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13 Questions to Ask On-Site Clinic Vendors

February 24, 2010

Thinking about opening a primary care clinic at your business site? Many organizations are.

Work-site medical clinics are catching on as employers discover they can save significant dollars and improve the care for their employees and families. Clinic vendors’ medical management and business models vary dramatically, however, and, as a result, so do their impacts on cost and quality.

Though on-site clinics have been around for more than 25 years, the designs have evolved. Some older clinic vendors offer elaborately expensive facilities with conventional doctor office arrangements, which makes it difficult to deliver savings. By contrast, contemporary vendors are more likely to heavily invest in tools and programs, creating comprehensive medical management platforms.

Demand for work-site primary care clinics is a response to the failure of medical providers and health plans to cost-effectively manage and improve the health of patients. By bringing a clinic to the work site, the employer offers the clinician a deal. The employer pays more than the doctor or nurse can typically make in private practice, with conditions very different than the gerbil-on-a-wheel circumstances in which many primary care clinicians now practice.

In better clinics, the doctor or nurse sees fewer patients and spends more time with each one. There are state-of-the-art electronic health records and clinical-decision-support tools. But best of all, the primary care clinician has the authority to reach out to and collaborate with specialists on each referred patient’s care, acting not simply as a “gatekeeper,” but as the patient’s advocate and guide. In exchange, employers obtain healthier employees and families at lower cost.

How can you evaluate which clinics are the best? Here are some questions and rationales to help identify clinic vendors that are most likely to provide the best possible experience, quality improvement and savings.

1. Is the clinic led by a primary care physician or a nurse practitioner? Primary care physicians cost more and nurse practitioners can be very effective, but here are two cold truths. First, specialists are more likely to collaborate with physicians, facilitating coordination of care. Second, if a key clinic goal is creating what’s called a “medical home” and moving the locus of control inside the clinic, a clinic physician can supplant the health-plan network doctor. A nurse practitioner, on the other hand, is only likely to supplement the care provided by the health plan’s primary care physician. In the end, the extra investment for a physician-led clinic will pay itself back many times over. And most well-configured physician-led clinics still make very effective use of nurse practitioners.

2. Are the lead clinicians encouraged to collaborate with specialists? Do they have the authority to do so? One of managed care’s mistakes was relegating primary care physicians to gatekeepers. Specialists have a financial incentive to provide unnecessary care services to referred patients, so it is important to urge primary care physicians to reach out to specialists and insist that they manage the patient collaboratively. Of course, as the referring physician, the primary care physician carries a veiled threat that a refusal to work together will end the referral stream. Some vendors have seen dramatic drops in specialty utilization as a result of this approach. Ask each clinic vendor how specialty referrals are handled.

3. Who manages the clinic’s clinical and business functions? Believe it or not, some clinics are managed by health insurance brokers with no clinical background. Are experienced clinicians overseeing the clinic’s medical management functions? Are experienced clinical operations professionals managing the clinic’s business processes? What mechanisms are in place to ensure consistent quality across the clinic vendor’s enterprise?

4. Does the vendor mark up products and services, or simply pass through the documented costs of the clinic and charge a management fee? A big driver of excessive health care cost is fee-for-service reimbursement—payment for each product and service. This kind of reimbursement encourages more care, independent of whether it’s the right care. Clinic vendors that profit from every service have an incentive to provide as many services as possible. The alternative approach has the client pay exactly what it costs to run the clinic—for staff time, drugs, labs and office supplies—and then pay a separate management fee. This approach discourages the provision of unnecessary care or the denial of necessary care.

5. Do the clinic’s owners have financial conflicts of interest? Clinics owned by hospitals, for example, may have an incentive to send patients to their hospitals to fill their beds and diagnostic slots. This is why they purchase primary care physicians’ practices: to serve as feeders. Unless they represent other interests, such as pharmacies or laboratories, independently owned clinics are not financially conflicted in this way.

