Two-thirds of large employers say that they expect to expand the services they offer through on-site health clinics by 2018. Much of that growth is likely to come from offering pharmacy benefits and telemedicine. That’s according to a Towers Watson survey.
Dr. Allan Khoury, senior consultant to Towers Watson, said employers have shown a keen interest in growing pharmacy services at on-site health care centers. The reasons cited include employee access to prescription drugs, as well as medical compliance and medical and pharmacy spending.
Spending on prescription drugs last year reached a record $374 billion, an increase of 13 percent from 2013, according to America’s Health Insurance Plans.
Pharmacy spending is expected to rise steadily as costly drugs associated with “precision medicine” come to market. But even some drugs that were affordable several years ago are now out of reach or have gone up in price.
The price of multiple sclerosis drugs, for example, has increased five or sixfold over the past 20 years, according a recent study published in a medical trade journal.
The latest trends in on-site or “near-site” health care centers are included in Towers Watson’s 2015 Employers-Sponsored Health Care Centers Survey published last month.
The survey found that 35 percent of companies with on-site clinics offer telemedicine services, with another 12 percent planning to offer telemedicine in the next two years.
Experts see telemedicine as a way for employees to obtain professional medical advice in the evening and on weekends when primary care doctors aren’t available. Using telemedicine, nurses and doctors on duty help patients remotely using video feeds over the Internet.
The survey also found that, overall, 38 percent of large U.S. employers with on-site health clinics plan to add new centers over the next two years. The steady growth in on-site clinics is a sign that companies see them as a way to control health care spending.
Of employers that sponsor on-site or near-site health centers, 40 percent have two to five centers and 56 percent of employers have had outside health centers for over five years, the survey also found.
Khoury told InsuranceNewsNet that companies that already have clinics are likely to add them in the coming years. “If you have a worksite health center, you are thinking of (adding) another one,” he said.
Due to economies of scale, on-site clinics and wellness centers work best when companies employ more than 1,000 people. But over the past several years, national and regional health systems have been bidding to run the clinics on behalf of sponsoring companies, Khoury said.
He said national vendors are running more than six in 10 on-site health care centers and regional groups have also made gains into the marketplace recently. Nearly one in five health centers is run by a regional group.
Companies have been getting out of the business of running health care clinics because of malpractice liability and the logistical challenges of replacing nurses and doctors who leave on-site clinics for one reason or another.
Khoury said consolidation among doctors’ practices isn’t necessarily having an effect on the growth of on-site health systems, but large health systems are bidding to run these health centers.
Business models surrounding health centers also are changing. Internal Revenue Service rules around the use of health savings accounts are having a “huge bearing” on clinics, which charge employees at or near fair market value until employees reach their deductible.
Previously, on-site clinics provided services at no out-of-pocket cost to employees. “On-site health centers have to mimic what’s going on in communities,” Khoury said.
Thirty years ago, on-site clinics were free and companies were all too happy to provide them because the clinics combine convenience with an important medical benefit that attracts top talent.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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