Two years ago, SAS, a software company based in Cary, North Carolina, won an international award for best workplace. One look at photos of the company’s gymnasium, and it’s not hard to see why. No expense was spared, it seems, in its construction. The huge facility has a basketball court, a swimming pool, a tennis court and a weight room.
The company’s on-site clinic, staffed with doctors, counselors, physical therapists and dietitians, doesn't have the "wow" factor of the gym, but it pays off, too. A July 2015 study by Duke University researchers found that SAS employees and their families who took full advantage of the clinic had $200 less per person per year in healthcare claims.
For large employers, workplace clinics are shaping up to be a formidable asset. A survey by the National Business Group on Health, released serendipitously at the beginning of flu season, found that companies with on-site clinics for all or most of their employees fared considerably better on absenteeism than those without. They had fewer than five lost workdays per year, per employee. Companies that lacked such clinics had a whopping 20+ lost workdays per employee annually.
Survey respondents consisted of 107 large U.S. companies, 31 of them in the manufacturing sector. “It has traditionally been difficult to connect the availability of on-site health clinics with lower healthcare costs,” the accompanying report noted. “However, on-site clinics offer multiple benefits—better care, better access to care, increased productivity.”
Although the researchers didn't anticipate such a dramatic difference in absenteeism, “it makes sense,” says Karen Marlo, vice president of NBGH. With an on-site clinic, employees “don’t have to take time away from work to go out to see a doctor.”
Because the clinic is easy to get to, workers could also be more likely to see a doctor when they first show symptoms of an illness--so they get treated early in the course of the disease and it is less likely to progress. The survey, however, didn't delve into why on-site clinics result in lower absenteeism.
What Else Is Working
Other workplace practices that correlated with better productivity and reduced absenteeism included employee access to a fitness center and stay-at-work arrangements for employees on short-term disability.
Employers with a fitness program--either a fitness center on-site or a subsidized off-site gym membership--had 21% lower workers' comp costs and 16% lower short-term disability than those without.
Those with stay-at-work arrangements averaged 322 lost workdays per 100 employees, compared with 353 days at companies without. Stay-at-work programs allow employees to continue to work in either light-duty or transitional assignments while recovering.
“If someone becomes partially disabled and there’s a way you can make modifications so they can stay in their job, it keeps them connected to the company,” says Marlo.
Early Adopters
Manufacturers, whose workers have more on-the-job hazards than employees in other sectors, were among the first to adopt on-site clinics. In some cases, the clinics evolved from occupational health clinics to incorporate acute care. Of manufacturing companies that responded to the NBGH survey, 86% had on-site clinics, compared to 75% of healthcare companies, 50% of technology companies, and 29% of financial services firms.
The survey did not collect data around the cost of on-site clinics, “but anecdotally, I’ve talked to employers—and compared to what they pay in their claims, they have not found their onsite clinics to be a substantial cost,” says Marlo.
Cadillac Costs
The cost of on-site clinics, however, may be a concern for employers going forward. The federal government plans to include the amount a company spends on such clinics in its calculations for the forthcoming Cadillac Tax. The tax, which goes into effect in 2018, is a 40% excise tax levied on companies paying in excess of $10,200 annually for healthcare per employee.
Marlo said the large employers she represents are “very concerned about the Cadillac tax and they’re looking for ways they can lower their costs.”
Of the companies surveyed, the average annual healthcare cost per employee was $10,700—higher than the threshold to avoid the Cadillac Tax. The pharmaceutical industry had the highest average per-employee healthcare cost, at $12,916. Retail and hospitality was the lowest, at $7,699.
