Onsite Clinics: The Answer to Reducing Employers’ Healthcare Costs?

Onsite Clinics: The Answer to Reducing Employers’ Healthcare Costs?

With healthcare costs for employers on an upward trajectory, the solution might lie in turning towards onsite clinics.

Employer healthcare costs have been on a notable rise, with recent findings from the Business Group on Health 2024 Large Employer Health Care Strategy Survey indicating a six percent increase in the overall trend for 2023 and an alarming nine percent hike in the pharmacy-specific trend. Moreover, similar upsurges are projected for 2024. Amidst these increasing numbers, a groundbreaking study points to onsite clinics as a potential solution.

Conducted jointly by the national primary care company, Premise Health, and the health data analytics firm, Cedar Gate Technologies, the study’s methodology was validated by actuarial and consulting firm, Milliman. With data spanning across 19 employers from nine varied industries, this research stands as one of the most expansive in the onsite and nearsite healthcare sector.

Cost-Saving Benefits of Onsite Wellness Centers

The study showed that onsite wellness centers can lead to an impressive average savings of 25 percent on the total cost of care for employers when considering their employees and dependents. This significant finding is based on a vast, representative, claims-based analysis involving more than 148,000 individuals.

Related: Caremark Cost Saver Is a New Way to Reduce Out-of-Pocket Drug Costs

Stu Clark, the CEO of Premise, voiced concerns over the increasing burden of healthcare costs on employers, noting in a press release, “Employers are facing rising healthcare costs that are unsustainable — in fact, healthcare costs are now materially impacting earnings per share at most companies.” 

He highlighted the role of clinical teams at onsite wellness centers, stating, “Our clinical teams intentionally build relationships with members to increase preventive care, to reduce costly emergency care and hospital admissions, and to actively navigate the member to the most efficient point of care. These validated results and the large sample size speak for themselves.”

The study’s methodology meticulously measured the total cost of care savings and also deduced the return on investment (ROI) for onsite and nearsite care. A crucial takeaway was that adopting an appropriate methodology is paramount for accurately gauging the benefits employers and risk-bearing entities can derive from these wellness centers.

Gross savings were determined using a combination of factors, such as direct cost avoidance, productivity savings and total cost of care. According to the collected claims data, Premise-attributed members registered an average savings of 25 percent, translating to $2,014 per member annually for its employers.

Additionally, the study found that consistent access to Premise’s onsite wellness centers led to a 39 percent surge in routine and preventive office visits, a 27 percent drop in emergency room visits and a 36 percent decrease in inpatient hospital admissions. Clark attributed these numbers to the accessibility and convenience offered by onsite wellness centers. 

Improving Moral, Productivity and Job Satisfaction

Onsite clinics not only help employers save money, but they can also play a pivotal role in shaping the workplace environment. Here’s how:

  • Improved employee morale: Knowing that their employer provides easy access to healthcare can enhance employees’ sense of being valued and cared for. This boosts their morale, making them more positive and enthusiastic about their work.
  • Increased productivity: Healthier employees are often more productive. When employees have easy access to healthcare, they can address and manage health issues promptly, leading to fewer sick days and reduced absenteeism. 
  • Enhanced job satisfaction: Access to convenient healthcare can be seen as a perk or benefit, making employees feel that their well-being is a priority for the organization. When employees feel that their needs are acknowledged and met, it increases their satisfaction with their job and the company.

Access to convenient healthcare can also lead to reduced stress, employee retention, promotion of preventive healthcare, reduced long-term healthcare costs for employers, enhanced mental health and an overall positive workplace culture. 

Challenges and Limitations of Onsite Clinics

While onsite clinics offer several advantages, there are challenges and limitations to consider. The scalability of this model can vary based on business size, the nature of the work and other factors. Here are some challenges and considerations:

  • Initial investment and costs: Setting up an onsite or nearsite wellness center requires a significant initial investment. This includes costs related to infrastructure, equipment, personnel and technology. For small businesses or startups, these upfront costs might be prohibitive.
  • Ongoing maintenance and upgrades: Once established, these centers require continuous funding for maintenance, equipment upgrades and staff salaries. This means a consistent financial commitment which not every company can afford.
  • Space requirements: Especially for onsite clinics, allocating space within company premises can be a challenge, particularly for businesses located in urban areas where real estate is expensive or limited.

While onsite or nearsite health may not be the right fit for all employers, with healthcare costs for employers on an upward trajectory, the solution might lie in turning towards nearsite or onsite wellness centers. As Premise’s study suggested, not only do they offer a direct avenue for substantial savings, but they also promote preventive care, reducing expensive hospital and emergency room visits.