Take costly and unnecessary emergency room visits. Cecily Hall, Microsoft’s director of U.S. benefits, noticed employees and dependents were spending twice the amount of time in the emergency room than the national average for a company like Microsoft, which covers 125,000 people in the United States. According to a Watson Wyatt Worldwide analysis of claims data from large employers, 142 people under the age of 65 use the emergency room annually per one thousand enrollees in a company health plan.
Hall says the company’s health care costs were going up because of unnecessary emergency room visits. "Our enrollees were making ill-informed decisions," she says.
The problem was not that employees were accident prone but that sick employees were using the emergency room doctors as proxies for when their own doctor’s office was closed or booked. The company had set up a nurse line to help employees figure out if they needed an ER even as it cautioned them not to use it unnecessarily, but with little success.
Hoping to solve the problem without simply making employees pay more to use the emergency room, Hall turned to Seattle-based Carena to launch a service that offers a cadre of physicians who makes house calls to sick employees and their dependents 24 hours a day.
Doctor house calls have gained popularity in recent years, spurred by an increase in the reimbursement rate for home health visits from Medicare and Medicaid (a recognition, in part, that house calls save money when compared with emergency room visits), technology that makes it easy to transport a doctor’s equipment and dissatisfaction with the rushed atmosphere of a doctor’s office.
But most of this business is relegated to those Medicare and Medicaid recipients and to the wealthy—they are willing to pay a few hundred dollars out of pocket for the extra attention and convenience of a bedside doctor.
Now companies like Carena, which has just begun offering house call services in Seattle and San Francisco, are seeing opportunity with large employers. Since large employers pay for the cost of health care their employees use, they can tailor their health plan to meet employee needs and habits. House calls and office calls by doctors may be one tool to reduce unnecessary and costly emergency room visits. House calls also allow employees to get medical care at times when primary care physicians are unavailable. They see doctors in the comfort of their own homes and have up to an hour with them. The visit is a fraction of the cost of an emergency room visit.
"We see our job as filling a gap," says Ralph Derrickson, chief executive of Carena. "The lack of availability of a primary care physician is what we are trying to fix. And we don’t want to fix it with a trip to the emergency room, but with family practice medicine."
Last year, Microsoft, which would not disclose how much it spends on health benefits, began a pilot project with 7,000 health plan members and has since made it available to all of its health plan members in the Seattle area—80,000 people in all.
Derrickson says Carena charges employers only when members use the service, which costs about 25 percent less than an average emergency room visit. The transaction is like any other doctor’s visit: The patient pays a co-pay and the employer’s third-party administrator handles the billing like any other charge from a doctor’s office.
Watson Wyatt estimates the average emergency room visit costs $528, including lab fees.
In New York City, where some employers have unsuccessfully tried to find cheaper alternatives to the emergency room, another medical service is making the rounds. Sickday Medical House Calls, launched in December, offers phyisican associates (who provide much of the same care as physicians and are authorized to prescribe drugs) between 6 a.m. and 11 p.m. The company’s founder, Naomi Friedman, began making house calls several years ago out of a desire to spend more time with patients, some of whom were HR executives.
"They all said that as soon as I am ready to provide it to their employees, I should let them know," Freidman says.
Friedman is developing contracts with a number of banks and other New York-based corporations but would not disclose names of clients. Unlike Carena, Sickday bills patients directly—a flat fee of $250 "whether it’s 30 minutes or two hours," she says. Patients must then get reimbursed through their insurers as if they went to an out-of-network physician. Those with high-deductible plans would save money as well.
"It does not cost the employer anything," she says. In the past few months, the most common ailments Friedman has treated include a lot of gastroenteritis, bronchitis, nausea, vomiting and strep throat.
Sickday and Carena medical providers usually arrive within an hour. They are outfitted with a bag (goodbye black satchel, hello backpack and bags with wheels) filled with everything you might find at your family practitioner—stethoscope, laceration kits, gauze, bandages and so forth—plus a laptop or PDA that doctors use to create an electronic medical record. Unlike the 10 to 15 minutes most doctors spend with patients, these doctors usually spend about an hour, Friedman and Derrickson say.
Carena doctors are all family practitioners who are familiar with Microsoft’s benefits and can recommend programs for employees to get involved with. The doctors also direct patients to follow-up visits with their primary care doctors.
"Because they’re in the home for upwards of one hour, they are also great ambassadors for me and my team to talk to the family about other programs and plans available through Microsoft to help the patient and the family," Hall says.
Microsoft has not yet formally analyzed its cost savings, but Hall says the company plans to save several million dollars annually. What Hall does know is that "there is certainly more goodwill from our employees and the medical community."