Herman Trend Alert: On-Site Clinics Reduce Healthcare Costs

As employers look for ways to further reduce healthcare costs, one strategy that is growing in acceptance is the establishment of On-site medical clinics. According to a study by the consulting firm Watson Wyatt, 33 percent of the 275 organizations that collectively employ more than 4.9 million workers have set up On-site medical clinics or plan to sometime this year.

From "Herman Trend Alert," by Roger Herman and Joyce Gioia, Strategic Business Futurists

Posted: August 24, 2006, 9 a.m., EST

GREENSBORO, NC — As employers look for ways to further reduce healthcare costs, one strategy that is growing in acceptance is the establishment of On-site medical clinics. According to a study by the consulting firm Watson Wyatt, 33 percent of the 275 organizations that collectively employ more than 4.9 million workers have set up On-site medical clinics or plan to sometime this year.

Implementing this concept affords benefits to both employers and their workers. First, on-site clinics deliver greater access to care at lower costs. Because the clinics are on site, they are accessible to the employees — they don’t have to leave to go to the doctor; they are less likely to put off the doctor’s visit that may detect a serious problem, which may now be caught early.

Second, on-site clinics address employees’ overall health issues. Workers don’t have to go to different doctors to receive basic medical care. In addition, on-site clinics provide the organization an opportunity to counsel high-risk employees on their vulnerability for disease and help them address their issues appropriately to minimize their discomfort and cost.

On-site clinics can provide risk management on workplace safety by reinforcing the messages delivered in safety training. Moreover, in the event of worksite accidents, having an On-site clinic means that the company can provide on-the-job treatment of injuries and assessment of illnesses.

Lowe’s, a Mooresville, NC-based home improvement retailer, covers 195,000 workers and their families with an annual expenditure of about $600 million per year on health insurance. By combining several strategies, Lowe’s saved $16 million on health benefits. Some of the strategies they implemented included having no co-pay for generic medicines, installing four On-site health clinics, and giving workers an incentive to complete a health risk assessment.

The company has significantly improved its bottom line without reducing benefit levels for workers. As a result of these initiatives, Lowe’s has had premium increases of only 5 or 6 percent for the last three years, which was lower than the 8 to 9 percent national average for employers.

Expect to see more On-site clinics popping up at employers’ sites throughout North America.

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