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Local Governments Cut Health-Care Costs With Free On-Site Health Clinics for City Workers

Lakeland, Fla., provides basic medical services to city workers and saves $1 million by reducing insurance claims.

by / July 20, 2010
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For years, officials in Lakeland, Fla., had no effective remedy for the pain caused to city workers by rising health-care costs. They tried raising premiums, increasing deductibles and many other cost-shifting methods to ease the financial pressure. Nothing worked.

"It became apparent that this wasn't the way to address the root cause," said Karen Lukhaub, the city's director of risk management and purchasing.

Four years ago, after much debate, Lakeland set out to open an in-house health clinic for city workers and found Healthstat Inc. For space, they didn't need to look farther than the centrally located risk management-civil service building, where facility maintenance crews gutted a civil service conference room to install medical examining tables and electrocardiogram machines.

In 2007, Lakeland opened the employee on-site wellness clinic, where city workers can get basic medical services for free. In its first year, Lukhaub said, the program saved the city $1 million.

"We save in overall reduction of medical costs and insurance claims," she said. "In order to participate, you have to be covered under the city health plan, but it costs zero dollars out of pocket and no vacation time."

Given the current economic conditions, it's no surprise that this in-house health clinic concept has become contagious among local governments. From New Hanover County, N.C., to Manatee County, Fla., more local agencies have discovered on-site wellness facilities as a solution for skyrocketing health-care costs.

"Three years ago, we had maybe three municipal clients," said Susan Kinzler, executive vice president of sales and marketing for Healthstat, which has about 100 clients. "Now 15 percent of our clients are government-based entities."

With the latest advances in technology, local officials can provide medical services in ways that would have been too costly decades ago. And with access to electronic medical records, physicians can identify gaps in care and address health risks before they become serious problems.

A Healthy Solution

How does the on-site heath clinic work? A government agency pays a medical company to run a clinic, which is typically situated in a government building, and the contracted company pays the salary of the local medical staff (physicians, nurse practitioners or physician assistants). City workers can go to the clinic for episodic and wellness care without paying a deductible
or co-pay.

"When we first opened the clinic, we determined that 50 percent of our employees had no doctor, couldn't afford the deductible and couldn't take time off of work," Lukhaub said. "The focus is really to provide them with an avenue that is easily accessible and doesn't cost them anything."

But it starts with a test. To participate in the Healthstat Program, city workers must first complete a Health Risk Assessment and comply with the Wellness Outreach Program recommendations for visits to the clinic. Assessment information goes into a computer to establish a baseline and identify the individual's top risk factors, Lukhaub said. With supervisor approval, employees also can receive episodic care during work hours for minor strains, colds, earaches and so forth. The clinic also handles annual firefighter and pre-employment physicals, and workers' compensation injuries.

"Clinicians do not count themselves as replacing primary care doctors or specialists," Lukhaub said. "We see the clinic as a facilitator between our employees and medical facilities."

Assessing Security

As the operator of 300 clinics countrywide, Healthstat has seen similar stories as local governments moved to the central health clinic model. Not only does the on-site health clinic help cities save money by reducing insurance claims, Kinzler said, but it also helps employees stay healthy, which keeps them more efficient in the workplace.

"We get the costs down by improving the employee's health," Kinzler said, adding that by following the formula, results have shown reductions in blood pressure and diabetics'

blood-sugar levels.

Predictive modeling software identifies patients who are at risk for certain conditions, according to Ron Schroll, CIO of Healthstat. "Using the data, we can use software to predict what an employee's costs may be in the future," he said. "This year, they may not be at risk, but next year they may be a candidate for becoming diabetic or asthmatic. We reach out to those people and get them seeking the treatment they may
potentially need."

With servers hosted at Healthstat's corporate office in Charlotte, N.C., all records are kept confidential in a virtual private network, Lukhaub said. No medical records are kept on laptops at the on-site clinic, and regular audits by outside firms ensure that clinics adhere to proper security protocols.

Regardless, employees should make sure they understand their relationship with an on-site clinic and a vendor, said Barbara Ryland of Crowell & Moring, which handles Health Insurance Portability and Accountability Act (HIPAA) matters.

"If it's run by an outside entity, depending on the contract, it may be misleading to the employee if the employer is the one maintaining the records," she said.

To avoid ambiguity, Ryland recommends that employees ask questions such as whether the clinic is HIPAA covered and if medical records will be kept confidential from
an employer.

"You should know that before you go in and get services," she said. "There needs to be a certain amount of clarity so there's no confusion."

Overall Wellness

After realizing that traditional case management and telephonic disease management no longer worked, Manatee County, Fla., officials created the Center for Health and Lifestyle Management, an integrated, in-house approach to health management.

"We can afford this cost because we've reduced the cost of customer service and claims adjudication by about 50 percent," said Bob Goodman, the county's health benefits manager. "We manage the center internally with selected vendors providing their professional staff full time under my supervision."

The county, Goodman said, is implementing personal health records, which will be attached to claims, plans and prescriptions. Advocates and coaches can soon view information on Web-based charts. He added that new technology uses logarithms to identify appropriate care for specified conditions.

But Goodman doesn't call the center a clinic. He believes the center invests heavily into an individual's behavior and lifestyle as a form of preventive care, whereas a clinic only handles people who get sick.

"A clinic is just a temporary fix," he said. "We integrate behavior, advocacy and coaching for people to improve outcomes. The center addresses the total health-care issues of an individual to reduce sick care."

Photo courtesy of the Risk Management and Purchasing Department, Lakeland, Fla.

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Russell Nichols Staff Writer
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