A new health clinic on the south side of Grand Haven offers basic medical care to employees at three local companies.
If employees at Jost International Corp., Automatic Spring Products Corp. or RA Miller Industries Inc. have a sore throat, sinus or ear infection, or some other condition that requires medical attention, they can go to the Health and Wellness Clinic — for free.
The center is part of a growing national trend of employers opening and funding their own health and wellness clinics to improve access to basic care for employees and to take more control over medical claims and costs.
“We wanted to provide a better health care option for our employees,” said Tina Zellman, human resources director for the family-owned Automatic Spring, which employs about 325 people at two facilities in Grand Haven.
“Certainly over time, there might be a return on investment, but health care costs are going up and the ability to get in to doctors sometimes is not available, and you always have a copay in most employers’ plans,” Zellman said. “So we wanted our employees and their families to be able to seek episodic care free.”
The clinic, which opened in January, is the second in the area for Automatic Spring and Jost International, which partnered in late 2016 on a clinic in Muskegon where a majority of their employees live. RA Miller joined their partnership this year and the three companies opened the Grand Haven clinic, which is housed in space adjacent to RA Miller’s facility in the city’s industrial park.
The employers contract with Grand Rapids-based ProMedico LLC to operate the clinic, which is staffed by a nurse practitioner and has medical oversight from a licensed physician. The employers also use the clinic for pre-employment and wellness screenings, eliminating the fees previously paid to outside vendors for those services.
Open 25 hours a week, the clinic averages 175 visits per month from employees and their dependents.
ProMedico runs clinics for seven small and mid-sized employers in Grand Haven, Muskegon, Kalamazoo and Indianapolis, and soon expects to add an eighth.
The company, formed in 2014, hopes to grow to 20 clinics within 24 months as more employers embrace the idea of having their own employee medical clinic, said Amy McCulloch, an account executive and partner at ProMedico and a benefits consultant at Lighthouse Insurance Group Inc.
“As a business, we would love to double in size,” said Susan Kuzee, chief operating officer at ProMedico.
Employer health clinics have been steadily gaining traction for years.
Interest among employers has grown to where the notion of having a worksite or nearby health center for employees and their dependents is no longer considered innovative or a novelty, said Mike LaPenna, a consultant and principal at Grand Rapids-based The LaPenna Group Inc. who has worked with employers across the nation to set up health clinics.
When meeting with prospects, LaPenna no longer has to spend the first part of the session discussing proof of concept.
“This is not exotic anymore,” LaPenna said. “If you brought this in 10 years ago, you would have to prove your point.”
Larry Boress, executive director of the Dallas, Texas-based National Association of Worksite Health Centers, estimates that more than 1,500 U.S. employers now have some form of an employee health clinic, whether on campus or nearby.
In a 2018 survey by the National Association of Worksite Health Centers and global benefits firm Mercer, one-third of responding employers with 5,000 or more employees as of 2017 reported having a clinic for general medical services, up from 24 percent in 2012 and 17 percent in 2007.
Another 11 percent of employers were considering offering a health clinic by 2019, according to the survey.
Among employers with 500 to 4,999 employees, 16 percent of survey respondents said they had a general medical clinic and 8 percent planned to add one by 2019.
“It’s clearly a growing number and something that’s growing in popularity, even among mid-sized and smaller employers,” Boress said.
Employer clinics “operate at all different levels” and with varying models, LaPenna said. Mid-sized and smaller employers who self-fund their health benefits are now embracing the strategy, often coming together to form partnerships to open a clinic, as is the case of Jost International, Automatic Spring and RA Miller in Grand Haven.
“Smart people are coming together to achieve scale and do something,” LaPenna said. “This is a no-fail system when done well.”
When “done well,” an employer clinic can become the primary care provider for employees and replace their own physicians, he said.
That’s the case at Lacks Enterprises Inc., a manufacturer that operates two clinics for its 3,000 employees who work at 26 facilities in the Grand Rapids area. The clinics, which opened in June 2014 and are staffed by doctors, are located within 20 minutes of 80 percent of Lacks’ employees, said Jim Green, executive director of human resources.
Lacks Enterprises contracts with Tulsa, Oklahoma-based CareATC Inc., which operates health clinics around the nation on behalf of employers. About half of Lacks Enterprises’ employees use the clinics for primary care visits, a rate that aligns with the national average identified in the Mercer survey.
To encourage employees and their dependents to use a clinic physician as their primary care doctor, visits are free under Lacks Enterprises’ benefits package, Green said. The two clinics average 12,500 visits annually.
The bottom line for Lacks, which spends $27 million a year for employee health care, has been what Green considers a “significant” 40 percent avoidance of costs over five years, a figure that’s based on market trends.
“If costs went up a dollar, we went up 60 cents,” he said. “You can’t stop the health care spiral up, but I’ve slowed it down, and I feel I have better access and better quality of care because it’s just our Lacks world going to these clinics. Our doctors are focusing just on our employees and their family members.
“I know I’m getting good, quality care for employees.”
Green advises employers considering opening or partnering on a clinic to build incentives into their health insurance benefits that drive employees to use them. Lacks Enterprises transitioned to a lower-cost, high-deductible health plan when the clinics opened, providing an incentive for employees to go there for free when they need to see a doctor.
“Plan design is very important to make it happen,” Green said.
Employer health clinics generally start to generate a return on investment after two years, McCulloch said. That return comes from offering primary care and diagnostic tests at a lower cost. The clinics can also help employees and dependents to better manage their health or a high-cost chronic medical condition such as asthma, high blood pressure, high cholesterol or diabetes — all of which drive a majority of medical claims.
At the Grand Haven clinic, “the drive for chronic disease management is a huge core of what we do,” said Zellman of Automatic Spring.
Beyond improving access to care for employees, controlling medical claims and costs, and better managing chronic conditions, employers can generate additional gains such as avoiding medical claims for ER visits, reduced absenteeism, and improved recruitment and retention of employees, Boress said.
Those benefits add to any financial ROI an employer can generate, he said.
“You have to look at the broader value of the investment, rather than the (financial) ROI,” Boress said.
Last year, Automatic Spring began to generate a “slight return” on investment from the clinics based on medical claims and expects further gains this year and beyond, although the company’s primary focus is “to support our employees and their medical needs,” Zellman said.
“The clinic was the right thing to do for our employees and medical care,” she said.
Among respondents to the Mercer survey who sought to measure ROI, more than half reported generating a return of 1.5 times or higher for every dollar spent.
“When designed and managed correctly, a worksite clinic can deliver high value to both employer and employee,” according to the Mercer report.
The talent question
Clinics also can help with employee attraction and retention.
While Zellman can’t specifically quantify the benefits that the Muskegon and Grand Haven clinics have generated for Automatic Spring in terms of luring and retaining talent, “people tell us all of the time that they loved coming to the clinic. ‘Can you believe they helped me with this.’”
These days, the clinics have become a differentiator when interviewing job candidates, Zellman added.
“Most employers have health benefits or a 401(k) retirement plan. But then when we say ‘and we have a clinic,’ I think definitely they understand that’s different than what a lot of companies offer,” she said.