Onsite Clinic Feasibility Study Status Update
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1 Onsite Clinic Feasibility Study Status Update January 19, 2016 Chris Woertz Account Executive Human Capital Practice Sue Cugno Vice President Human Capital Practice Douglas J Ley Senior Vice President Director, National Actuarial Practice
2 Background BPS retained Willis to assist with the following: 1. Completing an economic feasibility study to quantify the economic viability of establishing an onsite clinic. 2. Assessing employee s perceptions of an onsite clinic. Would they use one and what would be their concerns if an onsite clinic were built? 3. Supporting an RFP Process to obtain firm terms to support a final recommendation concerning an onsite clinic. Based on the results obtained through the preliminary economic feasibility analysis and focus groups, Willis recommends that BPS obtain firm proposals for the operation of up to three onsite clinics. Those results will support a final recommendation and allow BPS to make an informed decision concerning the investment. Cut a path, leave a trail 2
3 Employee Perceptions of an Onsite Clinic Total of 70 employees and SIAC members participated in 8 focus groups. Economic success is dependent on employee and dependent use. Willis focus groups explored the following: Participation in the BPS biometric screening process (recognizing this service could be provided by the clinic) Use of primary care physicians Perceptions and knowledge of onsite clinics Whether employees would consider using an onsite clinic Concerns employees may have about using onsite clinic The scope of services that employees would expect Whether employees have concerns over using an onsite clinic for minor work related injuries, pre-employment and DOT testing Cut a path, leave a trail 3
4 Focus Group Findings 94% of employees have an ongoing relationship with a primary care physician (PCP). 88% have a very positive opinion of their PCP (patients with a strong relationship with their PCP are reluctant to change). If the clinic sought to be a replacement to primary care, it would likely be met with resistance. Participants had a good understanding of the role a PCP should play in a person s overall health and health care, suggesting they were not simply expressing a positive opinion as a way to communicate a subliminal message concerning the clinic. Cut a path, leave a trail 4
5 Focus Group Findings When asked if they would consider using an onsite clinic, 83% said they would try, 13% said they would not, and 4% were not sure or could not answer. This suggests somewhat strong interest in an onsite clinic. When probed, the interest was focused on urgent care services (episodic care) as opposed to a replacement to primary care. When asked about concerns with using an onsite clinic, many employees (particularly teachers) have significant privacy concerns. They believe that the employer has no business knowing about the personal health of employees and that the organization would gain access to the information and use it in employment decisions. Cost to utilize the clinic will impact participant interest. Cut a path, leave a trail 5
6 Focus Group Findings Provider qualifications and how they relate to patients is more important than gender or age. Offering services to dependent children was viewed as a plus. The clinics should be located in three locations throughout Brevard County (north, central and south) with easy access from I-95. Employees were agreeable with a phased approach of opening the first clinic in the central area with clear communication of additional locations in the near future. There was a difference of opinion concerning hours of operation, but the majority favored an approach that would split the day between a four hour shift early in the morning and another four hour shift later in the day (particularly important for teachers). Trading a week day for Saturday was viewed as a reasonable trade-off with mid-day as the preferred time. Cut a path, leave a trail 6
7 Assessing the Economic Opportunity Primary drivers for considering an onsite clinic: Positive impact on cost Focus on how a clinic might moderate future trends Many times, employers are reluctant to make a short-term investment in an onsite clinic in return for the hope of lower costs long-term. Willis evaluates the statistical assessment of immediate gains (objective) along with the potential for longer term cost avoidance (subjective). Cut a path, leave a trail 7
