It was about seven years ago that a client of Matt McQuide's approached the vice president at Benefit Controls with a serious, if not uncommon, problem. The 1,000-employee textile firm was experiencing unsustainable rate increases of at least 9%-11% a year. "They looked at us and said, 'If this continues we won't have a business,'" McQuide recalls.

That's when McQuide decided to research installing an onsite health care clinic at the firm. He knew it would cost the employer around $200,000 a year. What he didn't know is whether the experiment would pay off. "They looked at me and said, 'Is it going to work?' and I said, 'I don't know if it's going to work. But I think it's the only shot we have of something working,' says McQuide. "So we put it in and they have just been unbelievable ever since. Claims lower, employees happy."

In fact, just one year later the employer reported that employees would routinely tell him the clinic was the best benefit they received outside of their major medical plan. It's the same story for the 38% of McQuide's clients who now have their own employee clinics, and the 34% of colleague Rick Gantt's who do as well.

"That's how I got into it; what else do we do? Then I saw with my own eyes that it was working not only just on the health plan side for costs, but people were making changes," says McQuide. "Then we really started evangelizing it and going around and saying, 'Hey, this is the thing you need to do.'"

McQuide and Gantt, both vice presidents, now make incorporating employee clinics into an employer's health care arsenal their primary focus at Benefit Controls, a national brokerage with offices in North Carolina, South Carolina, Kansas and Utah. Gantt works out of the Greenville, S.C. office and McQuide is based in Charlotte, N.C.

Growth market

Around 20%-27% of large employers - and even those as small as 200 employees - are beginning to offer worksite health programs such as onsite clinics, fitness centers and onsite pharmacies, according to Larry Boress, president and CEO of the Midwest Business Group on Health. As evidence of the growing popularity of workplace health clinics, in May MBGH launched the National Worksite Health Center Association in conjunction with health care consultancy The La Penna Group (see sidebar).

According to Boress, there are four main reasons why the clinics are continuing to gain employer interest. First is a matter of time management. Research shows that when an employee leaves the office for a medical appointment they are typically gone for at least three hours - if they return at all, Boress says. Having an onsite clinic keeps employees away from the job an average of 20 minutes. "So the productivity issue became huge," he says.

Second is compliance and engagement. While employers are spending millions of dollars on wellness programs and other health care activities, they only get around 15%-20% of employees to actively participate, Boress explains. By having an onsite clinic staffed with a qualified professional who can explain WHY employees need to take certain measures to improve their health, "employers can obtain the engagement they want."

The third reason is simply cost control. "Going outside the local medical community for tests and other services is very expensive," says Boress. "By having basic primary care services onsite you can really reduce that."

Although less tangible than cost savings, the final reason clinics are growing in popularity, says Boress, is the trust factor; "the value that it brings when you've got someone who you can trust who is local." One barrier to employee acceptance is a lack of trust in the level of confidentiality of the operation. But once employees know their information won't be used for performance evaluations, salary negotiations or the like, "there's a great comfort level and people are more engaged in sharing information and participating and getting well."

The rising popularity can also be traced to health care reform, Boress adds. As an estimated one million more people gain health care coverage under the Patient Protection and Affordable Care Act they will be looking for primary care services, which are sorely lacking in many communities across the country. "By having an onsite clinic involved ... you can ensure that your people will get the necessary preventive care," he says.

Gantt finds that the clinics create a culture of caring that truly manifests itself after about a year and a half. "After 18 months employees understand, 'This is wonderful, this is the best thing I've ever had, we don't have to go anywhere, we can walk down the hall or go to a building that's close by and it typically costs us no money,'" he says.

The result: "wonderful success stories" that come back to the CEO. "There's tears and there's hugs and there's caring and it just grows from that," says Gantt. "It gets more participation and it's a true win-win."

But before breaking out the guitar for a round of "Kumbaya," Gantt is quick to point out that the practice is making his clients more competitive in the global business environment.

Structure and the larger picture

In these days of consumer-driven health plans and decreasing group benefits, McQuide says helping clients administer health clinics is "the only thing I've done in my career that actually lowered costs and employees liked it. Everything is lower costs and 'We're squeezing you more.' This is lower costs and 'We're actually giving you something else.'"

McQuide makes it plain at employee meetings that they are the only ones who can do something about the health care crisis in America by being accountable for themselves. In turn, plan designs do not stay neutral. Costs go down in the form of lower deductibles and co-pays for those who are active in the clinics and accompanying wellness programs. Those who are not see their premiums and other costs rise.

Claudia Main, employee relations manager for the city of Hickory, N.C., has worked with McQuide for more than five years. The city has always employed an occupational health nurse, but after hearing from McQuide about the potential benefits of incorporating a general health clinic in-house the city established one in 2006 for its 646 employees on the city health plan.

