Hospitals need to start getting directly involved with employers in the sponsorship of worksite-based health clinics if they want to preserve market share and the opportunity to lead the way in population health management, according to Mike La Penna, founder and principal of The La Penna Group.
The rise of employer-based clinics
"The rise of employer-based clinics is catching most hospitals by surprise," he says. Community hospitals are currently being passed over in favor of outside vendors by self-insured employers seeking to establish worksite-based primary care clinics for their employees and their beneficiaries. "Employers are recognizing that the hospital community doesn't have equivalent services to those that are being promised by the vendor groups that are calling on them. The employers often embrace contracts with national or regional vendors rather than utilizing the services offered by providers in the local healthcare community," he says.
Many times these on-site clinic vendors will use locally available healthcare resources, and may even recruit physicians from a nearby hospital, thus depriving the hospital of both its primary care patients as well as a component of their own medical staff. Employees are encouraged to use the employer's on-site clinic through modifications in the employee benefits plan, which is often reformatted to incentivize employees to choose the on-site services. Benefit design is also used to channel patients to select hospitals and a narrow network of related specialists.
The opportunity for hospitals
The development of employer-based clinics presents a huge opportunity for hospitals that has not yet been realized, according to Mr. La Penna. Employers large and small have demonstrated that, as payers, they have significant power over patient steerage through the design of their benefits program and copays. By partnering with employers or with the vendor firms that are supplying on-site programming, hospitals can become a preferred provider in local employers' health plans. The hospital that successfully deploys this strategy will have access to a customer base of commercially insured patients. "This is probably the most important part of a typical hospital's market share because those covered by commercial programs are the better paying patients, so they're very desirable to have," Mr. La Penna says.
Consolidating a certain patient population at one healthcare site also creates an opportunity for population health management, including preventive care and wellness programs. Since the employer already has data on its employees, the hospital's task of identifying patients at risk for certain conditions is made easier. "For this specific, focused population, the employer can develop a population health model that is already very rich in data," Mr. La Penna says. He adds that the employer can also motivate segments of the population to levels of compliance that would not normally be achieved, again through benefit design modifications that only an employer can implement.
As part of this population health model, the employer might also elect to structure its benefits program to encourage employees to become part of an accountable care organization that can provide inpatient care and other services to complement the service available at the worksite-based clinic. By reaching out to employers that sponsor workplace health clinics, the hospital that is a partner in an ACO can increase its patient base. "These worksite healthcare programs, once they consolidate primary care, are a tremendous source of contracted volume for an ACO," Mr. La Penna says.
What hospitals should do
To take advantage of the opportunity employer-based clinics present, hospitals should take the following steps, according to Mr. La Penna.
1. Examine the marketplace. Hospitals should determine what the state of employer-based clinics and access to primary care is in their local community. One of the drivers of employers' interest in worksite clinics is a lack of primary care access, according to Mr. La Penna. Hospitals can make their primary care offerings more appealing by ensuring they are geographically close to employers and employees and that they have effective scheduling and available appointments. Even if a hospital has a large complement of primary care offices, they may not be able to accept a new patient for months. "A hospital [having] a primary care infrastructure does not mean it has primary care deployed appropriately," Mr. La Penna says.
2. Understand the differences among ambulatory care models. Hospitals need to understand the differences among different ambulatory care models, because urgent care centers are vastly different from employer-based clinics, according to Mr. La Penna. While urgent care centers treat any patient that comes in with a minor condition, employer-based clinics provide primary care to a specific group of patients. Knowing these differences can help hospitals better partner with employers. "They should be arming themselves with information about this industry so they can go in and demonstrate to employers that they're every bit as capable as an outside vendor to provide the type of service that the employer is seeking," Mr. La Penna says.
3. Build relationships with employers. Hospitals should begin to form relationships with self-funded employers in the community to gauge their interest in worksite clinics and discuss how the hospital may be able to fit in that model. "The reason vendors are trumping hospitals is the fact that their sales teams are out, talking to employers to try to find out needs they can fulfill," Mr. La Penna says. "Hospitals have to be at the plant or employer's CEO- or chief HR officer-level, constantly discussing new opportunities and new models. They can't lay back in this effort, or they'll have their lunch eaten by firms who are more proactive."
4. Consider partnering with a vendor. Hospitals can also approach outside vendors about jointly partnering with an employer. "A hospital may consider if there's a very aggressive vendor in the community, partnering with the vendor, because it's out there doing the sales job that the hospital may not be equipped to do," Mr. La Penna says.
In summation, Mr. LaPenna observed that the rise in on-site workplace clinics has now been established as a market factor that cannot be ignored. He observed, "This trend is one that can easily be missed by a hospital since it usually does have some kind of occupational health service and it generally treats workers in a variety of its existing service lines. However, this is not about occupational health, it is about population health and the employers that are leading the way with their own programming. The hospital that can understand an employer's needs is going to have an important partnership with a local enterprise that controls a significant and important patient base."
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