Company Health Clinics are Back

Through Marginal Revolution comes this NYT story about on-site company health clinics. Years ago, when I worked for Scott Paper, we had a company clinic and I was told that when Al Dunlap came on the scene (I left shortly before) he took one look at it, declared that he wasn’t running a hospital, and fired everyone involved. That clinic was a remnant of days gone by and Dunlap was following the conventional wisdom of the day when he shut it down. There are new forces at work now, however. As the Times says:

Today a new wave of clinics is opening, driven largely by a motive that was less of a factor in the past: employers’ desires to reduce their health insurance premiums by taking care of workers before they need to see outside doctors. More than 100 of the nation’s 1,000 largest employers now offer on-site primary care or preventive health services — a number forecast to exceed 250 by the end of the year, according to David Beech, a health benefits consultant.

These are full out clinics with some even maintaining a small pharmacy.

That clinic at Scott was awfully convenient. I didn’t have to worry about making an appointment, taking time off to see a doctor, and then trying to remember to get a prescription filled. I actually went to see a doctor when I was sick, and received treatment. Now, I see a doctor perhaps once every two years. I know that my self diagnosis is correct 95% of the time and there is no reason to miss work to have it confirmed. I try to get the doctor to call in a prescription if I bother calling at all. As a result, when I’m sick, I stay sick longer and am more likely to infect my co-workers. What’s worse, though, is that I gamble that I know what’s wrong. I gamble that my current illness doesn’t fall into the 5% that I’ll misdiagnose and I further gamble that if it is misdiagnosed it isn’t serious. If I had a clinic available to me a short indoor walk away, I would rarely take those chances.

So, I think this is a good deal for employees, but what about employers? Some benefits to an employer seem obvious – less missed time for sickness or doctor’s appointments, a healthier workforce, and fewer small health problems growing into large health problems due to a lack of treatment. The Times article also provides claims that companies can save some serious money with clinics. Nonetheless, the argument that these companies aren’t in business to “run hospitals” still seems powerful. The solution, though, appears obvious – outsource. Will that cut into savings? Sure, assuming the company would otherwise be a competent health clinic administrator (a not inconsequential assumption). The article names some firms providing this service in what looks like a high potential market. Done right, employees save time and hassle, employers get a healthier workforce, and clinic operators get a steady, well defined customer base.

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