On-Site Clinic NewsON-SITE CLINIC NEWSLETTER

The Newsletter for Employer-Managed Healthcare
In This Issue
Consolidation
Retail
Wellness
Association
Risk
Trading Up
Brokers
Regionals
Schizophrenia
Everything Else
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Vol. 22 No. 1
January 2012

Greetings!          

 

Happy New Year!!  Forget looking back at 2011.  Let's look at 2012 and some important trends that will impact the on-site clinic industry.  First, I love predictions.  I wish I could be a futurist and not a consultant because they are never around when the future happens.  Regrettably, consultants only have clients that want short-term answers and equally near-term results.
 
In the on-site clinic marketplace, many of the changes reflected upon in this issue are already happening; and then there are some that won't be occurring immmediately.  To play it safe, the changes I am predicting here don't include a timeline; and you will have to think about how you might be positioned when (and if) they really happen.

 

What are your predictions for 2012?  What are your guesses about where the industry is headed? Let me know by logging on to www.onsiteclinics.org, and we will run some of the ones that I missed in this newsletter. 

Consolidation will continue . . . only differently 

The last couple of years saw some industry streamlining and consolidation.  Big companies bought a couple of smaller ones, and some companies that wanted to get into the industry entered through acquisition.  The consolidation to look for in the near term is regional and functional.  Two or three smaller players will merge to strengthen a foothold in a specific area, and a hospital system will look to link with (acquire) a local player.  If there is a national play out there of some kind, we are missing it.

 

If you are a vendor, look for collaborative arrangements as well as regional consolidation.  If you are an employer, you should review your contracts relative to clauses that relate to transition, termination, assignability, and restrictive covenants.  Who controls the staff, leases, data bases, computer licenses, intellectual property, subcontractor arrangements, equipment, supplies, etc.?

On-site programs will figure out the role of retail access

The availability of retail primary care is just too big to ignore, and your beneficiaries are impacted by the channel of care that is in the strip mall down the street.  The PA next to the photo counter who writes scripts that can be filled while you shop for snacks and deodorant is going to be part of the conundrum of care.  Walgreens, CVS, Walmart, and others know this.  The rest of the on-site providers have to figure out relationships with the consumer access points that are popping up on every street corner.

 

Employers and those who manage benefits programs will also want this as a component of care, and the consumer health care plans will include retail options.  Vendors who do not have their own options for the neighborhood access that consumers seek will have to coordinate care with a group that does.  This may be a region-by-region process, but it is already occurring and impacting RFPs.  There are models that can be used to involve retail in the overall benefits scheme.  This is the year that these models will become much more evident.

 On-site programs will figure out "wellness"

This is another "too big to ignore" factor for the employer.  This time, it is due to the existence of a continued media blitz surrounding wellness and new Federal funding for initiatives that support programming.  Employers have a great opportunity to seize a learning moment and implement some real wellness programming.  On-site vendors should be aware of how they can assist their clients with a better understanding of how this can all work cohesively.  By the way, we are not talking about the on-site Smoke-Stoppers class and the $25 credit for the local gym.  I am talking about real primary care intervention in a care protocol that is active and measurable. 

NAWHC will emerge as a force in the industry

I admit personal bias here.  However, the industry is ready for a national organization, and the National Association of Worksite Health Centers is accepting membership applications.  I am proud to have been involved in the launch of this organization, and I predict that it will have an impact in 2012 - if you join and make it happen, that is.  NAWHC information can be obtained from either Larry Boress at MBGH or from our firm.   A group of charter members is now being assembled.

 

This is an industry that is crying out for standardization, and NAWHC will provide it.  Expect to see the sharing of information to be a major benefit of group participation, with NAWHC membership casting a large shadow on an industry that is still in its formative stages.

 Vendors will come to understand the concept of risk

My head spins when I go from a hospital client that is working on an accountable care organization (ACO) and then talk to an on-site vendor who is suggesting that they take some kind of risk.  The self-funded employer takes the entire risk on the whole of the health care "spend." If health care goes up 10-to-12 percent, this is passed on through the fee-for-service health care system, on the top of the cost-plus on-site vendor, then to the employer where the buck stops.  When a vendor says that they guarantee their fee, or place part of it "at risk," it is the equivalent of Discount Tire telling me that they guarantee the tire and will refund my money up to the proportion of the remaining tread that is left.  I am the one with the flat tire, and they are going to apply the discount against a new one that I am forced to buy unless I want to drive on my rim to another outlet.

 

This year, ACOs will be grazing in the marketplace, and they are willing to share real risk with employers.  When they are anchored at a hospital or health system that can also do the on-site programming, the industry will then see risk being amended to involve on-site primary care and not just a few bucks here and there off a management fee.  It will only take one or two vendors to experience this for the word to get around that employers are looking for partners who want to truly share risk.

Employer-vendor relationships will mature and employers will "trade up" 

Many of the employers now "get it" and are coming to the end of the initial contract term.  Evaluation of these contracts and re-contracting is underway in some large-scale venues.  This past year, there were some significant changes by employers in on-site vendors.  They kept the clinic and changed the management team.  The concept was thought to be sound, but the execution and its cost was under scrutiny. Employers should be sourcing what is new in the industry and what contract forms are currently being suggested.  Vendors should be leading the way by providing employer-clients with new services, new benchmarks, and new levels of employee service.

