Employee health programs are being transformed into major moneymakers
Hospitals seize the opportunity to offer services to outside clients
Cost justification has been an ongoing challenge for wellness professionals. While some of the current literature indicates attractive returns on investment, it often takes many years to realize some of the big-dollar benefits.
In response to that challenge, a number of hospital employee health programs have developed a new strategy for significantly increasing revenues in a short period of time: providing the same services to outside clients. While it doesn’t always lead to huge profits, at the very least it helps defray the costs of the in-house program.
Hospitals around the country are expanding their employee health services or merging them with the facility’s occupational medicine department to create stronger and financially successful programs.
While there may be some logistical issues to tackle in providing drug testing, vaccinations, and other services to outside clients, "at some levels, it defrays the hospital’s cost of doing business to provide employee health services," says Caroline Murray, MD, MPH, medical director of occupational medicine at Dartmouth Hitchcock Medical Center in Lebanon, NH. "Now there are other people paying for those same services. You become a revenue-producing and not just a revenue-consuming area."
Additional occupational medicine resources may also enable you to boost the services you offer to employees and improve access to physicians with that specialty, says Geoff Kelafant, MD, MSPH, FACOEM, medical director of the occupational health department at Sarah Bush Lincoln Health Center in Mattoon, IL.
If you already have an occupational medicine clinic that serves outside clients, employees should have access to that expertise, says Kelafant. "For them not to provide the same level of service — in fact, a better level of service — for their own employees is unethical," he says. "You should take at least as good care of your own employees as you do external employees."
Yet, how that service is structured can vary considerably. For example, at Baystate Health System in Springfield, MA, the three related hospitals have used three different models of providing employee health care. "A lot of what makes sense for a given organization is going to depend on the size of that organization," says James Garb, MD, director of occupational health and safety for Baystate.
Service expands to affiliates
For some hospitals, the broadening of the employee health focus occurs gradually in response to requests from community organizations.
At University Hospitals of Cleveland, expansion from a hospital to a health system meant the addition of ambulatory sites, community hospitals, and other affiliates. The facilities began asking for physicals, preplacement drug testing, and other services, recalls Carol C. Grove, MSN, RN-C, PNP, manager of employee health services.
Soon, a skilled nursing center with a loose affiliation with University Hospitals asked for help with employee health physicals, and the fire department needed hepatitis B vaccinations. Since Grove doesn’t have a budget to provide services to all affiliates of the health system, she passes along lab charges and other costs. She brings in additional staff on an as-needed basis. She doesn’t bill with profit in mind, but tries to recoup her costs.
"I didn’t go into this thinking I would make money," she says. "I just wanted to keep our budget on target and do something for other people."
Grove expects that the employee health services will eventually expand to formally serve all entities within the health system, as well as the loosely affiliated organizations. "We’ve had to grow as the system has had to grow," she says.
Assess demand in market, billing needs
Those who proactively decide to expand must first make sure there is enough demand in the market, advises Murray. That "needs assessment" may be as simple as determining who else is providing expertise in occupational medicine and surveying employers to find out if they need better access to testing, physicals, and other services.
Serving other industries may mean adding new equipment and providing new types of care. For example, Dartmouth Hitchcock purchased breath alcohol machines to conduct screenings for the Federal Highway Administration commercial driver medical examination. The hospital now can use the machines for internal testing if there is "reasonable suspicion" that someone is working while under the influence of alcohol. However, the equipment is used mostly for external clients.
In other situations, the care needs are quite similar. "We provide the same services to a policeman who has a bloodborne pathogen exposure as we do to a nurse who has an exposure," says Murray.
Once you decide to offer your services to others, you face another possible obstacle: How do you bill them? An employee health service doesn’t bill its own employees. Its care doesn’t often fall into an ICD-9 diagnostic code. Moreover, you aren’t billing the patient; you’re billing the employer.
Murray advises working with financial officers at the hospital to determine how to contract for the employee health services, charge for screening, surveillance, and exams, and set up the billing system.
Could a merger be for you?
For hospitals with coexisting occupational medicine and employee health departments, the idea of a merger may be controversial. Employee health often reports to human resources, while occupational medicine may be part of a multispecialty clinic.
Some occupational medicine experts strongly believe that the two departments should blend together, and that employees should be able to visit the hospital’s occupational medicine physicians.
When Kelafant came to Sarah Bush Lincoln Health Center, he proceeded to merge "employee health" with "occupational health." Even the use of the two terms seemed a bit awkward. "Technically, it’s all occupational health," says Kelafant, who is also vice chairman and communications chairman of the Medical Center Occupational Health Section of the American College of Occupational and Environmental Medicine in Arlington Heights, IL.
He designated one nurse with the part-time duty of keeping up with the hospital’s needs for surveillance. For example, she makes sure that the health care workers are up to date with their TB tests and vaccinations.
Meanwhile, "the employees can come down anytime they need to be seen," he says.
Merging the two departments is cost-effective, but Kelafant cautions that employee health — or occupational medicine — may not necessarily become a profit center. That will depend on such issues as how competitive your market is, how you price your services, and how great your internal need is for those services.
At Sarah Bush Lincoln Medical Center, Kelafant discovered that aspects of employee health were actually parceled out to different areas of the hospital. By consolidating, the goal was to provide better care, not to add revenue or save money, he notes.
At Baystate Health System, the model of care is based upon employee needs and feasibility. The smallest hospital, with just 350 beds, was able to boost its employee health care by offering the service to outside employers. About 85% of the clinic’s time is devoted to outside clients, and just 15% to employees, says Garb. "If they didn’t provide those external services, it would be hard to staff an employee health service for such a small number of employees," he says.
Meanwhile, the system’s mid-sized hospital with about 1,100 employees recently started an in-house service with a nurse practitioner and an LPN. Previously, an occupational medicine clinic that was not affiliated with the hospital provided the service.
"The response has been overwhelmingly positive," says Garb. "They have so much more accessibility, they can get questions answered quickly, and they are getting a higher level of service. [The doctors] were all fine practitioners, but they weren’t dedicated to the hospital. The hospital is our only client and we have to provide them with first-class service."
Different models meet different needs
The system’s largest hospital, with about 6,600 employees, has both a freestanding occupational medicine clinic and a large employee health service. It is simply too large to consider merging the two, Garb says.
Furthermore, it can be an advantage for a distinct employee health service to report to human resources, says Garb. Employee health may do more than just handle health and surveillance needs.
"We devote time to meeting with managers, [and] with EAP [employee assistance program] human resources. We spend an hour, a half-hour, coming up with options and a creative solution to the [employee’s] problem," he says. "I don’t think you’d find that level of service so readily in a department primarily focused on outside clients."
Kelafant agrees that there are some situations in which separate occupational medicine and employee health departments might be advisable, or even necessary. For example, some health systems have campuses that are geographically distant. A research facility may have labs or other specialized areas that have unique surveillance needs.
"There are cases that can be made for keeping them separate," he says. But he adds, "For the majority of people, especially if you already have an occupational health clinic, you might want to explore whether there might be some advantages in merging some of the functions."
Key points
- Serving employees in remote sites will be a major programming challenge.
- Drug testing and vaccinations are among the most popular services offered.
- Even when profit is not turned, providing outside services helps offset costs of in-house programs.
- Merging with the hospital’s occupation health program is another option to ensure financial success.
Source
Don R. Powell, American Institute for Preventive Medicine, 30445 Northwestern Hwy., Suite 350, Farmington Hills, MI 48334. Telephone: (248) 539-1800. Web site: www.healthylife.com.
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