Cost-Effectiveness Analysis of a Worksite Clinic

This study assessed the cost-effectiveness of a worksite clinic. In-house clinic operational costs were compared to off-site (i.e., community) health care costs during a 1-year time frame. Community cost norms were extracted from statewide databases and adjusted to local costs. Lost productivity costs were based on survey feedback from current clinic users, which included their estimated time away from work if they had to seek health care off-site, average hourly wages, and the number of actual treatments rendered by the on-site staff. Combined off-site costs of $224,461 (health care) and $113,883 (lost productivity) were nearly twice as high as actual on-site operational costs ($171,332). Overall, it appears the organization’s worksite clinic provides employee health care services 2 to 3 times more cost-effectively than do off-site health care services. With the advent of higher health care costs and productivity concerns growing at more worksites in the past decade, an increasing number of companies are developing in-house clinics (Reynolds, 2005). These clinics exist in both mid-sized organizations such as Southwire Corporation (Carrollton, GA), New Holland Corporation (New Holland, PA), and Quad/Graphics (Lomira, WI) and large organizations such as Eastman Kodak (Rochester, NY), Perdue Farms (Horsham, PA), SAS Institute (Cary, NC), General Electric (GE) Company (Fairfield, CT), and Eli Lilly Company (Indianapolis, IN) (Adcock, 2005; Pachman, Stempien, Milles, & O’Neill, 1996; Tselikis, 1999). According to some of these companies, on-site clinics make sense in terms of both cost-containment and quality of health care provided to their employees (Gemignani, 1998). For example, an external audit of Lilly’s onsite clinics found that employees used fewer outpatient and inpatient services when adjusted for age, gender, and other demographics, than their peers in the community. Moreover, Lilly’s database showed the costs to operate the clinic are much less than what the health plan would have been paying if employees used community health care providers (Tselikis, 1999). In a similar vein, Quad/Graphic’s health care costs have risen just 6% annually during the past 4 years. On-site occupational health administrators credit this remarkable statistic, in part, to the clinic staff’s ability to treat minor ailments before they progress to chronic and more expensive conditions. This cost containment resulted in Quad/Graphic’s health care spending rate being 17% lower than the industry average. At software maker SAS Institute, on-site clinics saved the company $1 million in 2000, according to the initial cost analysis (Shook, 2002). A more recent cost analysis of the company’s clinic showed the initial cost savings have been sustained during the past few years (Adcock, 2005). Like many organizations, Syngenta Crop Protection, Inc. funds its own employee health insurance plan. It has had an in-house clinic since 1973. The clinic serves employees only and operates during standard business hours. Clinic staff treat acute and chronic non-occupational and occupational illnesses and conditions. Employees’ clinic records are handled according to the Health Insurance Portability and Accountability Act (U.S. Department of Health and Human Services, 2005) regulations and kept in separate folders apart ABOUT THE AUTHORS Dr. Chenoweth is President, Chenoweth & Associates, Inc., and Professor, Worksite Health Promotion, East Carolina University, Greenville, NC. Ms. Garrett is Health Services Manager, Syngenta Crop Protection, Inc., Greensboro, NC.