South-Western - Management  
Clinics Treat Workers, Trim Companies' Costs
Topic Employee Benefits
Key Words Health care, health care benefits
News Story

Companies are offering a new benefit to their employees: on-site medical services and clinics. Employers who use the clinics say they are a win-win venture, offering a convenient service to employees to keep them healthy that also helps control the rising cost of health care. Whole Health Management Inc., a company that operates work-site facilities in 30 states says it has seen its business triple since it was founded in 1981.

Employers like Abbott Labs in Chicago who use the on-site clinics say that the program helps keep employees healthy and has the added benefit of increasing morale and productivity, reducing absenteeism, and lowering employee turnover. Employees don't have to take time off from work to drive to a doctor's office to have a prescription refilled or to have a cold checked out. SRA International, a Fairfax, Va.-based defense contractor says that their medical claims are about half the national average after instituting an on-site clinic. For every dollar they spend on the program, the company estimates they have saved $3.50 in costs.

Whole Health estimates that companies can staff a clinic with 10 health care workers serving 2,000 employees for about $1 million a year with start-up costs of about $500,000. Without firm numbers to go on, the company estimates that savings realized would be about a 3-1 or a 5-1 return.

Questions

1.

Whole Health, the company that operates on-site clinics, claims that a company who implements the clinics will have savings in the neighborhood of a 3-1 or 5-1 return. At a cost of about $1 million a year, what are these savings based on?

2.

You are the Benefits Manager at a company that has just decided to implement an on-site clinic to meet employees' health care needs. What steps should you take to ensure the success of the new health care benefit?

Source "Clinics Treat Workers, Trim Companies' Costs," Chicago Tribune, December 13, 2004, Section 4, pp.1 and 4.
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