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.



In Part I, we discussed the wide range of options a hospital or health system has for providing business-to-business (hospital-to-employer) services, what to consider in establishing a program and steps necessary for lasting success.

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


What do hospital-to-employer sales look like?

In terms of business development and sales approach, the health system-to-employer interaction requires a business-to-business sales model. This model is very different from what hospitals may be more familiar with, which is hospital liaison staff calling on physicians. Because we find "the sale" is a key Achilles' heel to success, it is important to consider the differences and understand what makes the employer sale successful.

Selling to many
Selling to employers typically involve several people and not one individual. In smaller companies the decision-maker may be the owner, but in larger companies, the chief of human resources with key stakeholders will make the decision. The CFO will probably be involved, and the employer will likely seek comparable proposals from other providers or vendors. The key in any team-buying situation is to try to meet with each or at least some of the individuals separately to win champions for your proposal. There are variables to consider that can change the decision-maker, and cost of services as it relates to the company's procurement policies is a big one.

Decision-maker expectations are different with the sell to an employer group. For example, the company chief executive and the finance chief want to talk dollars and results — cost savings, revenue and productivity. The HR people want to hear about how the program will help the employees. They may consider whether the program is meaningful enough to serve as a value-added perk in recruiting prospective employees. And, they too are interested in productivity.

Longer buying process
The "buying process" is typically longer and the larger the company, in many cases the longer the process. We use the term "buying process" to suggest that the seller align the "sales cycle" with the employer's internal process for buying or contracting. Other factors that affect buying process have to do with the employer's familiarity of the service you are selling. If the employer has never considered a wellness or provider-direct program and is not up-to-date on what these services can offer, you would have to plan for a longer sell cycle. Likewise, if the prospective company currently has a program they are looking to switch from, there may be existing contractual agreements that will prolong your ability to bring in the business.

Generally you can expect more meetings in this type of sale than other "simple sales." This is not a one or even two-call sale, so you can't expect to close the sale after the first couple of meetings. Part of the sales planning process entails knowing what the next couple of meetings are likely to entail based on a variety of distinct outcomes from the first meeting. Obviously, there are different acceptable protocols in different selling situations. For example, you won't want this sales person "stopping in" to see if the HR chief is available. We encourage more effective methods in the physician sale as well, but at least in that arena the "stopping in" is more acceptable.

The meeting preparation time is also greater for the high-level business sell. The seller knowing details of the corporation (such as public or private, financial state, number and locations of other offices or facilities, number of employees, employee-friendly company?), any existing wellness or healthcare services being offered, who and the position of each meeting attendee and each person's purpose for being in the meeting is a good place to start.  

With all these differences, and these are just a few, healthcare leadership cannot expect a physician liaison to transfer directly to this type of sales position. And they may not have the capabilities to make the transition, in the same way that not all sales people can be successful in the role of physician liaison. In both scenarios, additional knowledge, training and skills are required.

What type of business development is right for your health system?

Hospitals and health systems that successfully sell any of these types of services start slowly, with a well-conceived plan and realistic goals. They give the program the attention and commitment greater than a new service line launch because of the unknown factors associated with development and expansion. A couple of points to keep in mind if you are planning to launch a business-direct health service:

  • A marketing campaign alone will not stimulate interest on the part of the employer decision-makers. This business is introduced and won via direct sales, with marketing supporting the sales program.
  • Use important sales channels, such as insurance brokers and insurance consultants. It will be difficult, particularly in certain markets, to do it without them.
  • If those responsible for the program are at the service line management level with only hospital experience, they need an understanding of the greater corporate (non-healthcare) environment, how to evaluate employer needs, how to evaluate the competition and how to message your advantages in sales conversations with employers are all required skills.
  • Employers will want proof of value and results, so you will need an electronic tracking and reporting system that is closely monitored — even if it is home grown using Excel. If you are starting out without employer results to point to, consider giving price reductions to get in the door and build "success cases" tracking program activity and positive changes to employee behavior and health metrics. Those can be used to bring in more business. In time your program and employee changes can result in decreased healthcare costs.


Employer-direct programs have the potential to create a healthier, more productive workforce while decreasing employer healthcare cost and increasing hospital/health system market share. Perhaps, the most important aspect of employer-direct programs for the health system is building relationships and collaboration with the actual purchasers of commercial healthcare, employers and their employees.  

Kathleen Harkins, principal of Harkins Associates, works with health systems and health services companies in healthcare sales strategy, training and management development. With a sales management and training background in health insurance, capital equipment, Pharma, medical IT and professional contract services, Ms. Harkins brings the successful sales strategies and methodologies of top-performing companies to healthcare services, employer sales and physician relations through Harkins exclusive model, Healthcare Consultative Selling™.

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