 

Our newsletter and Web site (www.onsiteclinics.org) are both dependent upon press releases.  When a vendor contract is terminated, there is generally an agreement that neither party will disclose the reason for the termination.  Sometimes the new vendor relationship is also kept quiet to allow a transition that is seamless to the employees. We know that this past year several major companies maintained their commitment to on-site programming, but changed the vendor who was providing the oversight and staffing.  If everything is working, why the change?  Hint: They changed because everything was not working.

Brokers will emerge as vendors
Some brokers are much more than brokers, and they provide all sorts of health care cost containment services. There are several of them around the country that are moving their clients into on-site programming, and we will see more of that in 2012.  Remember, the broker has the client already, and they have probably installed case management and disease state management tools.  They are identifying avenues for cost savings, and they are handling the data that can be easily used to run a quick pro forma on the ROI of on-site services.  All they need to do is to embrace a workable model and call their larger clients for an appointment.  The client is probably already thinking about this option, and the broker has the inside track to walk them through it.  Watch for more brokers like Webb & Greer and Intercare Insurance Solutions who are already making their mark in the on-site industry.
The "regionals" will emerge as a factor

There is definitely a role for national vendors - TakeCare and CHS are very competitive and write great RFPs.  However, most regional firms cannot figure out that they could succeed by being what they are - regional.  This means using local connections and networks to ferret out the prime customers and crafting programs that reflect a level of local understanding that the "bigs" can't take the time to understand.  [Who can compete with QuadMed in the Milwaukee market?]

 

The local (regional) provider knows the area, the local players, and can probably be very competitive on their own turf.  We have already seen some providers that have been pruning accounts that are not right-sized or "local enough" to service efficiently.  HealthStat comes to mind.  These firms are the ones to watch since they are working their portfolio of clients to assure continued high levels of service and profitability. Once regional providers quit wasting time responding to RFPs that stretch their capabilities and resources and re-apply these efforts to local market development, they will be unstoppable.

 

Watch for Rosen in Florida - twenty years of experience and a new site combined with the resources of a broker and full TPA functions?  Once they finish linking with some of the local health providers, they will have a product that will be a major factor in the Southeast region, if they want.

Vendors with "dual identities" will figure out how to optimize each
Think of Cerner and H2U (Formerly First On-site), their connection to on-site clinics, and their hospital client bases.  Each can walk into a local health care provider and merge the on-site program with the resources of a hospital and its physician medical staff.  They are each poised to command certain segments of the market, and these service alignments will start to pay off.
 
I should also mention that each is talented and and has unique strengths in their respective offerings.  I would also think that the same case could be made for Aetna, United, and Cigna.  Each insurance vendor has an arm that provides on-site solutions, and once they set their mind to development, they will be able to make a big play in whatever market they enter (as long as they do it with existing clients).
 
Each of the examples in this section is well capitalized, and the only limitation is the political barrier of providing a competitive product to other clients and stakeholders.  The year 2012 is the year they will figure it all out.
Hospitals and health systems; care management and narrow networks
I mention these categories because they each deserve individual mention here.  Care management will continue to be the "forgotten factor."  Value-based networks and direct contracting will be the feature that most vendors won't be able to figure out and most employers will forget.  The programs that "bend the curve" will have embedded care management and selective contracting.  The year 2012 may not be the banner year for this, but some programs are in development stages that will report important results.

Hospitals and health systems will likewise hit the radar screen.  Quietly, systems like Atlantic Health, Wheaton Franciscan, and Erlanger are making their presence known in their own marketplaces.  HCA has invested in a strong program.  Carolinas Healthcare System has fifteen clinics and counting.  Johns Hopkins is in the travel medicine business and contracting directly for specialty services.  You just have to follow these at  www.onsiteclinics.org to see what is happening here.  For 2012, no industry-wide impact, but for select programs - big results.
For more on-site clinic news, visit our Web site at www.onsiteclinics.org 

I know, you think that I forgot your pet prediction. Maybe this is true. However, here is a compilation of what I was thinking about, but will not really be a factor in 2012.

 

Employers will share sites on a selective basis but few vendors, and fewer employers understand how to do this.  Look to the brokers and hospitals to figure this one out.  Vendors, especially the health systems and insurance groups, will start to capitalize the sitesThe PBM and pharmaceutical issue will continue to fester and cause confusion among employers, vendors, and consumers. The only people that are not confused by how this will be resolved are the ones at Express-Scripts.

 

There are some new things in the environment that no one has figured out yet.  Included among them are digital health solutions, telemedicine and remote applications, genetic screening programs, and effective consumer-based cloud storage of health data. (Hey, even Google could not figure this last one out and abandoned GoogleHealth.)

 

Yes, we still have to wonder about health care reform and the election - and, yes, health care costs will still go up.  This means that firms and employers will still be seeking solutions with few that seem effective and functional.  On-site clinics will still be in a growth mode for these very reasons.

 

Other predictions? We might get some real research published some time this year.  I have edited a couple of terrific articles, and there are more coming. I know that a couple of other national groups are considering the addition of sections or subdivisions that relate to on-site programming, and this will lend additional credibility to the industry.

 

Consultants should be re-tooling to assist employers in program evaluation (actually, re-evaluation).  There will be a couple of new entrants into the field as fringe providers with one or two major entrants, eventually (but not in 2012). Who knows what Walmart will do?  They announced a full-court-press in primary care.  They do have Bruce Sherman, M.D. as their medical director, and they are the largest of the large.  No predictions on this last one, but they can do anything they want and will change the game when they do.  

 

Let me know your prediction and what you think of mine . . . 

 

Sincerely,