As at many businesses, the rising cost of employee health care has been a worry for Winston Griffin, chief executive officer of Laurel Grocery Company.
The wholesaler in London supplies independent grocery stores in Kentucky and eight other states.
W.J. Chesnut and G.W. Griffin started the business in 1922. Winston Griffin is among four descendants of the founders who are the third generation to run the company. The company, which has about 250 employees and is self-insured, operates within a narrow profit margin on high volume. That means controlling costs is critical.
When Griffin looked at the numbers on health care costs in 2013, the trend was up, from just under $140 per employee per week in 2011 to more than $160 in 2012 and $180 in 2013.
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“We had to do something to try to reverse that trend,” Griffin said.
The solution Griffin turned to was creating a primary-care clinic at the company, called Connected Care.
Laurel Grocery pays KentuckyOne Health a flat annual fee for the services of Dr. Donnie Bunch one day a week and nurse-practitioner Robin House two days a week.
Griffin also hired Angie Patton, who has a degree in public health and had worked at KentuckyOne Health, full time to manage the clinic and work with employees on wellness programs.
Employees can go to the clinic free of charge for any service a primary-care physician provides, from flu shots to physicals, as well as for urgent care, and can get referrals for other services.
Spouses and dependents of employees on the company’s health plan also can use the clinic for free. In addition, the company provides more than 75 generic prescription drugs, such as blood-pressure and diabetes medication, to employees at cost through the clinic.
The goal of the clinic is to improve the health of the company’s workforce and, in doing so, cut health care costs.
Griffin talks about keeping conditions, such as high blood pressure, from becoming events — strokes and heart attacks, for instance — that come with big costs.
“If you can have someone walk into a doctor’s office, that’s far better than being wheeled into an emergency room,” Griffin said.
The clinic faced a big job.
In screenings in 2013, 80 percent of the employees had higher-than-normal blood pressure. Nearly 40 percent used tobacco, 55 percent had high cholesterol and 38 percent had no primary-care doctor to talk to them about improving their health.
The company opened Connected Care in June 2014. It is in a free-standing office with two exam rooms that Griffin had built near the company’s giant warehouse.
Services at the clinic are confidential, as at any doctor’s office, so Laurel Grocery does not get health information on individual employees who use it. However, the clinic does report overall numbers for tracking purposes.
Since the clinic opened, 148 employees have improved their blood pressure. Fifty-four lost weight, 75 improved their blood-sugar level and 20 quit using tobacco.
A consultant projected savings of about $1.2 million for Laurel Grocery because of the clinic. That is based on a calculation of costs avoided because of employees’ improved health measures.
“I’m beyond pleased,” Griffin said. “We are well ahead of what I thought we would be in two years.”
Eddie Goforth, 50, is one of the success stories. Goforth, a nine-year employee who works in the warehouse, was overweight, had high blood pressure and diabetes and rarely went to the doctor.
He started going to the company clinic because it was convenient, however, and Patton was able to suggest a diet and exercise program for him.
Goforth goes to the gym to lift weights and walks two miles at Levi Jackson State Park several times a week. He started eating more chicken, tuna and salad and quit soft drinks and snack cakes.
“Me and Little Debbie broke up,” he joked.
In a little over three months this year, he lost 35 pounds and five inches off his waist, reduced his blood pressure and cut his blood-sugar levels.
“I wouldn’t even have thought about it” Goforth said when asked about the likelihood that he would have tried to get healthier without the clinic.
“I think it’s a good thing,” he said. “It’s easy for me to stop in. You don’t have to wait forever at the doctor’s office.”
The company also has seen a benefit in less lost work time. Getting a physical at the clinic takes an hour, for instance, compared to four hours off-site, Griffin said.
Based solely on things that would have happened with or without the clinic — such as required physicals for truck drivers — Griffin calculated the program had saved $195,000 worth of work time in a year.
That productivity gain alone covers the fixed cost of the clinic, Griffin said.
Laurel Grocery’s clinic reflects a national trend.
The idea of providing health care at a company is not new, but the number of businesses with on-site clinics — and the range of services offered — has increased in recent years with the development of third-party vendors that make it easier for companies to provide health and wellness programs, said Larry Boress, executive director of the National Association of Worksite Health Centers.
About 30 percent of employers in the U.S. offer some form of health services to employees at the company, nearby or through mobile units, said Boress. That does not count fitness centers.
A number of factors are driving the increase, including efforts to hold down company health-care costs and improve access to care for employees, the need to recruit and keep employees and the potential for improved productivity.
“It clearly is being driven by productivity issues,” Boress said. “You’re improving health, keeping people on the job.”
Boress said many vendors believe a pool of 500 people is the minimum needed for an on-site clinic. Clinics can work at companies with fewer employees, however, consultants said.
One option is for several companies to work out a deal to share a clinic.
Mike La Penna, who consults for health providers on setting up programs at workplaces, said companies with fewer than 100 employees usually are advised to form a partnership with another company to support a clinic.
In addition to the other pluses, employees see on-site clinics as a valuable benefit, consultants said.
“We find employee satisfaction is very high with these clinics,” said La Penna, principal at The La Penna Group Inc.
La Penna has seen increased investor interest in work-site clinics, which will likely mean more companies will get them, he said.
Laurel Grocery’s clinic serves a population of about 500 employees, spouses and dependents.
Griffin and Patton cited several reasons the Connected Care clinic at Laurel Grocery works. Free services and convenience are major pluses. The clinic is a short walk from the warehouse, and there is typically little or no wait to get in.
Employees also get to spend a good amount of time with Bunch or House. That’s because with Laurel Grocery paying a flat fee, there is no reason to move patients through quickly.
“We tried to think of every reason you don’t want to go to the doctor and wipe it out,” Griffin said.
The company provides incentives for employees to get physicals and preventive examinations such as colonoscopies, and to improve their health measures. The reward for a physical, for instance, is $75 paid to an employee’s health savings account, and an improved blood-sugar level is worth $100.
“They get paid to stay healthy,” Patton said.
Griffin said Patton also is a key to the impact the clinic is having. Patton had done wellness programs for Laurel Grocery for several years before the clinic started, so she had good relationships with employees and spouses.
She follows up on test results, calls to check on employees if they’ve been sick, makes referrals for services outside the clinic and sends reminder cards when it’s time to schedule a physical.
“I’m just the little nudge to keep them in check, in a nice way,” Patton said.
The company pays 100 percent of the cost of a health-insurance policy for employees and spouses who take part in an annual physical.
If the clinic hadn’t helped cut costs, the company might have had to consider shifting part of the bill for insurance to employees, Griffin said.
Griffin didn’t want to do that at the family-owned business where some people have worked for 40 years.
“We’re all in this together,” Griffin said. “I’m more on the carrot side, not the stick.”
Besides, he said, having employees pay a portion of the cost wouldn’t have reduced the total cost. There’s one approach to do that, Griffin said.
“The only way is to get people healthier,” he said.