A recent survey from Mercer found that worksite clinics are becoming an increasingly popular way to control health care spending and even enhance employee productivity. Until recently, work site clinics were largely popular only at Fortune 500 companies, however the trend is now spreading to local governments and mid-size companies of 500 or more employees.
Work site clinics to date have primarily experienced their return on investment for the employer by providing more efficient care at the worksite clinic rather than paying claims from community physicians. However, the next generation of clinics are in the process of being rolled out and offers a more compelling value proposition and much greater associated healthcare savings.
Because an employer’s primary reason for launching an onsite clinic is typically cost containment, measuring return on investment is critical to gauging the success of the program. In the past, worksite clinics primarily achieved return on investment by reducing claims for primary care/urgent care and ER visits. In addition, they delivered savings for workers compensation and short-term disability. In the current model, there are additional reductions in claims as follows:
- High cost claimants and chronic disease care (from population health management)
- Inpatient/outpatient procedures and diagnostics (price transparency)
- Specialty care (narrow network of value based providers)
Given the promise of cost savings, many employers are searching for tools that can objectively – and accurately – measure the ROI of worksite health clinics.
A Flawed Approach
Many of the traditional strategies used to determine the ROI of employee health and wellness programs are flawed and would not stand up in a respect, peer-reviewed, medical or financial journal. Methods are suspect, studies are poorly designed, and assumptions are often shaky. Some of the common flaws we’ve seen include:
- Biased research and studies conducted by the vendors providing the service
- Use of projected, not actual savings to calculate a program’s payoff
- Difficulty in measuring employee productivity
- Failure to include significant factors benefit design changes
- Failure to include all expenses associated with program implementation
Given these flaws, how can employers improve the accuracy of their ROI calculations?
Towards a More Accurate Solution
Accurate and persuasive evaluation of a worksite health clinic’s ROI should include the following steps:
- A focus on real (as opposed to projected or average) healthcare cost savings linked to individual employee claims data
- Track measurable key performance indicators such as the percentage of employees who are engaged in the program, the per employee per month (PEPM) cost of your company’s health plan before implementing the clinic vs. after implementation, the PEPM cost of the clinic program itself, and percentage improvements in gaps in care, preventative screenings and readmission rates
- Avoid putting a dollar amount on projected productivity gains
- When comparing a group of participants with non-participants, be sure to use statistically accurate measures that account for the bias associated with “pre-selection”
- Consider having an outside vendor perform an evaluation of the program’s ROI
Employers are looking for employee health solutions that offer a one-stop shop for effective healthcare cost containment. The next generation of worksite clinics promises to offer just this. The on-site clinic builds trust and relationships with members, which facilitates engagement in wellness, disease management, and patient advocacy programs driving improved outcomes and lower costs. However, the key to greater adoption of worksite clinics rest firmly on the ability of worksite vendors to deliver accurate, trusted, and positive ROI data that will stand up to rigorous measures.