Companies offering on-site health care

Like so many other companies, Cardone Industries Inc. in Northeast Philadelphia was struggling with the cost of its workers' health care.

Too many of its 4,000 employees, a melting pot of immigrants from dozens of countries, lacked primary-care doctors. Rather than deal with problems early, they'd wait until they were really sick, then head for emergency rooms, the priciest place to get health care. On top of that, a small but growing number of workers was turning down the company's health insurance plan because it was too expensive.

In response, Cardone is trying a new twist on an old approach to employee health that is quickly gaining popularity among large employers around the country.

It's bringing back the company doctor.

"It's an old concept that's making a new beginning," said Jeff Eck, director of benefits for Cardone, which rebuilds auto parts.

Cardone and Holy Redeemer Health System earlier this month broke ground on a 2,500-square-foot health center for Cardone employees and their families that will be staffed by Holy Redeemer doctors. Workers who use the center will have a lower insurance co-payment. And, those who sign up for Cardone's new Exclusive Provider Organization (EPO), which largely restricts them to Holy Redeemer doctors, will pay less for their insurance.

While many manufacturers historically had doctors or nurses around to treat injuries or give drug tests, the Cardone center follows a new template that offers work-site primary care plus preventive services such as vaccines, health screenings, and weight-loss counseling. Employers see the centers as an attractive perk for employees, but also a way to increase worker productivity and hold down health costs by treating problems early and efficiently.

Pharmacy giant Walgreen Co. has a new division based in Conshohocken that is creating a web of health centers in its drugstores and at work sites. Clients include about 30 financial firms on Wall Street, Harrah's Entertainment Inc., Horizon Blue Cross Blue Shield of New Jersey, and Toyota Motor Corp. Beginning in October, the division will operate a 15,000-square-foot health center for Disney World employees.

In Gillette, Wyo., three energy companies are creating an 8,400-square-foot health center with 15 staff members for their workers, dependents and retirees. It is set to open Sept. 16.

Through the acquisition of other companies this year, Walgreen's now has about 400 work-site clinics. It plans to open 100 to 150 more a year, said Hal Rosenbluth, president of the Health and Wellness division. "This opens up a whole new group of customers to Walgreen's," he said.

Johns Hopkins runs about 50 clinics, most of them staffed by nurse practitioners and physician assistants, at seven large national companies, including PepsiCo Inc. and Hughes Electronics Inc. "It's a great way to deliver medicine, particularly preventive medicine," said Edward Bernacki, a doctor who runs Hopkins' division of occupational medicine.

"Every day we're getting calls from other multinational companies that see an on-site clinic as a way to offset some of their health costs."

On the downside, the centers raise privacy concerns. How much, after all, do you want your boss to know about your infirmities or unhealthy lifestyle? That is one reason companies hire outside firms to provide health care. The centers, they say, are bound by the same privacy rules as any other health provider.

Kelly Stigelman, a union officer at Cardone, said only a handful of employees had asked about privacy at the new center, which is expected to open early next year. Most are reassured because the center staff will work for Holy Redeemer, not Cardone.

A survey released this year by Watson Wyatt Worldwide Inc., a human resources consulting firm, and the National Business Group on Health found that 29 percent of large employers had an on-site health center or planned to open one by 2009, up from 27 percent in 2006. The study faulted the companies for failing to analyze how the health centers were affecting spending.

In the survey, companies with on-site centers said they were interested primarily in improving productivity and saving money. Center operators say they can reduce absenteeism, both from sickness and from long trips to the doctor's office in the middle of a workday. They can save money by preventing serious illnesses and reducing emergency room visits.

Lale Iskarpatyoti, group and health-care practice leader for Watson Wyatt in Philadelphia, said the work-site center trend had picked up in the last four or five years.

An emphasis on wellness can save money, she said, because 40 percent to 50 percent of health-care costs are related to preventable problems.

While the on-site centers can work for companies with as few as 500 employees in one place, they typically serve at least 1,000. You need 2,500 to 5,000 employees for a pharmacy to make sense, Iskarpatyoti said.

Toyota opened an ambitious center for its employees in San Antonio, Texas, in January 2007. Two doctors and a nurse practitioner provide primary care. There is also dentistry, X-rays, optometry, physical therapy, and a pharmacy that fills 150 prescriptions a day. It has been so successful that Toyota is now opening smaller clinics at two other locations, said Ford Brewer, Toyota's medical director in North America.

Toyota paired the San Antonio center, which now provides half the primary care to 4,000 employees, on-site suppliers and their families, with a restricted network of hospitals and specialists who scored in the top 25 percent on quality ratings. In exchange for having fewer competitors, the hospitals and specialists gave Toyota a 20 percent price break.

Toyota is saving money on the whole package, but not on the health center itself. "The goal and the projection was not to save money on primary care. You actually do spend more money on primary care," Brewer said.

The savings come, he said, from the specialty price cuts and from better primary care.

In this region, Harrah's offers a health and wellness center for 21,500 workers and dependents from its four casinos in Atlantic City. Located in the Showboat Casino and Hotel, the center looks like any modern doctor's office. It has six exam rooms and is staffed by three doctors, four nurse practitioners, a physician assistant, and four registered nurses. Patients can get X-rays, diet counseling, physical therapy and many medications on the spot. There is a well-stocked fitness center next door. Employees get cash incentives to participate in wellness activities.

Center staff members said they took pride in offering prompt appointments - the next day for a Pap test, for example - and good service.

Use of the center has been rising. It now sees about 65 people a day. One day last week, Carmen Filippello, a 60-year-old supervisor on the casino floor, was in to have her asthma checked out. She and her husband, who also works for Harrah's, both use the center for primary care.

"I think they're taking excellent care of me," she said. "The doctors here are phenomenal. I just love that everything's here."

Cardone's Eck said he thought his company's clinic would be a hit because 70 percent of Cardone's employees live within five miles of its main plant. That kind of geographic concentration also makes a health network restricted to one hospital - employees who choose the EPO are supposed to use Holy Redeemer if it offers the care they need - workable.

Mike Laign, Holy Redeemer's chief executive officer, said he thought the employee center had broader promise, but wanted to see how things went at Cardone before trying it elsewhere. "We think this is a model that definitely warrants further development in the market," he said.