Is There a Doctor In the Firm? Businesses Hope Wellness Plans Save

By | December 10, 2009

Liz Sequeira, a 52-year-old primary care physician, is too young to remember when U.S. doctors made routine house calls. So to her, seeing patients in her three exam rooms on the first floor of Discovery Communications Inc.’s modern headquarters in Silver Spring, Md. is like stepping back in time.

“It’s like being an old-time doctor, a town doctor,” said Sequeira, whose clinic in the company’s wellness center serves as many employees’ first stop for blood tests and medication.

As Democratic lawmakers in Washington inch ahead with plans to overhaul the U.S. healthcare system, companies like Discovery are striking out on their own — whether through on-site doctors or diet plans — to rein in soaring costs in a nation where employers still pay for the bulk of medical care.

Under proposals moving through Congress, employers of all sizes would get incentives to entice workers into corporate wellness programs, even though it is still unclear whether the programs improve employees’ health let alone companies’ bottom lines. Despite the lack of solid evidence, a growing number of companies expect it will do both, and they’re spending real money to find out.

Of course, for some recession-battered companies, wellness programs are an unaffordable luxury in the face of health insurance costs that according to the Kaiser Family Foundation shot up to more than $13,000 per employee — 131 percent more than in 1999.

Discovery, for one, needed no further persuasion. It opened a second wellness center at its New York office this year and plans one in Miami in 2010. Hiring on-site doctors and nudging employees to take better care of themselves helped halt the growth of its health costs — it was flat last year, which is more of an achievement than it sounds like considering that most companies saw a 10 percent rise over the same period, Discovery officials said.

“Every time an employee walks into the clinic, we save money,” said Evelyne Steward, Discovery’s global vice president who oversees wellness and diversity issues.

Without some kind of reform, U.S. health insurance costs per employee will triple to nearly $29,000 in 2019, according to the Business Roundtable, which represents large employers. Costs have already jumped 131 percent since 1999 to $13,375 in 2009, a Kaiser Family Foundation study found.

When an employee gets a physical exam from Dr. Sequeira instead of a private physician, Discovery saves about $100, Steward said. It also gets increased productivity by saving workers’ time and detecting serious health issues sooner.

All in all, the parent of Animal Planet and the Discovery Channel calculates it saved $5 million since opening the Silver Spring clinic and launching other programs five years ago. About $4 million of that is from lower medical claim costs.

While current proposals before Congress do not provide direct incentives for on-site clinics, they do offer companies tens of thousands of dollars for broad wellness initiatives such as weight management plans, counseling and more.

On-site clinics are still relatively rare in corporate America, but are growing fast. They serve four percent of working Americans and could rise to 10 percent in five years, according to research firm Fuld & Co. About 1,200 companies now host 2,200 clinics, a number seen rising to 7,000 facilities by 2015, Fuld found.

An even larger number of companies have adopted more modest programs to promote “wellness” among workers and help them manage costly, chronic diseases such as diabetes. Nearly 40 percent of 626 employers in the United States surveyed by consulting firm Buck Consultants said they would offer healthier vending machines or targeted websites, while about 25 percent planned new health-oriented websites.

Employers are also hiring nutrition counselors, holding on-site fitness classes and offering discounted gym memberships to keep workers healthy. Using third-party vendors or certain insurance plans also aim to help companies ensure patients take prescribed medications and follow doctors’ orders.

MEASURING SUCCESS

Doctor visits, medications, hospital care and more all add up to a $2.5 trillion U.S. healthcare industry, or one-sixth of the nation’s economy. The federal government foots the bill for some 45 million elderly and disabled Americans, and for millions more who are poor, including children.

That leaves employers to take care of the rest.

Still, less than a quarter of U.S. companies offering wellness benefits actually measure whether they save money, Buck Consultants found. Among those that did measure, two-thirds said their rate of cost increases fell about two percentage points per year — “not an insignificant return on investment,” according to the survey.

IBM Corp. said it saved about $190 million in health costs between 2005 and 2007 covering more preventive care and introducing cash incentives for smoking cessation and better nutrition. Next year it will also offer employees up to $300 to monitor their habits.

Others with successful wellness programs include Pitney Bowes, Safeway and Johnson & Johnson.

But pressure from the nation’s worst economy in decades has forced some companies to scale back efforts.

Industrial equipment maker Caterpillar Inc., which laid off tens of thousands of employees amid a plunge in sales, also laid off health coaches at many of its facilities and halted some programs helping patients control diabetes, a chronic condition linked to obesity.

“That part of the program had to be temporarily suspended just because of the economic recession. But we have plans in place to get them back in place as soon as possible,” said Dr. Mike Taylor, Caterpillar’s medical director.

Caterpillar spends about $650 million a year on health care for its employees and its annual increase in health care costs is about 1 percent since various programs began in 2002.

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