Employers as Doctors
Major employers across the country, eager to curb fast-rising healthcare costs, are opening their own state-of-the-art health centers where doctors and nurses provide medical care to workers often just steps from their desks. The cost-cutting strategy has been embraced by dozens of companies — typically large employers that are self-insured and pay their own medical claims, including Walt Disney Co., Qualcomm Inc. and American Express Co. Many of the health centers are full-service medical offices equipped with exam rooms, X-ray machines and pharmacies. Some provide on-site appointments with dentists, dermatologists, psychiatrists and other specialists who treat life-threatening illnesses.
See full LA Times article and our previous posts on this issue here, here, here and here.
I’m not sure I like it.
I like the thought of this. Based on what little I’ve seen thus far, I hope the practice continues to spread.
I’ve talked to the managers of some of the firms that set up and run on-site employee clinics. They can standardize the practice of medicine and establish protocols not to order unnecessary tests or potentially unnecessary treatments. Workers are encouraged to use the company doctor because it’s easy, convenient and cost-sharing is typically waived. Some large school systems and large employers are able to implement this model. I wonder why numerous small employers couldn’t band together and use this model as well?
Devon Herrick, I think I have an answer for you!
I think that this is a good thing but that that there is less here than meets the eye. For those of use who prefer that health benefits be owned by individuals, not our employers, this should not disturb us.
Let’s flip ths on its head:
Here in San Francisco, Genentech has its own buses to commute its employees from their homes in San Francisco (a trendy, groovy place) to the office in South San Francisco (a grim, industrial place). Ditto for Google and some others. These are very well appointed motorcoaches that are leased long term from the operators and branded with the corporate logo.
Does it make sense for employers to take care of their employees commuting? In 90% or 99% of cases the answer is certainly not. But in these examples it is beneficial.
The opposite would be the case in a remote mining or oil & gas community. The workers might live in employer-owned housing. But this does not make sense in most cases.
So, to answer Devon Herrick’s question: Small groups banding together to provide these medical services face higher transaction costs than large employers do. They can’t solve the problem of employees taking too much time off work (because they would still have to leave work to go to the clinic). Logically, the small firms banding together to contract with a health clinic would also have to all move to a campus together.
Plus there is a cultural question: Large employers like the ones cited in these articles deliberately create a paternalistic environment and that attracts the type of people who want to work there.
Those of us who work at very small outfits would probably not like to go to the “company doctor” and would respond negatively – as we would to many of the paternalistic initiatives thrust upon us.
(I recall reading about a very large company – thousands of people in the HQ – where the CEO got everyone a pedometer and challenged them to go for a walk around the campus with him at lunch. Sometimes two dozen or more would join him and there was an element of friendly competition in that miles walked was recorded. Many employees reported that they lost weight and felt better. I thought it sounded kind of spooky but, hey, if it worked for them.)
Caveat: I also think that privacy concerns will always be an issue with the “company doctor.”
That’s the way it used to be. It just goes to show you that history repeats itself.
If the electric grid were failing, larger companies would install their own, reliable electric generating capacity to ensure the smooth operation of their business. Businesses have done this already in areas where electric companies have been poorly managed by state government.
Companies are reacting the same way to the expected failure of the medical “system”. Disastrous federal and state management of medical care is promoting the same reaction from companies.
This is not a welcome development. It is a defensive action by large, productive groups. It ties good medical care more completely to work, rather than having a healthy free market in medical care and innovation available to us all.
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Suppose there are two options for treatment. One is very expensive and produces 100% recovery 95% of the time. The other is much less expensive and produces 100% recovery 65% of the time and 80% recovery 20% of the time.
Which one will the company treatment guidelines choose to inform patients about? Which one would you choose if you were spending your own money?