As Obamacare is implemented, employers and insurers will need to adjust, creating even more urgency for the need to control health care costs.
That urgency could be a boon for alternative health care and wellness delivery models with proven track records of success.
One of those alternative models is QuadMed LLC, the health care subsidiary formed by Sussex-based Quad/Graphics Inc. in 1990.
“We think one of the more important benefits going into the future will be for employers to provide access to primary care and physician services onsite, particularly in a market where there is a shortage of primary care physicians and more demand for primary care,” said Tim Dickman, president of QuadMed.
QuadMed was established by Harry Quadracci, the late founder of the printing company who was fed up with skyrocketing health care costs and believed he could find a better way.
That way was to provide onsite primary health care and wellness to employees in the workplace. When Quad/Graphics employees need to see their doctor, they walk to the clinic at their workplace, their condition is usually quickly diagnosed and treatments, including prescriptions, are efficiently delivered. The employee need not schedule off-campus appointments and leave work to drive to a clinic across town.
According to Quad/Graphics’ data for QuadMed collected over the past two decades, its health care costs are consistently about a third lower than comparable companies when adjusted for workforce demographics.
“My father had kind of looked at the cost of health care and the quality and was frustrated with the increases back then,” said Joel Quadracci, who has succeeded his father as the president of Quad/Graphics. “People talk about it now, but back then he was frustrated with it. So it’s that simple. We just said we have the volume, and I’m not happy with what I’m paying on the outside. Let’s see if we can control some of those costs.
“It’s about lowering the overall cost of health care through preventative medicine and through disease management. We like to call ourselves a 22-year-old startup because we’re always looking for ways to make the patient experience better,” Quadracci said.
What started as a small onsite primary health care clinic at Quad/Graphics’ Pewaukee plant has evolved into a national health care operation. Today, QuadMed serves 16 companies through 33 onsite health centers in 14 states.
“We offer up a great solution for large companies and do something that employees like,” Dickman said. “So we’re not about taking anything away. We’re about adding service to employees, and it’s one of the few things that you can say today in health care that actually truly does lower cost.”
QuadMed began operating an on-site clinic for Milwaukee-based Briggs & Stratton Corp. in January of 2003.
Briggs & Stratton’s decision to construct the clinic stemmed from its rising health care costs and the company’s employee demographics, according to Jeffrey Mahloch, vice president of human resources at Briggs & Stratton.
Employers across the country are taking note of the QuadMed model.
“I think the whole health care debate in Washington really helped put a spotlight on health care for CEOs, and we noticed that the C-Suites started to understand that there’s something more here,” Quadracci said. “It’s a longer-term approach they have to take to it, and that’s when the conversations started heating up. Everyone wanted to look at bringing health care in house, and therefore we were able to kind of sell them on the true model of what QuadMed is, which worked for Quad for 20-plus years.”
Proven results
A 2011 independent study conducted by the Government Finance Officer Association concluded that on-site clinics can provide health care services more cheaply than commercial providers. Furthermore, because an on-site clinic is more accessible than commercial providers, employees usually seek treatment for minor ailments before they become major conditions that are more costly to treat, according to the study.
The research found that on-site clinics also generate a substantial return on investment for employers that provide them, with returns ranging from $1.60 to $4 saved for every dollar invested, according to the report.
Quad/Graphics spends more on primary care per patient than the average employer, but makes up the difference in lower costs for fewer emergency department visits and hospitalizations, according to a study by the Commonwealth Fund. In 2008, for example, Quad/Graphics’ outpatient visit rate was 15 percent higher for employees and family members in Wisconsin compared with the Midwest norm (434.2 vs. 377.5 visits per 100 lives), while its inpatient visit rate was more than 9 percent lower (55.7 vs. 61.5 per 1,000 lives), the study concluded.
Aside from the proven results, the convenience of care for employees is a key attribute of the QuadMed model, Quadracci said.
“Access is really an important part of good health care,” Quadracci said.
On average, QuadMed patients spend five minutes in the waiting room, Quadracci said.
The company likes to see empty waiting rooms, Dickman said.
“We don’t want people sitting in the waiting room, and we’re highly focused on getting people back to work,” Dickman said.
QuadMed also builds a buffer into its appointment scheduling to allow for drop-in patients, which helps the company keep employees away from the emergency room on weekends.
