I’ve been spending a good deal of time examining the growing trend in medical tourism – Americans seeking medical care in far-off lands. The motivation is primarily cost; procedures can be less than half the cost overseas compared to US prices.
Other employers are contracting directly with providers, eliminating the health plan “middle men”.
Another option for employers seeking to gain more control over health care is via in-house clinics.
I posted on Manatee County’s innovative clinic-based approach over a year ago; since then several other employers have decided to build clinics on-site. The latest employer to “in-house” is Toyota.
The big auto company is building a $9 million medical center/clinic in its San Antonio TX plant that will employ up to seven physicians to care for the 4100 workers and their families around the plant. And this is not just occupational health. Dental, pediatrics, vision care, and physical therapy will all be provided on-site.
Employees can seek care outside the clinic, but they will have to pay more in the form of higher copays. While there are some concerns about employee privacy, my sense is the convenience and cost factors will win over most workers.
I’d also predict that Toyota’s next step will be to contract directly with selected providers in the area, thereby capturing the best deal possible and the most control over health care quality and costs.
No wonder they’re beating the pants off US auto companies.
Re: Insourcing of primary health care
A surprisingly large number of the largest US employers have managed general primary-care clinics (i.e., not limited to occupational medicine) at or near their worksites, for the past 15 years or more. Most of these clinics have been creative outgrowths of occupational medical resources, and most include an on-site pharmacy. Recall that railroads were among the pioneers of US-employer-provided medical care in the 19th century and many of them still operated proprietary hospital systems well into the 1970’s.
I note the Toyota clinic will be operated by CHD Meridian, whose predecessor CHD was one of the firms I worked with extensively in the early/mid 1990’s while consulting with employers on this concept.
While the concept is simple, making the actual commitment involves a lot of analysis and can be difficult because the management of a medical facility exposes the sponsoring company to new legal risks, new kinds of employee-relations issues, and involves general business opportunity costs. There is also the unpredictability of negotiating arrangements with specialists and hospitals – while number of participants is not the only factor, “critical mass” is quite important, and even the largest companies do not have the negotiating power that most insurance companies have in a community (e.g., Toyota expects to have 4,100 workers and their families in San Antonio, an MSG that contains about 1,700,000 people). Not only that, the hospitals are quite experienced in medical price negotiations, the employers are usually not. So negotiations can be unpredictable. The economic and social benefits must be reasonably sure and significant for a given company to proceed with likelihood of success.
You mention two essential employee-relations factors – privacy and convenience. There is another – the presence of labor unions and their inclination to go along.
All of these factors are manageable in general, although in practice there is no general answer and each company must reach its own feasibility decision.
It’s an interesting subject that bears continued watching.