Last fall, Marie Bronson, director of human resources at FMS Corp., a powder metal manufacturer in Bloomington, Minnesota, called a meeting of the company's 118 employees and made an unusual request: If you think you have a common ailment, like strep throat or an ear infection, consider not seeing a doctor. Bronson was not suggesting that employees tough it out. Instead, she encouraged them to seek treatment for minor illnesses from a nurse practitioner or physician's aide at a MinuteClinic, a health clinic located in a nearby CVS store. "Every year, it gets harder and harder to provide benefits," Bronson says. "We have to be as creative as we can."
FMS is among a growing number of companies attempting to cut health care costs by sending employees to so-called mini-clinics, which are popping up around the country in chain stores such as Wal-Mart and CVS. In the past few years, businesses have adopted a variety of new strategies, including health savings accounts and purchasing pools, to reduce health insurance premiums. But none of those strategies lower the cost of the treatment itself.
The new breed of mini-clinics--including MinuteClinic, which now has 82 locations in Target, CVS, and Cub Foods stores around the country, and Take Care Health Centers, which expects to open 200 clinics in Rite Aid, Osco Drug, and Brooks Eckerd pharmacies this year--aims to do just that. The clinics are staffed by nurse practitioners, rather than doctors, and treat a narrow scope of ailments, eliminating the need for pricey equipment like X-ray machines. Unlike doctors' offices and urgent care centers, most clinics, which operate independently from the stores where they are located, don't have receptionists or even waiting rooms. Typically, patients enter their information into a computer kiosk outside a small examination room. If there's a wait, they can grab a beeper or leave a cell phone number, then go shopping until a nurse is available.
The low overhead structure makes it possible for the clinics, which accept most health insurance, to charge much less than primary care doctors or urgent care centers. David Reid, president of Apprize Technology, a consulting firm in Minneapolis that helps companies analyze medical costs, recently reviewed insurance claims for a child treated for ear infections at both an urgent care center and a MinuteClinic. The trip to the urgent care center cost $102; MinuteClinic billed $48. "The clinics make so much sense," says Reid, who routinely recommends them to his clients. "You don't need a hospital setting to deliver these kinds of services, and companies can't afford that anymore."
Many business owners would agree. Since 2000, health insurance premiums for a family of four have skyrocketed 73 percent, according to the Kaiser Family Foundation and the Health Research and Educational Trust. That has prompted some companies to cancel coverage altogether. Last year, 59 percent of employers with fewer than 200 workers offered health insurance, the lowest percentage in a decade. Mini-clinics can help reduce insurance premiums by slashing a company's annual health care bills. "The cost of claims directly drives what an employer's premiums are going to be," Reid says. "Anything that incurs lower health care costs is going to keep underlying premiums low." The clinics also educate employees about medical costs. On the MinuteClinic website, patients can plug in their Zip codes to view a clear-cut pricing menu for the nearest location.
"When you get down to it, people care about the dollar amount being taken out of their paychecks," says HR director Marie Bronson.
Bronson used hard numbers to convince employees at FMS to give MinuteClinic a try. The family-owned company currently pays $35,000 a month to cover 85 percent of the insurance premiums for employees and 45 percent for their families. Workers contribute the rest through weekly payroll deductions that run as high as $107 for family coverage. The company's premiums increased 13 percent in 2005, a point that Bronson used to bolster the case for clinics last fall. She also compared the cost of an insurance claim from a nearby MinuteClinic with a claim from a pricier urgent care center. The savings were not immediate, she acknowledged, since employees will pony up a $20 copay either way. But, over the long run, she said, lower claim costs could translate into lower premiums--and less money coming out of their paychecks. That got everyone's attention. "When you get down to it, people care about the dollar amount taken out of their paychecks," she says.
Convenience is another selling point. Most clinics do not require appointments and are open on the weekends, with late hours during the week. The extended hours and quick service can be a boon for productivity because employees will presumably spend less time in the waiting room and more time at their desks. "I'm literally in and out of there in half an hour," says Bronson, who has visited the MinuteClinic several times to treat her child's ear infections and her own sinus problems. "I've waited two hours in urgent care just to be seen."
Depending on state regulations, some clinics have a doctor on call to answer questions. If an illness is beyond a clinic's scope, patients are referred to their primary care doctors, urgent care centers, or hospitals. "We are not a means to replace primary care but to complement it," says Michael Howe, MinuteClinic's CEO.
The American Medical Association has taken a stance against MinuteClinics, saying that symptoms that seem trivial can actually be the sign of a serious problem. Other critics have suggested that nurse practitioners at mini-clinics may have an incentive to prescribe medicine unnecessarily to boost sales at store pharmacies. MinuteClinic maintains that its contracts with retailers specifically state that nurses will not steer patients to pharmacies. Nurses follow strict protocols for diagnosing illnesses before writing prescriptions and keep detailed records on patient visits.
The clinics, of course, don't address the costliest medical problems. Twenty percent of the population accounts for 80 percent of health care spending, notes Paul Fronstin, director of health research and education programs at the Employee Benefit Research Institute in Washington, D.C. Those are people with chronic conditions such as heart disease and cancer. In other words, businesses with seriously ill employees aren't likely to see much benefit from mini-clinics.
Bronson acknowledges that the clinics are not a cure-all. But when you're grasping for solutions, she says, every little bit helps. This year, premiums at FMS rose 8.5 percent, compared with the national average of 9.2 percent. She expects to see a bigger impact now that more clinics are opening and word of mouth is spreading among staffers. "I'm anxious to see our numbers," she says.