"We've had a lot of success since," says Main.

Over the first couple of years the city put a compliance program in place where employees on the plan are required to take a health risk assessment. Based on the risk factors that are uncovered, employees must then visit the onsite clinician a certain number of times a year. For example, those with no risk factors, or just one, need only go once a year, while those with more than four must go quarterly, Main explains. An outside clinic administrator keeps track of the program. Employees who are in compliance are rewarded with a more generous health plan than those who are not. Additionally, participants in the city's Medication Dedication program are entitled to free generic medication if the HRA uncovers a risk factor requiring treatment.

The city of Hickory now offers employees two clinics that are open 20 hours a week. Most of McQuide and Gantt's clients have clinics either onsite or very nearby. While the staffing ranges from facility to facility, most employ nurse practitioners. Although the clinics function completely outside of an insurance network, they have the ability to share health information with outside medical professionals.

Originally marketed to self-insured companies, both McQuide and Gantt say the clinics help fully insured employers save money as well. McQuide recently signed up a 350-life fully insured group. "They realized they were 100% experience rated anyway, so even though claims don't go dollar-for-dollar and they won't get the savings right away it will take effect on renewal," he says.

Some clinics are operated by third-party clinic companies; others are partnerships with local physician practices. "It's all over the board," says McQuide.

As for group demographics, participating employers range from computer software companies with an average age of 38 to manufacturing firms with an average age of 48, says Gantt. "The model works in pretty much any environment if it is led by top management and they take it seriously," he adds.

Across their range of clients, McQuide and Gantt's statistics show that 50% of all employees haven't seen the same primary care doctor twice in the last two years. While this is a great reason for them to benefit from an onsite clinic, episodic care only makes up about 30% of clinic visits. Around 40%-50% of appointments are for disease management, and 20%-30% consist of care coordination for those in specialty care needing an adviser. The 15-20 minute appointment slots leave an ample amount of time for employees to visit and discuss questions and concerns with the practitioner, McQuide says.

Of course having such dedicated staff on hand is beneficial, but without tying clinics into the employer's larger health care picture it's just "having health care at a different location" and doesn't "optimize the situation," says Mike La Penna, principal of The La Penna Group, and author of Workplace Clinics and Employer Managed Healthcare: A Catalyst for Cost Savings and Improved Productivity.

"Always think of it as an entrée into a program, not just a different site of care," he says. "Brokers understand that."

McQuide and Gantt certainly do. Some clients enter the clinic business with a wellness program already in place, but for those who don't McQuide and Gantt will create one to go around it.

Rhonda Lockhart, VP of HR at JM Smith Corporation, is full of praise for how Gantt has tied together the company's clinic and wellness programs. JM Smith's approximately 1,100 employees have access to four onsite clinics at the company's largest locations in South Carolina, Georgia and Arkansas.

When Lockhart first told Gantt they'd brought a nurse practitioner onsite in 2004, "he got giddy - just giddy with excitement," she says.

Lockhart wasn't exactly sure how to take advantage of employing an onsite practitioner and Gantt took the reins by installing a health risk assessment requirement for employees and ensuring the nurses were not only available for episodic care but also focused on wellness. True to Gantt and McQuide's observations with other groups, many JM Smith employees had not had a physical in memory. Blood draws revealed a large number of cases of high cholesterol and blood pressure, Lockhart reports. "You would not believe how many things we have caught early because of just the health risk assessment," she says. "We have people that were diabetic that didn't know they were diabetics."

The biometrics found during annual HRAs reveal an "unbelievable" number of employees who are eligible for the company's disease management program, says Lockhart.

Gantt serves as the main contact with the nurse practitioners in his role as manager of JM Smith's disease management program. He'll work with the practitioners, who are outside contractors, to establish the most effective incentives for health improvement. "Rick is just 'Mr. Wellness.' [He] is so successful in what he does with companies [because] he so practices what he preaches and his staff works with him to get you enthused," says Lockhart. "They provide all the support in the world with any type of wellness initiative. You can't help but want to do it."

Gantt is also in charge of claims data mining. After an analysis he'll come to Lockhart with the most pressing areas that need work and ideas for how to adjust employee incentives appropriately. As a result of such analysis he's currently helping to put a smoking cessation program in place.

The right fit

McQuide is performing a similar task for Main and the city of Hickory. This is the first year city employees have been subject to a nicotine surcharge and McQuide was heavily involved with researching it. "He's very progressive. He's a great researcher. You throw an idea out at him and he always comes back with just volumes of information," says Main, adding that with McQuide's guidance the city's claims have gone down, costs remain mostly stable and there are no plans to increase employee premiums.

