Improving Employee Health Fuels Growth of Worksite Clinics

However, employers are uncertain how worksite clinics will factor into having to pay the ACA excise tax.

When employers are asked how they plan to control health benefit costs over the long term, they talk about improving employee health, and this is one factor fueling growth in worksite clinics, according to Mercer.

Last year, Mercer’s National Survey of Employer-Sponsored Health Plans found that 29% of employers with 5,000 or more employees provided an onsite or near-site clinic offering primary care services, up from 24% in the prior year. Mercer followed up with these employers in a new, targeted survey on worksite clinics. Of the 134 respondents, 72% of those whose clinics provide general medical services said that managing employee health risk and chronic conditions is an important objective for the clinic.

For more than two-thirds of survey respondents (68%), improving access to care was also an important objective. As the Patient Protection and Affordable Care Act (ACA) expands health coverage to more Americans, primary care shortages in some parts of the U.S. could be exacerbated. Establishing a new clinic, or  expanding an existing occupational health clinic to provide general medical services is one way employers can ensure that their employees—and in some cases employees’ dependents—will have access to quality care. 

However, Mercer notes that an Internal Revenue Service (IRS) notice released this year has clouded the picture by suggesting that the cost of care received through the clinic must be counted in the ACA’s excise tax calculation. “Employers are definitely concerned that the operational costs of a worksite clinic could help push them over the threshold for the excise tax, although most remain convinced that the clinic will deliver positive net value,” says David Keyt, Principal, National Onsite Clinic Center of Excellence Leader.

While 15% of respondents believe their general medical clinic will hurt them in terms of the excise tax calculation, nearly as many (11%) believe it will help—presumably by helping to hold down the cost of the company’s health plan—and 28% believe it won’t have an impact either way. However, 46% of respondents say they don’t know how the clinic will affect the calculation. Typically, the cost of the clinic accounts for 10% or less of their total health care spend, and for about half the respondents, it accounts for 5% or less. 

Measuring clinic success

The great majority of respondents (85%) say that their organization generally perceives the clinic as a success. Specifically, 63% say it has successfully reduced lost work days, and 58% say it has been able to help members control chronic conditions.

Measuring return on investment (ROI) remains a challenge for employers, and only 41% of respondents were able to provide ROI data. An ROI of 1.00 to 1.99 was most common (23% of respondents reported ROI in this range), and 13% reported an ROI of 2.00 or higher. Only 5% have an ROI of less than 1.00.

The best measure of employee satisfaction may be utilization. Respondents report that 45% of employees, on average, used the clinic in 2014. Nearly half of respondents (48%) with a general medical clinic don’t require any copayment for clinic services, and 25% require a lower copayment than the employee would pay for comparable services under the company health plan. The majority of respondents with hourly employees (61%) do not require them to clock out of work for visits to the clinic.

Providing a broad range of services

In clinics that provide general medical services, immunizations and screenings are the most common services offered. Urgent care is provided in 73% of clinics, preventive care exams in 71%, and chronic disease management in 63%. Pharmacy services are offered at 38% of clinics, and just over one-fourth (26%) provide mental health or employee assistance program (EAP) counseling in their clinics.

Worksite clinics are a convenient way for employees to undergo biometric screenings (offered at 77% of clinics), participate in face-to-face chronic condition coaching (60%) and take part in lifestyle management programs such as smoking cessation (59%) or weight management (56%).

The patient-centered “medical home” is a delivery model through which patients—often those who are high-risk or chronically ill—can have their care coordinated by a primary care physician, nurse practitioner, or physician assistant. Using the worksite clinic as a medical home allows employers to offer a greater level of care to the higher-risk, medically challenging employees and dependents who typically account for the largest portion of health care spending. Three years ago, 13% of survey respondents with general medical clinics used their clinic as a medical home. That’s doubled, to 26% of the respondents in this year’s survey, with another 11% considering it. And about half the respondents (49%) say that members are allowed to select the clinic as their primary care provider.