Before he left office, then-Montana Gov. Brian Schweitzer decided Montana’s 11,000 state workers, retirees and their dependents needed an employee health clinic. Before leaving office he had one created without consulting the legislature. For those of you who have not heard of the concept, it’s sort of like the school nurse, except there are doctors and real medical equipment involved. At most employee health clinics, physician visits are either free or involve no cost-sharing. Montana employees aren’t required to use the clinic; they can continue to see their own doctors with the normal cost-sharing.
The NPR article about the clinic claims the clinic has saved $1.5 million compared to before it was opened. The reason given: “Because there’s no markup, our cost per visit is lower than in a private fee-for-service environment.”
The argument about the clinics saving money because they lack a markup seems odd to me. In discussions I’ve had with entrepreneurs who run these types of clinics, they are touted as a money-saving because the medical staff is employed. What that means is the doctors do not gain from the number of procedures or type of care ordered. They are trained to practice medicine in an efficient manner. By efficient, I mean cheaply! For example, unnecessary MRIs are not ordered; medical staff can be required to being therapies with lower-cost drugs and not move to higher cost therapies unless a problem exists with the lower cost ones. Finally, the medical staff can be conditioned to avoid unnecessary specialist referrals. Basically, it’s a way to bribe enrollees into managed care in return for free office visits that require no cost-sharing — although that is not necessarily bad.
Many free-market advocates argue primary care should be paid entirely out of pocket; while many advocates of socialized medicine believe primary care (and all other care for that matter) should be free at the point of service. Regardless of where you come down in the issue, the clinic is popular with state employees and more clinics are planned.
Some private employers tout the clinics as a way to reduce absenteeism and bring down the likelihood of the perverse incentives that result from fee-for-service physician visits. Many employers do not want their workers to avoid the doctor due to the cost when they are sick. Whether this is an additional fringe benefit Montana state employees receive or a real money-saving tool is an interesting topic. I would be also be interested in hearing about the results when the organization sponsoring it is a for-profit company that has weighed the evidence solely on costs.