For programs to be successful it's imperative to stay engaged and actively watch employee data, says Gantt. It was a daunting task with the first few clinics, but now he and McQuide have developed metrics to accurately track the success of programs. "You just have to because you have to tell Mr. CFO what's working and this is why and this is how," says Gantt. "So we developed metrics and we saw trends and now we have financial models where we can go to employers who are considering this application and give them good estimates so they can make a financial case to do it and that just extends on. Then we track our success year over year, dashboard it."

MBGH's Boress believes working with a consultant or broker to run onsite clinics is "incredibly valuable" for employers because of the level of knowledge and experience they bring to the table - not to mention the fact that brokers know firsthand that since each company has its own circumstances, a cookie-cutter approach will not work.

Boress sees employers try to carve out areas of case management, pharmacy, wellness coaching, etc., under separate vendors. The result is a jumble of disconnected data that don't show the true impact of the initiatives on employee health status. A clinic just adds to the noise unless it is properly integrated, he says. "A consultant or broker who really is knowledgeable can build the structure of that from the bottom up; they can be sure that whatever the employer does, it can all be integrated," Boress adds.

There's plenty of room for innovation in the field, and La Penna believes those who are focused on population health management can succeed by positioning themselves as an integral part of direct patient care. "They've got the capability to analyze the claims file and do a lot with the client firm to identify opportunities within their own population for reducing cost," he says.

At JM Smith Corporation, Lockhart reports that costs have remained stable at around 3%-4% a year, a figure that could easily have skyrocketed had the preventative screening program tied to the employee clinic not caught precancerous cells in several employees in recent years.

Lockhart has a message for her fellow HR counterparts who are unsure about establishing an onsite clinic: "The biggest thing I would tell them is don't expect an ROI the first year or maybe even the second year. But you've got to look long term. You've got to project it out five years and say, 'I'm in this for the long haul.'"

McQuide thinks back to how meetings with clients used to go (discussion of the group health plan, stop-loss issues, etc.) and marvels at how much things have changed with the implementation of onsite clinics. "When you talk about affecting your HEALTH claims that's so much larger than the rest of it," he says. "Obviously we work hard to get the lowest reinsurance and the rest of it but in the meeting that could literally be 15 minutes. The only discussion on plan design now is about, 'How do we improve it?'"

Traditional group and voluntary benefit levels tend to remain stable or even improve after clinics are implemented. Without having to worry about those areas, Gantt and McQuide are then free to spend more time discussing the data trend and how to improve things for the following plan year. "We improve the program a little bit every year. So every year you're adding a new twist, giving savings to someone else, reducing co-pays for the drugs, asking a little bit more of them sometimes but then giving more too," he says.

What competition?

Confident and content with the success of the onsite clinics, McQuide says it's his business model now to seek out clients that will fit well with the structure. As a result, 95% of new clients want to implement one.

Gantt and McQuide operate under two different companies. If they are providing traditional brokerage services for a client through Benefit Controls they don't typically profit from a clinic, but for standalone wellness consulting through Team Believe Achieve they charge a fee.

"Our entire delivery is different. Our whole philosophy on the game is different. It's about improving the quality of life, which yields great things," says Gantt. "But to do that is hard. It makes our job harder. Because just to sell reinsurance and do network studies that's pretty simple and traditional brokerage services. But the broker of the future to be successful has to be a partner in reducing health care costs and making an employer's bottom line look better."

It's been six or seven years since McQuide and Gantt have been in the bidding-for-business game. They'll write an RFP for brokerage work, but never bid on a plan. "We write it as if you're ready to make a completely different change for your plan," says McQuide. "I can give them the best bid I can show them based on their bad claims right now, but if they change what they do, that's my goal going forward - to create a whole new health plan."

With that philosophy, "we rarely ever lose business here," he says. "Anybody with these kinds of programs, I don't think we've ever lost one client that has gone this route."

Gantt admits that it's a harder approach, but if the job is done right client costs remain stable. Between the two of them, 12 clients are members of the Benefit Controls Flat Liner Club for those that haven't paid more for health care since as long ago as 2003. Gantt expects that number to be more than 20 in the next 18 months. "If you can deliver that kind of results it's hard to get fired unless you just make a mistake,' says Gantt.

Lockhart's appreciation of Gantt is evidence of that fact. "Do not go into having a clinic without somebody like a Rick Gantt," she says. "You can't do it by yourself."

"When we come in it's fundamentally changing the entire health care system for their employees," says McQuide. "It's not even business as usual anymore. Someone walking in the door can't even talk the same game we're talking because we're fundamentally changing how health care is delivered for those employers."

In addition to not losing a client under the program, McQuide reports that his business has doubled because of the clinics. While colleagues are losing sleep over PPACA and medical loss ratio requirements, the potential impact of health care reform on their business is not even a discussion for Gantt and McQuide. "I don't have to worry about this national health care plan or this exchange program," says McQuide, "because I'm beating everyone so badly that we're going to have our own health plan for a long, long time."

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