for ways to control costs while providing high-quality health benefits, many are pursuing self-funded health plans as a way to achieve their goals.
The pros of self-funded plans include the following:
- Self-funded plans offer more flexibility because benefits can be customized to the specific needs of their workers.
- Self-funding can have cost benefits since employers are not subject to state health insurance premium taxes.
- Self-funded plans give employers control over health plan reserves.
- Self-funding allows employers to retain any unused funds that have been set aside for insurance claims.
Although self-funding offers many important advantages, it may only be right for some organizations. For example, employer-sponsored health plans carry risks because unexpected claims can strain a business’s cash flow.
How Can Employer Health Clinics Support Self-Funded Plans?
For businesses that self-fund their health benefits plans, supporting patient health at the primary care level is especially critical. When employees don’t use primary and chronic care services, they often incur higher medical expenses for health conditions that could have been either prevented or treated in less intensive settings than an emergency room or urgent care. The result is not only damaging to an employee’s health, but it can also become extremely costly for companies with self-funded health plans. Unexpected, catastrophic claims can strain a business’s cash flow and budgets. To improve access to and use of primary and chronic care services, companies that offer self-funded health insurance are turning to employer clinics as a viable solution.
How Can You Bring Onsite Care to Your Workplace?
Do employer health clinics sound like an effective way to stabilize costs while improving employee health? If so, here are a few of the basic steps involved in establishing an onsite clinic for your workers.
Step 1 Planning
After selecting your onsite care solution provider, your initial discussions should focus on the needs of your specific employee population. For example, would your workers benefit from access to a generic drug plan? Do you have employees with high deductibles for whom access to in-network clinicians is important? The results of these initial discussions will help structure clinical services and their delivery at your clinic. Client site visits will also occur to scout possible clinic space locations.
Step 2 Working with Health Plans and TPAs
For businesses that self-fund their health benefits plans, clinics do not have a relationship with the health plan because the health plan isn’t paying the clinic. The general belief is that self-funded plans should work with a third-party administrator (TPA) to simplify and streamline the claims process. In addition, TPAs collect important data that can be shared with the employer. In a self-insured plan, claims aren’t being paid by the TPA, but the clinic can still file zero-dollar claims back to the TPA, which allows the TPA to provide important utilization metrics with the employer.
Step 3 Supporting the Deliverables
Once a clinic is live, the employer’s HR team should develop strategies to continuously engage and encourage employees to use the preventative services available to them onsite.
Step 4 Measuring Results
To optimize onsite clinic operations, businesses must fully understand what’s working and what isn’t. Monitoring and tracking metrics and goals over time will help employers know how to refine and strengthen their program offerings.