6. Do employees and their family members have to pay to use the clinic? Employers invest in inexpensive primary care as a way of warding off expensive specialties and inpatient settings. If the clinic’s goal is high participation, then it makes sense to lower or eliminate patient fees. Clinics with free visits—as well as free standard drugs and laboratory tests—develop higher participation. This has a greater impact on lowering health care costs later. Make it easy for employees and their families to receive preventive services, and you’ll eliminate both higher rates of specialty referrals and escalating problems that may result in expensive emergency visits later. Sure, some executives may sniff and say that they would only go to their own private physician, but free care is a no-brainer for most working families.

7. Are on-site face-to-face disease management, wellness and prevention services available? Two-thirds of most employers’ health expenditures come from lifestyle-related chronic disease such as diabetes, hypertension and asthma. A decade of in-the-field disease management experience and literature have shown that call-center approaches are mostly ineffective. What works, instead, are repeated, face-to-face interactions with a clinician whom the patient trusts. Effective clinics will have a nurse on site who works with chronically ill patients and provides routine wellness/prevention education and support in smoking cessation, cooking and nutrition education, and fitness.

8. Does the clinic have Web-based health information technologies? End-to-end health information technologies are necessary to optimally manage patient and employee care. These technologies should include analytical tools to identify patients with chronic disease and those who are likely to have a major acute condition within the next year. Care-gap analysis and other clinical-decision-support tools help physicians deliver the right care at the right time. Patients should be able to make appointments online and get access to their personal health records so they can become more engaged with their care. Electronic health records track patient information and let the organization measure the achievement of targets, so you can understand whether the clinic is improving care quality for your group. Clients’ claims, drug and lab data can be merged with electronic health record data to provide a more complete picture of the patient’s experience, and to allow an understanding of the clinic’s impact on the full continuum of care. All these capabilities should be Web-based, rather than relying on old-fashioned client-server technologies. Web-based tools cost significantly less and are more effective.

9. Does the clinic provide both personal (i.e., group) health and occupational health services? A clinic requires significant infrastructure. But once implemented, it can work for both personal and occupational health issues. This is significant, because occupational health services include five major areas that are worth two to three times the value of the group health premium. These are workers’ compensation primary care, lost work time, disability management, the clinic’s value in the retention and recruitment of employees and the ability to do on-site human resources testing (such as drug screens and Department of Transportation exams). Of course, allowing the clinic to perform double duty requires some additional process and cost, but the greater investment is dwarfed by the potential impact for savings.

10. Is the employer indemnified against medical liability? Clinicians should carry medical malpractice insurance, of course. But the vendor should also carry medical malpractice coverage on all of its clinicians. Vendors that simply expect their clinicians to buy their own coverage add an unnecessary layer of risk: What if a clinician allows a lapse in his coverage? In the end, you should expect to be indemnified to the greatest degree possible. The buck should stop with your vendor.

11. Has personal health information been made private and secure? No employer wants to learn that personal health information has been compromised. Ask for detailed, audited proof that the vendor has secured all privacy- and security-related processes.

12. Are the vendor’s reports complete and transparent? How is the vendor accountable to you? Ask to see the vendor’s reports on clinic use, cost, quality and financial impact. Is supporting documentation available? All costs and relationships involved in bringing the clinic’s operations to fruition should be visible to you. All analytical methods should be transparent, so the client can easily understand how measurement values were derived. Past behavior is the best predictor of future performance.

13. Can the vendor supply testimonials and solid data on past performance? Many vendors have heartwarming stories and claims of effectiveness, but when pressed, they can’t actually show that they save money. To produce consistent return on investment and quality improvements, there must be a careful balance of streamlined operations, effective medical management and continual focus on value. Don’t take the vendors’ word for it. Demand clients’ reviews and actual clinic performance data, not speculative projections extrapolated from average savings reported in the literature.

On-site clinics are a transformational trend in American health care because they create closed systems with revised rules for care management and reimbursement. Properly configured, clinics can cut 15 percent or more from a group’s total health care expenditure, net of the clinic’s cost. But on-site clinics need to be understood as complex machines, comprising a variety of mechanisms that aspire to the right result for the patient and the purchaser every time. By asking careful questions about these approaches upfront and demanding straightforward answers, you can avoid regrets later.

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