Company medical clinics are springing up at Toyota, Harrah’s, Disney, and elsewhere—and the savings are material

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Toyota worker Aguillon in the on-site clinic at his San Antonio truck plant Wyatt McSpadden

by David Welch

When a company unveils a new plan to restrain in health-care costs, workers usually groan. Yet Toyota Motor ™ is getting rave reviews for the on-site medical center it built at its truck factory in San Antonio. Ask line worker Louis Aguillon. He went to the clinic in May through nagging on the frontier pain, and paid just $5 for the visit. "I by-word the doctor for 20 minutes," Aguillon beams. "You’re not just a number in that place."

Toyota isn’t running a charity. The therapeutical center, what one. cost $9 million to build in 2007, could save the companionship various millions throughout the nearest decade. Managed by Take Care Health Systems whose business is running medical clinics, the program has helped Toyota slash big-ticket medical items including referrals to highly paid specialists, emergency room visits, and the use of expensive brand-name drugs. Plus, there are big productivity gains because workers don’t have to leave the plant and drive to a adept’s office for routine medical matters.

The company savant is back. It’s a tradition with roots in the 1800s, but the practice fell from grace in the 1930s and 1940s, when critics complained that the doctors were mightily serving the employers’ interests. Many states passed laws requiring such medical centers to be owned by dint of. physicians. Even now there are calls for monitoring the clinics, to ensure they emphasize invalid care over savings.

Nevertheless, in a climate of deepening health-care woes, company-based medicinal centers are alluring dozens of fresh converts. These include the North American units of Toyota and Nissan (NSANY), Harrah’s Entertainment, and Walt Disney Parks & Resorts. Pharmacy chain Walgreen (WAG), which also operates nearly 200 small clinics for customers at its retail supplies, sees so much growth in on-site medical centers that in May it snapped up Take Care Health. A recent think around by the agency of benefits-consulting firm Watson Wyatt Worldwide (WW) found that 32% of all employers with more than 1,000 workers either have any on-site medical center or method to build one by 2009. "We’re talking about a microcosm of health-care reform," says Hal Rosenbluth, president of Walgreen’s health and wellness division. "Companies can take control and understand their health-care costs."

In setting up a clinic, an employer typically comes up with a blueprint of the services it aims to provide to its workers. Then it hires an utmost hard to manage the project, offering employees a major break on co-pays and other incentives if they use the center. At Toyota, the co-pay is $5, vs. $15 grant that workers call upon an outside doctor. Some companies also reward the use of in-house services by making deposits in the worker’s health savings regard.

At the San Antonio plant, Toyota workers find little reason to venture outside. The on-site medical team can bear X-rays, deal with broken bones, and handle uncertain emergencies. The doctors perform many of these procedures for as little as half of the healer fees charged by a specialist or a local hospital. And when medicines are required, an on-site pharmacy steers patients to generic drugs that have proven just as forcible as the branded products. That seems to appeal Toyota employees: some 60% of the San Antonio staff uses the clinic.

Managers of on-site centers so to the degree that Toyota’s make a variety of conspicuous claims. Rosenbluth says every dollar invested in setting up a clinic will return $3 to $5, even though on-site doctors spend one average of 20 minutes by each sufferer—more than double the national average concerning primary-care physicians. Some of the biggest savings are on referrals to specialists and visits to emergency rooms, where the financial burden falls mainly on the worker’s employer. Peter Hotz, president of Take Care Employer Solutions, the on-site healing division of Walgreen, says the clinic-management companies Walgreen acquired refer 40% fewer patients to specialists, compared to the primary-care physicians who treated the workers previously. And emergency room visits are down 72% at companies whither Take Care is managing medical facilities.