Tena Hoag received a Health Transformation Award from The Alliance on October 1, 2020 for significantly improving her employees’ access to high-value health care and transforming the way health care is delivered. The Alliance created a case study capturing Tena’s journey so other employers can emulate her success. This blog article is a condensed version of the case study.
How to Save Your Employees 50% on Primary Care Costs
Through self-funding and implementing a shared-site clinic that uses direct primary care, Tena Hoag, CFO of Advanced Laser, helped her organization save approximately 10% on their total health care costs in 2019. They then used those savings to reduce prescription drug prices and create their clinic’s mental health service offering – further improving her employees’ access to high-value health care.
Today, for every dollar Advanced Laser spends on their clinic, employees receive two dollars of care – over a 2:1 return on investment. When compared with the costs of other providers in the area, Advanced Laser’s employees are saving over 50% on health costs by using the shared-site clinic.
Reducing Health Care Costs
Before Tena arrived, all employees were on a traditional PPO plan and Advanced Laser was facing yearly cost increases, so Tena began trying different methods to reduce her organization’s health care costs.
“We kept requoting our insurance package in hopes of finding some relief, and although it was disruptive to our families, we even changed carriers a couple of times to take advantage of that typical ‘good first year’ pricing. We raised deductibles, coinsurances, and used incentives to try and convert our families to high-deductible plans,” she said.
Cutting Costs With Direct Primary Care
Tena finally unlocked significant and lasting savings in 2018 after implementing a shared-site clinic that practices direct primary care.
“Direct primary care is the cornerstone piece of both good health and reduced cost.”
With direct primary care, patients pay a low, set fee to access the clinic near their workplace – which not only saves them money, but also improves their access to high-quality care.
Desirable Services Create Employee “Buy-In”
Tena has been able to get her workforce, top-to-bottom, engaged in their health and has dramatically expanded their access to high-value health care using no- and low-cost services through the shared-site clinic, which offers: biometric screening programs, a smoking cessation program, mental and physical therapy services, and a prescription drug benefit plan.
In tandem with the clinic’s offerings, Advanced Laser utilizes an optional high-deductible health plan for employees, which Tena has made as affordable as possible within the federal rules regarding high-deductible health plans. Additionally, employees are offered a PPO through Advanced Laser.
Employees can get routine health maintenance, preventative prescription services, insulin, and other associated diabetic medical expenses at the clinic free of charge. The clinic also serves as the company’s redesigned EAP, so the first four sessions of mental health services are free for all employees, as well as covered dependents.
The clinic has ensured Advanced Laser’s workforce remains compliant in their health care journey.
The Benefits of a Shared-Site Clinic
“When our employees have positive experiences at the clinic, they tend to tell other employees, and this is really one of the best ways to increase the clinic’s foot traffic.”
And that increased interest in the clinic quickly created a widespread adoption by employees, and a new challenge for Advanced Laser – servicing employees in a timely fashion.
“Our clinic utilization has been high enough that we’ve had to increase its hours of operation not once, but twice, since its inception.
I think the difference between typical healthcare and the healthcare provided at a shared-site clinic is really the development of a relationship between the provider, the patient, and the patient’s family. It’s not simply a checkoff list of symptoms, but rather looking for the root cause. And that root cause doesn’t necessarily require expensive medications, expensive diagnostics, or a referral to a specialist.”
Savings for Employers & Employees
The shared-site clinic has saved its participating employers and their employees a significant amount on their overall health costs, too.
“Without a doubt, the clinic has saved the plan money over the two–and–a–half years that we’ve had it. From 2017 to 2019, our total plan cost per–employee, per–year dropped 32%. The more important thing to focus on, though, is how it saves our employees. The dollars that are saved at the clinic are dollars not being spent by our employees,” Tena said.
Tying Together Incentives With Tiering
By using smart benefit plan design, like tiering, employers can communicate and incentivize employees to choose high-value options where both parties experience significant savings.
“Our plan has been altered to have essentially three tiers… each comes with its own set of deductibles, out–of–pockets, and co–payments. We are trying to build these choices right into the plan so they can make one that’s right for them and right for the plan.”
And by offering a plethora of concierge services and the shared-site clinic, a top-tier choice, Tena’s employees are reaping the rewards of high-value health care. Since the clinic’s inception, medical claims paid on their plan have gone from about $200 per member, per month to about $160.
“In terms of hard dollars, the clinic generates about $4,000 to $7,000 a month in savings, but because most of our folks are on a high–deductible plan, they never reach those deductibles, so those savings are typically passed immediately into the hands of our employees. It makes me smile every time I think about how they can spend that cash on their families instead of on overpriced health care.”
Words of Advice
When asked to share a last bit of advice to employers. Her response was unsurprisingly straightforward: “For anyone considering an on-site or shared-site clinic – just do it. Don’t agonize over the ROI. Don’t wait for the moon and stars to align. Just do good by your people and the rest will take care of itself.”
- Watch the Video of Tena Accepting Her Health Transformation Award
- How to Design a Health Benefits Plan that Saves your Business Money
- How to Control Costs and Improve Health Care Outcomes Using Payment Reform Strategies
- What RAND Corporation’s Hospital Price Transparency Project (RAND 3.0) Means for Employers
- How to Save Your Employees 50% on Primary Care Costs - November 3, 2020
- What RAND Corporation’s Hospital Price Transparency Project (RAND 3.0) Means For Employers - September 22, 2020
- How COVID-19 Is Changing The Cost of Health Care - June 16, 2020