“So, we try and make it easy so they know come Monday morning they can show up and they can get to see a doctor if they’re sick,” Quadracci said.
At Briggs & Stratton’s QuadMed clinic, employees can call the clinic during hours of operation and schedule an appointment generally that same day, Mahloch said. The clinic, which is housed at the company’s plant near 124th Street and Burleigh Street in Milwaukee, provides care for about 60 to 70 percent of the company’s 1,600 employees in the area.
QuadMed also operates a clinic at Stihl Inc.’s corporate headquarters in Virginia Beach, Va. QuadMed worked to accommodate the manufacturer’s third shift employee needs by implementing online appointment scheduling and adjusting the clinic’s hours of operation.
“It wasn’t just a canned package,” said Stan Redwood, manager of benefit services at Stihl. “They were willing to have their model fit our company’s needs.”
Low co-pays at each QuadMed clinic are meant to encourage employees to visit the clinic when necessary, thereby enhancing their wellness.
“We don’t want to prevent you from seeing the doctor,” Quadracci said. “That’s not where we save money. We save money by making sure that you are seeing the doctor.”
Patients at Stihl owe a $10 co-pay for urgent care and general care but do not have to pay a co-pay for visits related to prevention and wellness care. Co-pays for clinic visits at Briggs & Stratton cost employees $5 and even cover lab work facilitated during the office visit.
“It’s a win-win for the company and for the employees,” Mahloch said. “You take that variable cost of going to the market for health care, and we turn it into a fixed cost that we can really budget well and provide quality service for our employees.”
Thanks to QuadMed initiatives, Briggs & Stratton has been able to reduce the rate of its health care increases, Mahloch said. In some years, the company’s rate of increase of health care costs has been half the overall average rate hikes.
Fixed costs
With fixed costs, which include salaries, the costs of the facility and expenses of the clinic, Briggs & Stratton has an accurate idea of its health care costs from month to month and can better budget and forecast expenses, Mahloch said.
QuadMed reports upwards of 25 percent reductions in medical costs experienced by the clients it serves due to savings with reduced urgent care visits, reduced emergency room visits and reduced inpatient hospitalizations because of management of chronic conditions.
According to Dickman, QuadMed often puts financial guarantees in place when implementing a clinic and has been able to deliver on those guarantees in nearly all cases.
QuadMed clinics, which are typically open to employees and families, also offer health screenings and supplementary services such as wellness programs and specialty care programs, including cardiology, orthopedics, dermatology and general surgery. The QuadMed model surrounds employees with health-minded opportunities in order to build a culture of wellness, encourage employees to take charge of maintaining their health and customize health care for individual patients, Quadracci said.
“That’s what primary care really is about,” Quadracci said. “It’s tailoring a primary care plan specific to the patient.”
The relationship between the primary physician and the patient is a key component of reducing health care costs, according to Quadracci.
“That’s all important to a primary care physician – to understand your family lineage but then also understand your lifestyle and follow you as you go along,” Quadcracci said. “It’s a true sort of relationship, one that is underappreciated in health care. And that’s part of why the whole system is broken. We’re not relying enough on the primary care physician as that quarterback to kind of call the shots.”
Not all health care models allow the primary care physician to spend enough time with the patient, he said.
“A lot of places for something serious you might see the doctor for five minutes, then he’ll go order a series of tests and you get hit with some big costs,” Quadracci said.
QuadMed physicians at Stihl take a holistic approach to health care.
“They’re getting more face time with a provider who is digging into that holistic approach to give them better long-term care,” Redwood said.
QuadMed involves its clients in the hiring process of primary health care providers to ensure that the providers will be suitable for a particular client’s work culture.
“They’re really onsite there, and they’re part of the whole fabric of the environment, so we want to make sure we get the right cultural fit,” Dickman said.
After QuadMed conducted the initial search to staff physicians at Briggs & Stratton’s onsite clinic, executives from Briggs & Stratton had a chance to interview recommended candidates before a commitment was made to hire them.
Three of the staff hired at the establishment of the clinic have stayed for 10 years, according to Mahloch.
“I think they like the atmosphere, the facility,” Mahloch said. “The pace of the facility is steady, but it’s regular. They’re busy all the time. They have input into how the clinic operates. They get along very well with each other, which I think is reflected in the patients’ reaction.”
