ONSITE CARE: CAN THIS STRATEGY CHANGE YOUR HEALTHCARE GAME? May 29, 2014

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1 ONSITE CARE: CAN THIS STRATEGY CHANGE YOUR HEALTHCARE GAME? May 29, 2014

2 TOPICS COVERED TODAY Intro Who s a Good Fit and How to Build an Onsite Program Cost Structure and Payment Methods Keys to Onsite Success Client Stories 2

3 INTRO Why are companies considering onsite care? 3

4 Employers are frustrated with the amount of waste we re seeing in our health care system. 4

5 That s 33-52% of a total health care spend of $2.6 trillion How big is it?

6 WASTE IN THE US HEALTHCARE SYSTEM THE SYSTEM THE CONSUMER 6

7 HIGH COST OF ILLNESS Unscheduled absences can cost employers $3,600 a year per hourly worker, so helping your employees stay healthy and on the job is smart business whether you have two employees or 200. Kaiser Permanente 7

8 REASONS FOR ESTABLISHING AN ONSITE CLINIC 8

9 ADDITIONAL CONSIDERATIONS Experiencing High Absenteeism Low Utilization of Primary Care Quality of Local Providers Needs of the Population Photo via Wikipedia 9

10 INCREASED EMPLOYEE DEMAND Employees view this as a benefit! Clinics have become common in the workplace By 2015, onsite clinics are expected to serve more than 13 percent of the under 65 population in the US compared to 4 percent in 2008* *Massachusetts Research Company 10

11 PATIENT-CENTERED HOME Patient-Centered Medical Home via Spectrum Health 11

12 WHO S A GOOD FIT & HOW TO BUILD A PROGRAM What types of companies can make onsite care work? How does onsite care work, exactly? 12

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14 ONSITE CLINIC MODELS Traditional Clinic o Near Site or Shared Clinics Direct Primary Care Limited Service Clinic Mobile Medicine 14

15 TRADITIONAL SERVICES Occupational Health Acute Care Preventive Care Wellness Chronic Care and Disease Management 15

16 ADDITIONAL SERVICES Physical Therapy and Chiropractics Radiology Dermatology, Orthopedics, Pediatrics Dentistry EAP Behavioral Health Laboratory Travel Medicine Minor Procedures Photo by Joe Goldberg via Flickr 16

17 TRADITIONAL ONSITE CLINIC Hire third-party vendor Employ all clinic staff and management Hybrid employ clinic staff but managed by contracted physician Contract with local providers to operate the clinic Shared clinics Towers Watson 17

18 DIRECT PRIMARY CARE DEFINITION It s retainer primary care practice. Basically, you get a company doctor, and your employees are VIPs (very important patients). 18

19 DIRECT PRIMARY CARE EXAMPLE Characteristic Traditional Practice Direct Primary Care Practice Panel size 2,000-3,000 < 500 Provider incentive Volume-based Quality-based PT access to MD Through call center 24/7 access to MD cell phone/ PT appointment scheduling Weeks out Same day/next day guaranteed Appointment length Appointment times < 10 min Appointment times > 30 min Waiting room times Often > 1 hour No waiting Annual exam Brief, it at all Comprehensive with lab work Care Location MD office MD office, patient home, workplace, cell phone/ Care coordination Minimal Complete 19

20 LIMITED SERVICE CLINIC Nurse Practitioner or Physician Assistant Photo via Wikipedia 20

21 MOBILE MEDICINE DEFINITION Transporting the office to the patients to diagnose, monitor, and treat health conditions. 21

22 MOBILE MEDICINE UnitedHealth Group: Connected Care Telehealth Video via Connecting Care 22

23 TELEMEDICINE AND KIOSKS 23

24 INTEGRATION Collaborate with other health plan programs, e.g. care management EAP Workers comp Safety (OSHA ) Onsite fitness Pandemic planning Photo by Liza via Flickr 24

25 COST STRUCTURE & PAYMENT METHODS How do we pay for onsite care? 25

26 = ACCESS AND ELIGIBILITY Who can use the clinic? Employees Dependents Limit to those in the health plan Shared facilities with other employers General public Hours of operation Photo by Enrico Donelli via Flickr Shifts of employees Anticipated utilization Flexibility of staff Coordination with other providers 26

27 VENDOR PAYMENT METHODS Direct costs plus a management fee Per member per month Monthly flat fee Photo by Andrew Magill via Flickr 27

