More companies opening in-house clinics for employees to help reduce health costs

A "combination of both definable and intangible savings are driving more companies to open medical clinics to cope with ever-rising health care costs," the AP/Houston Chronicle reports.

According to the AP/Chronicle, savings for companies come from lower doctor fees in addition to improved worker health because the "clinic's proximity encourages employees to visit doctors and fosters better care of conditions that can be especially expensive to treat when ignored."

David Beech, a health care consultant at Watson Wyatt Worldwide, said companies with clinics find that their employees make one-third fewer visits to specialists and one-quarter fewer trips to urgent care centers.

A recent Watson Wyatt survey finds that 22% of large employers offer the in-house clinics and that another 5% are planning to offer the service by the end of 2007.

According to Evelyne Steward, vice president of Global Work/Life for Discovery Communications, Discovery paid about $200,000 to set up a clinic, which results in about $500,000 in savings annually, mainly because of lower doctors' costs.

A physical at a company clinic costs a company about $153, compared with a private doctor's visit at about $243.

James Hummer, president and CEO of Whole Health -- which specializes in operating such clinics -- said doctor costs are lower because the physicians do not have to pay for the office and staff or handle insurance claims.

In addition, companies save money because employees do not have to take time off to see the doctor, which boosts productivity.

However, some companies are reluctant to offer the on-site health service because it can be difficult to put a monetary value on saved time and prevented illnesses, Hummer said.

Beech said there is a "massive amount" of interest in company-owned clinics, adding, "This is a way for companies to have more of a direct impact on costs" (Agovino, AP/Houston Chronicle, 9/7).