8 Assessing the Economic Opportunity Cost of clinic operation is variable. RFP process and scope of services would assist in determining actual cost. Reasonable cost estimate of operating a clinic (net of real estate) is $500,000 to $600,000 annually per site. Estimated operational cost of the clinic (net of real estate) is covered if 20% of specific services paid under the health plan in 2014 and 2015 were moved to an onsite clinic. Cut a path, leave a trail 8
9 Assessing the Economic Opportunity Estimated Cost Avoidance Opportunity Capture Rate Cost Avoidance Forecast Medical Cost Avoidance Forecast Rx Cost Avoidance Forecast Occupational Health Services Annual Biometric Screening Total Opportunity Year 1 $1,665,781 $283,074 $27,420 $55,000 $2,031,275 Year 2 $2,869,739 $283,074 $27,420 $55,000 $3,235,233 Year 3 $4,135,549 $283,074 $27,420 $55,000 $4,501,043 Total $9,767,550 Medical Cost Avoidance Forecast was based on migrating ER, urgent care and office visits to the onsite clinic (20%, 30% and 40% migrations used in Year 1, 2 and 3 respectively) and utilization reductions. Rx Cost Avoidance Forecast was based on a 2% reduction in cost. Occupational Health Services include DOT yearly physicals, drug screenings (new hires and accidents) and physical ability testing. Annual screenings for biometrics and flu shots moved to the clinic. Cut a path, leave a trail 9
10 Assessing the Economic Opportunity Generally it is ill-advised to have a clinic provide Worker's Compensation related services due to mixing HIPPA and non- HIPAA related benefits. This was not a concern for BPS as the focus groups showed little concern over this issue with respect to some occupational health services. DOT annual physicals, drug screenings (new hires and accidents) and physical ability tests could provide a cost reduction of approximately $27,420 annually if performed by the clinic. Occupation Health Services Service Total Count Capture Rate Services Moved Cost Reduction Amounts at Clinic Est.2014/2015 Paid Totals DOT Yearly Physicals % 527 $12,648 $31,620 Drug Screenings (New Hires & Accidents % 1107 $11,068 $27,669 Physical Ability Testing % 152 $3,704 $9,260 Totals 1,786 1,786 $27,420 $68,549 Cut a path, leave a trail 10
11 Assessing the Economic Opportunity Transferring the screening-related services to the clinics would save an additional $55,143 annually through the clinic. Screening Related Health Services Total Count Capture Rate Services Moved Cost Reduction Amounts at Clinic 2014 Paid Totals Biometric Screenings 5, % 5,424 $38,583 $97,632 Flu Shots 2, % 2,300 $16,560 $41,400 Overall Totals $55,143 $139,032 There are opportunities to control substitute teacher costs, unscheduled absences and paid time off. Although these are difficult to quantify from a financial perspective, they are clearly benefits which would result from an onsite clinic. Cut a path, leave a trail 11
12 Recommendations Based on the preliminary analysis, it appears that the cost reductions associated with establishing clinics will cover the cost, but not likely provide immediate savings. If appropriately structured, managed and implemented, an onsite clinic may produce longer-term cost benefits via the reduction of chronic disease which further supports the investment. Another important issue to consider is how the health care system is evolving. Much evidence supports the emergence of a shortage of primary care physicians. The clinic can play a vital role in addressing the shortage as it grows in the future. Cut a path, leave a trail 12
13 Recommendations Keys to long-term success Address employee concerns particularly, with respect to privacy. Clinic should complement the current health care delivery system and fill the care gap. Opportunity to ensure that employees understand and operationalize the treatment instructions provided by their primary care doctor. The key to controlling cost is getting people to take action to either address or prevent health conditions from worsening. Improved health and well-being and high quality care will result in lower cost and reduced medical trend over the long term. Everyone benefits Cut a path, leave a trail 13
14 Next Steps Clearly articulate employee concerns and how to best address them so that they are incorporated into the RFP process. Finalize the scope of clinic services, measurable objectives for the clinic, and how success will be measured. Work with Willis to finalize and distribute the RFP and evaluate responses to make a final decision regarding an onsite clinic. If appropriate, select the best vendor and implement the clinic. Monitor performance against objectives and fine-tune to address future opportunities to improve health outcomes and mitigate cost trends. Cut a path, leave a trail 14
15 Cut a path, leave a trail 15
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