A South Georgia employer struggled with health care costs from year to year in a business with low profit margins. There were 1,800 employees with only 1,000 on the medical plan because of costs. Not only were the medical plan costs escalating but the company experienced loss of productivity due to illness.
A decision was made to bring in TransformHealthRx to establish and manage a clinic that would help with the high cost chronic individuals as well as provide general primary care, some Worker’s Compensation services and general things such as pre-employment physicals, CDLs, flu shots, etc.
In keeping track of the effectiveness of the clinic, the employer found the following:
- At the end of 2008, the company had 10 diabetics and 21 hypertensive employees enrolled in the unique TOP program and none had incurred any expenses outside the clinic.
- Instead of the average of $7,000 to $9,000 per year for a compliant Diabetic, the actual costs for those in the TOP program were $1,991 per year, which was not a claim against the medical plan.
- Over 12% of the total population participated in the TOP program, encouraged by a lack of copays, deductibles or out-of-pocket costs. This significantly increased compliance and accountability which was reflected in overall claim costs.
- While the average prescription cost for the medical plan was $40.31, the cost for Drugs in the clinic averaged only $4.
- The actual savings for the medicla plan the second year the clinic was in place was $888,873.
The Fee-for-service concept used by providers prevents true management of medical costs. This is especially true for those with chronic conditions since providers are not paid to keep patients well or make improvements in their personal risk levels. It encourages multiple visits and tests in order to increase revenues. Only after a fixed fee provider arrangement is integrated in a plan such as this one is there recognition of better care and lower costs.
The firm recognized that healthier employees are less a financial burden and more productive for the company.