As president and CEO of PureSafety, a growing technology company that empowers health and safety professionals by providing them with the tools they need to ensure the well-being of workers, comply with regulatory requirements and improve businesses, I am particularly attentive to factors affecting occupational health clinics. In my opinion, one of the biggest challenges these clinics face is responding effectively to employers’ increasingly influential role in healthcare. Adapting to necessary change is rarely easy, but I believe that significant opportunities will emerge for providers who embrace change and implement innovative service delivery models.
Spiraling healthcare costs
Employer-sponsored insurance is the leading source of health insurance, covering about 157 million non-elderly people in America.1 According to the Kaiser Family Foundation Employer Health Benefits 2010 Annual Survey, the average annual premiums in 2010 were $5,049 for single coverage and $13,770 for family coverage, and they’re not getting any cheaper. A recent survey conducted by the non-profit organization National Business Group on Health reveals that employers estimate their healthcare benefit costs will increase an average of 7.2 percent in 2012, which is twice the rate of inflation. That number is only slightly lower than this year’s 7.4 percent average increase.2
What’s more, a growing number of firms are experiencing huge jumps in workers’ compensation insurance premiums. Base rates, which insurers use to determine premiums, are rising in a number of states, with some seeing double-digit increases: Hawaii, 15.8 percent; South Carolina, 20.3 percent; and Florida, 21.5 percent. Not long ago, mandatory insurance was a routine business cost. But rising premiums and claims costs are spurring employers to invest even more money to control costs, says Sara Taylor, president of Structured Health Resources Inc., a Chicago disability-management consulting firm. “Employers are recognizing that they have to be actively involved to look out for their best interest,” she says.3
Health insurance and workers’ compensation claims costs are only part of the picture. The indirect costs of poor health, including absenteeism, disability and lost productivity may be several times higher than direct medical costs.4
The labor force participation rate for older workers has been rising since the late 1990s.5 The fact that the U.S. workforce is aging only exacerbates the higher healthcare cost issue. As the work force continues to age, the number of medical problems is likely to increase due to normal aging and poor health resulting from chronic medical conditions or an unhealthy lifestyle.6
One significant change being instituted by employers is a move to the provision of both occupational and personal healthcare services at the worksite. While occupational medicine clinic growth is expected to grow only nominally in the next three to five years,7 onsite clinic growth is expected to be 15-20 percent per year.8
Larger employers, in particular, are initiating change by beginning to contract directly with healthcare providers, bypassing insurers and third-party administrators. That is one reason why we are beginning to see an increase in onsite clinics. Humana seems to be aware of this trend; its acquisition of Concentra, a national firm which supports more than 300 occupational health/urgent care centers as well as mobile medical services and onsite clinics, is perceived as an attempt to reposition itself to improve access to employers, who are influential healthcare purchasers.
They are also instituting prevention-related activities such as on-the-job safety and wellness programs, because higher healthcare costs are increasing the return on such programs. An additional incentive for instituting prevention programs is the fact that employers are beginning to appreciate the importance of maintaining a healthy workforce.
The employer-employee relationship
The intersection of the employer-employee relationship is the key point at which meaningful changes to our healthcare system can occur. Employers have an excellent opportunity to circumvent costly “after-the-fact” healthcare by instituting worksite health promotion and wellness programs that improve and sustain employees’ health.
Clearly, maintaining a healthy workforce is in the best interest of the employee and the employer. Additionally, it encourages retention. For example, a study by Towers Watson and the National Business Group on Health shows that organizations with highly effective wellness programs are associated with lower voluntary attrition (9 percent with a wellness program vs. 15 percent without one).9
What this means
To be successful, occupational healthcare providers need to take a more strategic approach to product line development. Traditional occupational medicine clinics must evolve their delivery models to include onsite services or risk losing market share. They also need to consider incorporating wellness/prevention and urgent care into their service offerings.
Clinics will find that the opportunities to expand their service offerings have never been greater. As the workforce ages, employers will seek occupational healthcare providers who place an increased emphasis on responsive workers’ compensation care as well as aggressive return-to-work and absence management programs.
1 Kaiser Family Foundation, Kaiser Commission on Medicaid and the Uninsured, The Uninsured: A Primer, October 2009
3The Soaring Cost of Workers’ Compensation; http://www.workforce.com/section/02/feature/23/39/86/index.html
4 Partnership for Prevention. Leading by Example: CEOs on the business case for worksite health promotion. Washington, DC: 2005.
6 Kathy Dayvault, RN, MPH, COHN-S/CM. “Effective Total Absence Management Programs.” Tracker Journal for Occupational Health & Safety Professionals, Vol. 14 number 1 (Spring 2011) 10 – 12.
7 Urgent Care Association of America, “2010 Benchmarking Survey Results
8 Fuld & Company “The Growth of On-Site Clinics 2009