Vero Beach employee clinic seen unlikely to cut health costs
The City of Vero Beach, looking for ways to save on the cost of providing healthcare benefits to its 507 employees and their families, is considering spending more than a half million dollars to create its own medical clinic that would be open only 24 hours a week — and which employees would not have to use anyway.
Human Resource Director Robert Anderson says once fully operational, the clinic could save the city $268,000 by reducing the city’s expenditure to cover office and emergency room visits, drug testing and employee physicals – assuming all the city employees and their families use it.
That, however, would appear to be an incredibly optimistic assumption. In Port St. Lucie, which runs a clinic for its 1,250 employees that is open longer hours than those proposed for the Vero Beach clinic, only about a quarter of eligible employees and their families use the free service.
Vero Beach currently self-insures its 507 employees, and pays a fee to Blue Cross Blue Shield to administer its healthcare plan. While the city’s costs for selfinsurance might be reduced if employees enthusiastically embraced a new municipal clinic, or were required to use it, the city’s expenditures would likely actually increase if most employees opt to see their own family doctors.
“Employees would still be free to see their own doctors and would not be forced to use the city-run clinic,” said City of Vero Beach Risk Manager Barbara Morey. “It’s a free country and the employees have their own choice whether they would want to go to the clinic or their own private physician. It would be voluntary.”
One incentive to Vero Beach employees to use the proposed clinic is they would not have to make any payment, even if they have not reached their annual deductible, presently set at $200 for individuals and $400 for families.
The city also points to the added benefit to workers of having to spend less time in waiting rooms while on the job.
“Sometimes our employees have to wait three hours to see a doctor,” said Morey. “They’ll call in and say it took them half the day to get to see the doctor. This way, we will have our own clinic, with doctors and nurses. We anticipate that there will be little to no down time at all for our employees. They won’t have to wait.”
Whether city employees will be as excited as Morey about the possibility of getting back to their jobs more quickly remains an open question. The proposal also fails to address how city employees may feel about how a clinic set up by their employer would handle patient confidentiality issues.
The idea of a clinic for municipal employees began to move forward several months ago after Morey attended a meeting at the Florida League of Cities, where she heard a presentation by the Gehring Group on the benefit of cities running their own clinics.
“It was a great presentation and I thought it was a darn good idea,” Morey said. “The Gehring Group is our agent of record for health, property and liability and they are a great asset. They are paid a commission through the insurance companies for the policies they assist us in purchasing.
“As a part of their service to the city, they advise us on plan changes, new benefits in the industry geared towards saving the city and employees money. The clinic is a concept we started talking about several years ago and put on the back burner until it had been tried by other entities to see how it worked.”
The Gehring Group presentation to the City Council, which projected that it would cost the city $583,213 to launch and run the clinic for a year, suggested that savings would occur from reducing the city’s expenditures on office and emergency room visits, drug testing and employee physicals.
But the savings figure was derived from 100 percent employee and family use of the new city medical clinic.
In the presentation, it was assumed the city employees and their family members would make 4,072 visits to the clinic each year — about eight clinic visits a year per family — to achieve the projected savings.
That projection may be very much on the high side, if the Port St. Lucie experience is any guide.
“The clinic is utilized by 25 to 30 percent of our workforce, but we feel it is still a savings to the city of Port St. Lucie because the clinic dispenses generic prescriptions,“ said Sharon Park, assistant human resource director.
Vero Beach has yet to send out a questionnaire to full-time employees about their desire to use a clinic instead of their regular doctor, and without a track record from a like-sized city, it seems questionable whether consultants can accurately project actual clinic utilization.
“Most people like to go to their personal physician whom they trust and who is not hired by a company,” a medical staff head hunter told me.
The numbers presented to the City Council show the staff of the clinic and the physicians it would retain being paid a total of $155,000 in the first year, while the Gehring Group would be paid a consulting fee of $179,676 to hire them and administer the clinic.
Should a Vero Beach city employee choose to go to his own physician, then the city’s regular benefits package would kick into place.
“Each employee will have his or her choice whether to go to their own personal physician and file Blue Cross Blue Shield insurance, or go to the city clinic where they won’t have to pay anything, no deductible at all,” said Morey.
At least one City Council member does not appear in favor of the city creating a clinic solely for municipal employees. Council member Debra Fromang requested that Human Resource Director Anderson ask the county and the school board if they have any interest in combining for a county-wide health clinic.
“We know all about this, but I think we need to revisit this idea in a few months and see if the county and the school board would be interested in partnering with us,” she said “It doesn’t seem feasible for us to do something like this on our own.”