2/27/2007

Corporate On-site Health Care

Different approaches have been taken to increase the demand for healthy lifestyles in order to decrease insurance costs. The government uses tax dollars to implement programs like Gold Medal Schools and educational websites. Companies have been shifting the burden of insurance costs to employees and then subsidizing employees when they live a healthy lifestyle. Other companies have taken the bull by the horns and provided health facilities for their workers.

Whole Health Management is a company that manages on-site primary care and fitness centers for dozens of corporations. On-Site health care clinics are a growing phenomenon for medium to larger companies as shown in this CNBC video from the Whole Health Management website. According to an article in the Washington Post the convenience of the clinics increases demand and not only gives direct savings in health care costs, but helps eliminate lost work time because a cold does not turn into bronchitis or high blood pressure does not turn into a stroke and so forth. Even a company with only 1500 workers and having a workforce that was considered young was able to save $1000 per employee in the first year.

The more I look for companies to work for the more I see a divergence between companies that treat employees as assets and others that treat employees as an expense. If an employer is going to have to pay for the new engine in the end, would it not be beneficial to pay for and make sure there were regular check-ups?

6 comments:

joseph said...

Good point. In general there still are a lot of companies that treat their human resources as an expense rather than an asset. Having a healthy corporate culture and treating your employees in a way that makes them feel appreciated ultimately helps reduce costs by increasing effeciency. On-site health care goes hand in hand with this idea.

Jacob said...

I think that having an onsite health care facility is a great idea for companies. I do not think that companies who have these facilities are treating their employees as expenses. In my opinion, having the onsite health care facility is a good strategic management decision.

mason said...

I also think this is a great idea for companies to adopt. It may be a little expensive at first to implement, but in the long run it will save a company alot of money. I work in the health field as a registered nurse and the best way to correct health related complications is take preventative measures. This includes getting a routine physical and check-up, exercising, eating healthy, and following the prescribed medication regemine. I see people on a daily basis who are suffering as a result of their noncompliance with these preventative measures.
I bet there would be a great improvement in the nation's overall health if larger companies could adopt these on-site medical clinics and provide the right incentives for their employees to use them. Who knows, maybe it would eventually decrease the overall cost of health care, especially dealing with insurance companies.

Jackson said...

The benefits are three-fold. Joseph, Jacob, and Mason RN already touched on the benefits of an overall healthy population and a cost-cutting move by companies.
I think that the move to on-site health clinics ,if popularized, will make a huge blow in the favor of healthcare reform. The major problem with healthcare now, is that too many people have their hands in the pie. For example, my father is a Hospital Administrator who works for a large for-profit corporation based out of Tennessee. He has calculated that he makes 8 dollars in salary, stock options and financial incentives for every patient that walks through his hospital's doors. While he enjoys his corporate set salary he also understands that it is a major problem for high healthcare costs. Imagine the salaries that the corporate officers take home. They are not worth what they make. However, they do play an important role in the structure of our healthcare system. By reducing the demand for healthcare through onsite clinics will force Healthcare corporations to cut costs and reduce prices.

Dr. Tufte said...

-1 on Mason for spelling errors.

Oh gosh Kate, you're so close!

Let me fill in the blanks: health services like this provide an implicit benefit for firms that is measured in economic profit but is unlikely to be measured in accounting profit.

Madeline said...

Just to play the devil's advocate, it would be frustrating to me to see co-workers running to the clinic akin to the way elementary school kids run to the school nurse when they are bored or don't want to take a test. I wonder if an in-house clinic, as a resource, would be over-used since the costs (time away from work, scheduling, possibly co-payments) have been reduced. If it is just as easy to kill an hour in the ‘nurse's office’ as it is to work, couldn't productivity actually decline? My hope is that people grow out of this kind of behavior after elementary school, but my experience is that it still exists.