Cutting Out the Middle Man: Opportunities for Hospitals to Partner Directly With Employers

Companies in almost every sector of business offer some kind of healthcare services to their employees. They can access employer health services via many outlets, including private "wellness" companies, their managed care plan and even via large consulting firms offering "employer healthcare solutions." 

However, with local hospitals and health systems increasingly networked with outpatient treatment facilities and multispecialty providers, who better than they to provide the greatest array of employer services? Today, many hospitals and health systems are taking a leading role in this arena, by packaging solutions — from employee wellness services to full-service health plan management — and selling them to companies in their area.

There is a wide range of options a hospital or health system has for providing business-to-business (hospital-to-employer) services. In this article, we explore several successful service models, what to consider in establishing a program and what it takes to create lasting success. For forward-looking healthcare providers, there are options worth exploring.

Then and now
Decades ago, many of the nation's businesses hired so-called "corporate" doctors, nurses and PAs. They held regular office hours to serve employees, handling everything from pre-employment physicals to yearly checkups, drug testing and workplace injury triage. Even today, some companies like software giant SAS Institute in North Carolina offer staff — and even their families — on-site healthcare. Also today on the provider side, health systems are partnering with local businesses to become direct providers of a range of similar services.

For the employer, programs like these hold the potential to lower their overall healthcare costs, lessen employee absenteeism, enhance productivity and build employee morale. For the hospital, these programs can generate revenue on many fronts, including serving as feeders into their (vs. a competitor's) health system services, and creating the potential for significant downstream revenue.

What do hospital-to-employer services look like?

Many hospitals offer some form of wellness service to employer groups. The range of options is limited only by the hospital's areas of clinical expertise, the needs of the community or employer group, the resources available for each service and the business expertise to plan, launch and sell the programs to employers. In other words, it is not as easy as it may look.

Start with what you know
At its simplest, a hospital can model a hospital-to-employer service after its existing community wellness programs, for example. You could offer employers a health fair for their staff or classes about prevention of common ailments or high-cost injuries, for example.

"That's how we usually get our foot in the door," says Stuart May, director of CorpCare Occupational Health Services, the corporate health arm of Eastern Connecticut Health Network, a two-hospital health system based in Manchester, Conn.

A step beyond that might be an umbrella of employer services, such as new-employee screenings, workplace injury care, employee assistance programs, employee physicals and prevention and early detection programs. Like other health systems we discuss here, CorpCare offers those services, and more.

Success with niche services
Morristown, N.J.-based Atlantic Health System is an example of a health system that takes advantage of its metropolitan location. With 1,308 beds in the system, its Corporate Health Department coordinates health and wellness services for several hundred clients and a total of approximately 50,000 employees.

In addition, Atlantic Health System offers employers an Executive Health Program, a flat-fee medical evaluation for corporations' top executives. This assures companies that their highest paid employees are going to stay healthy and productive.

"Atlantic's Executive Health Program is what we refer to as a 'smart physical,'" says Damion Martins, MD, the system's medical director for the program and Atlantic's sports health services, as well as director of internal medicine for the NY Jets. "Our unique program includes conducting genetic testing, lab work and health history profile in advance of the patient visit. Every test and assessment we do is tailored to the individual's unique physical blue print and current health status. Each exam we conduct and each subspecialist seen is for a specific finding that emerged from our analysis of the client's pre-evaluation, a good deal of which we get from the client’s genetic test results."

This approach allows the executive to complete the comprehensive exam in one-day, without the hassle of booking and waiting for appointments, waiting for test results or return visits to specialists to discuss findings. To view a case study on Atlantic Health System's Executive Health Program, click here.

Success for smaller markets
One assumption in the industry regarding corporate health is that larger hospitals/health systems in metropolitan areas will be more successful when selling services like these to employers in their area. But we see smaller hospitals succeeding in this arena, too.

For example, Indiana University Health Goshen in Goshen, Indiana, with about 125 beds, offers area employers its "Get Fit, Get Healthy" employee wellness program. It includes health risk appraisals such as standard blood tests and screenings at the employer worksite and also provides onsite wellness clinicians/health coaches to share the confidential results with the participants as well as summary reports (aggregated) to the employer showing changes and improvements.

A unique offering from Goshen is how they work with current employers under contract to take the next step in providing employees the most convenient access to care. After several years of impressive health-related behavior changes, along with improved health results, employers now contract with Goshen to provide them full-time onsite health clinics for employees and their family members.

According to Krista Thomas, wellness consultant for GFGH, "the outcomes were so positive after a few years that employers approached me to see if there was more we could do to further the health of their employees. The on-site clinic has turned out to be just the right service, and we have many other progressive employer solutions coming in the future." To view a case study on Indiana University Health Goshen's Get Fit, Get Healthy program, click here.

Full service, mature market
Perhaps the most unique of all offerings that a provider can sell to area employers are the services of a health management entity or health insurance plan. An example of this is a subsidiary of four-hospital, 786-bed CoxHealth in Springfield, Mo. Cox HealthPlans offers employers of every size fully insured products — HMO/POS and several options for PPO — and complete administrative services for the self-insured.

"It's important to realize that having your own health plan is not a guaranteed money maker," says Jeff Bond, CEO of a health plan developed by CoxHealth. "But if it's done right, everybody wins — patients, businesses, hospitals and the health plan." To view a case study on Cox HealthPlans, click here.

Potential and pitfalls of hospital-to-employer sales

As the examples above illustrate, some hospitals sell health services to employers as a way to create a new revenue stream. Others use them as "feeders" into other hospital services. As such, the key to success in these ventures is to consider and clearly define early on what you want your hospital to be for area employers. Do you see a specific area of need where your hospital is uniquely qualified to increase screening access for employees at-risk or perhaps reduce specific disease incidence that can lead to reduction in healthcare premiums? You may see the employer business objective set purely to drive downstream revenue to the hospitals in your system where occupancy rates have fallen below a certain level.

Words to the wise
Once the hospital is clear on purpose and establishes program objectives, be sure the objectives — whether in the form of revenue, units of sale or costs — are truly achievable by the team assigned to meet those objectives. The greatest risk we see is when inexperience in sales forecasting drives expectations far beyond what is achievable. Conversely, if expectations are too low, your program may sputter along without ever truly launching.

Equally debilitating is a sales staff that does not get clear sales goals because the responsible hospital manager wasn't clear about setting projections for hospital-to-employer services. In addition, there can be a risk to your professional reputation and to whatever investment in capital and staff that the hospital has put into the endeavor.

There have been cases where the hospital-to-business programs did not get the resources required to build the infrastructure for an employee wellness program because the attitude was, "if business development sells it, then we'll put in personnel to fulfill the agreement." When that "sell" day came, the hospital staff scrambled to assign the personnel and to provide staff necessary training in the provision of wellness services. Needless to say, the program didn't have the required lift to get it off the ground.

In Part II, we will explore the business development/sales models required to create success in selling to employer groups.

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