Making healthcare affordable and convenient is a priority for many employers. And when looking for new and different offerings, onsite clinics and telemedicine programs may be top of mind. While both programs have their benefits, employers should consider their goals, priorities, and limitations before choosing one of these solutions over another.
Ease and Availability
Onsite clinics: Onsite clinics allow employees to easily and quickly visit a physician during the workday, with minimal time away from work. If appointments remain on schedule, an employee may only spend 30 minutes away from their desk. However, these clinics usually have a very small staff and limited hours. If the schedule is full, the patient will either have to visit on another day or use a different provider. Additionally, employees who cannot go into work will not be able to use the service.
Telemedicine: Telemedicine is available 24 hours a day, 7 days a week, 365 days out of the year. And the top providers have wait times as short as two to twenty minutes to speak directly to a doctor. Once they’re on the phone, consultations often last only ten minutes. Plus, employees can call from anywhere, even if they aren’t in the office.
Onsite clinics: Onsite clinics have very comprehensive care, including preventive and episodic, for employees and their families. They may even be able to provide some prescription drugs, as well as vaccinations and lab tests. Patients with chronic conditions can easily follow up at the same location and with the same physician. But since clinics often have limited hours, urgent care needs on weekends or evenings are usually not available.
Telemedicine: Telemedicine gives patients access to nurses and doctors whenever and wherever they are. But it is limited to diagnoses that don’t require examining the patient or lab tests. It cannot be used as regular preventive care and cannot administer vaccinations.
Onsite clinics: Usage at onsite clinics is typically high, although it varies by employer. Factors impacting usage are number of employees, size of clinic, services provided, and years it’s been open. Some studies have shown rates approaching 70% for long-standing clinics. Additionally, smaller companies, about 5,000 employees and below, may often be under capacity. If the clinic is open but no one is using it, the employer is still paying for nurse and physician time. On the other hand, if a clinic reduces it’s hours, an employee or family member may be forced to go to a different provider if the clinic isn’t open when needed.
Telemedicine: Telemedicine is always available. And while you may think that telemedicine has low utilization rates, that’s not true for all programs. Good providers can boast utilization rates of 40% or more. This means that for every 1,000 employees, there are 400 calls to telemedicine each year. That’s a lot of saved doctor’s visits! However, if the utilization rate is low, the program isn’t benefitting either the employer or the employees. That’s why utilization rate is the number one metric to understand when implementing a telemedicine program and choosing a provider.
Costs and Implementation
Onsite clinics: Onsite clinics are costly, both in time and money. To open a new clinic, space will need to be allocated. They need at least three rooms: a waiting room and two exam rooms. Once the space has been allocated and built, it will need to be equipped with medical supplies and equipment. This can include exam tables, desks, chairs, gloves, and more. In addition to these initial capital costs, there are ongoing operational fees. There is an annual fee per employee per month (PEPM), physician and staff wages, and supply costs. Here is a typical breakdown for first year costs for a 1,000 person company:
Building cost: Variable
$20 PEPM fees: $20,000
Physician wages: $300,000 ($150/hour for 40 hours/week)
Pharmaceutical costs: Variable
Total: $355,000 + Building cost + Pharmaceuticals
Onsite clinics are an expensive benefit to provide. Plus, it requires a lot of time and energy from the employer to plan, build, execute, and manage properly. And it can be months before it’s even operational.
Telemedicine: The cost structure for telemedicine is a simple PEPM fee. Onboarding costs, such as implementation and employee communications, are typically included in that fee if you’re working with a good telemedicine provider. The PEPM fee can range from $0.85 to $8.95. There may also be a copay due from the patient when a call is placed. This means that the average year one telemedicine costs of a 1,000 employee company is just $59,000. Additionally, a telemedicine program can be implemented in a few weeks, and you may only need to provide a current census of eligible employees. The telemedicine company will do the rest.
Savings and Value
Onsite clinic: Onsite clinics can bring long term value to an employer. Convenient access for biometric testing, annual preventive care, and chronic condition management should improve the company’s population health. Onsite clinics may also employ dieticians, counselors, and wellness coaches to bring additional benefits. The value is there, but opening a clinic is no easy feat. It takes a lot of up front money and time, plus the commitment to ongoing supply costs, wages, and maintenance. Due to the up front costs, it can take a long time to show positive ROI. Even then, calculating the money saved is not easy.
Telemedicine: Every time an employee uses telemedicine instead of visiting a clinic or urgent care, the employer saves money. When implemented correctly, utilization should be high enough so the solution pays for itself. There are also savings associated with time savings, increased productivity, and employee satisfaction.
Which is right for you?
Onsite clinics and telemedicine programs both provide enormous value to the employer and employees. But which is right for your company? Both have benefits and drawbacks, but one is certainly easier to provide than the other. A telemedicine program that is well implemented and highly utilized can become a greatly valued benefit to the employee, at little cost and with big savings.