28 START-UP COSTS None Built into vendor fixed rate Small initial investment in an exam room Clinic build out o 500 to 2,000 square feet o $50 to $100 per square foot Start with basic services and add over time START 28

29 OPERATING COSTS 70% to 80% labor Family Practice Physician: $170,000 Nurse Practitioner; $94,000 Physician Assistant: $90,500 Registered Nurse: $65,000 Certified Nursing Assistant: $42,000 Physical Therapists: $83,000 20% to 30% supplies Immunizations Medications Minor Equipment Laboratory 29

30 EMPLOYEE INCENTIVES AND OUT OF POCKET EXPENSES Most have low or no copays to encourage utilization Services may be provided at cost with no markup e.g. immunizations, minor equipment (crutches) Equipment could be loaned NO -or or- LOW NO NO COPAY LOW 30

31 HEALTH BENEFIT DESIGN Core Plan Deductible - $3500 per individual Coinsurance Preventive Care 100% (all providers) All other services including Rx - 80% benefit in-network Maximum Out-of-Pocket - $6350 per individual 31

32 HEALTH BENEFIT DESIGN Choice Available Option 1: $1000 company contribution to Health Savings Account No access to On-Site Clinic/DPC model for non-preventive care Option 2: -OR OR- $0 co-pay for primary (non-preventive) care at on-site clinic/dpc provider Selection of Option 2 disqualifies access to HSA funding 32

33 KEYS TO ONSITE SUCCESS How do I comply with regulations? What are best practices? How do I measure performance? 33

34 HSA RULES AND WORKPLACE CLINICS HSAs are tax-exempt accounts that must be linked to health plans with high deductibles Under IRS rules, enrollees in HSA-eligible plans must pay full market value for medical care until they have met the entire deductible 34

35 ERISA Narrow exemption exists for certain clinics Treatment of minor injuries or illness or rendering first aid in case of accidents occurring during working If the clinic does not fall within this definition, it is considered a welfare plan is needs to comply with ERISA ERISA claims and appeals procedures Plan Document, SPD, Form 5500, Summary Annual Report are all required 35

36 ACA COMPLIANCE Must include clinic in the cost of coverage reported on the W-2 if COBRA premium is charged Value is included in the cost of employer coverage when performing Cadillac tax calculations Must comply with wellness rules Other mandates such as 100% preventive care, emergency care, etc. Additional guidance regarding ACA impact on on-site clinic would be welcome 36

37 ADDITIONAL REGULATORY CONSIDERATIONS State corporate practice of medicine laws Fraud and abuse Laws HIPAA Medical malpractice Rules for nondiscrimination in favor of highly compensated employees Accreditation and licensure 37

38 AVAILABILITY BY EMPLOYER SIZE # of Employees Full Service Onsite Clinic Limited Service Onsite Clinic Mobile Medicine Direct Primary Care Mid-Size (<200) n/a X X x Larger (200+) X X x x 38

39 SUCCESSFUL PROGRAM BEST PRACTICES Essential Leadership Support Continual Communication Patient Medical Home Providers that Fit BEST 39

40 MEASURES OF SUCCESS Savings direct and downstream Operational attendance, wait times, etc. Satisfaction employer and employee Utilization physicals, visits Clinical outcomes 40

41 RETURN ON INVESTMENT T&W Over half do not track savings Not tracked because o Complex o No access to past claims o Difficult to measure cost avoidance o Catastrophic events can skew results o Higher use due to incentives or lower costs Hard ROI Soft ROI Most studies estimate the ROI between 2 to 3 years 41

42 SUCCESSFUL PROGRAM OUTCOMES Coordinated Care Control Downstream Transparency and Consumerism Promote Wellness 42

43 SUCCESS STORIES How have other firms made onsite care work? 43

44 SUCCESS TRADITIONAL CLINIC MANUFACTURER WITH 1,000 EMPLOYEES OUTCOME: Integrated diabetes management program into primary care model for 2.4 ROI. Photo by WITI Fox 6 44

45 SUCCESS DIRECT PRIMARY CARE MANUFACTURER WITH 550 EMPLOYEES OUTCOME: The strategy yielded 9.2% reduction in first year health care costs. 45

46 SUCCESS LIMITED SERVICE CLINIC MANUFACTURER WITH 80 EMPLOYEES OUTCOME: Detected several serious health problems and connected employees with primary care physician. Photo via Wikipedia 46

47 QUESTIONS

48 THANK YOU! 48