A Prescription for Workers' Health

Employers Open In-House Clinics to Trim Costs and Boost Preventive Care

Columbus Giles checks Mike Orlov's blood pressure at Freddie Mac's health clinic for the 4,300 employees on its McLean campus. (By Lois Raimondo -- The Washington Post)

In a ritual of fall, employees throughout the region head for the office nurse to line up for their annual flu shot. They do the same at Freddie Mac, with some big differences. The shots are free, and they are only a small part of the company's efforts to keep its employees well and health costs down.

In 2004, Freddie opened a full-scale clinic at its McLean campus, run by a part-time doctor and a full-time nurse practitioner. It offers services that include free physicals, allergy shots, pregnancy tests and general consultations.

Beyond that, the company's 4,300 employees at headquarters can walk a few steps from their desks to get a prescription, work out in the company gym or discuss their diet with a nutritionist. If they select six healthy meals from the cafeteria, the seventh is free.

Freddie's clinic and emphasis on long-term wellness put it at the forefront of a fast-growing trend in corporate America in which companies are bringing health care in-house in an attempt to manage soaring costs and to increase productivity by cutting down on time away from desks for doctor visits.

A quarter of Fortune 1000 companies are expected to have on-site clinics by the end of next year, up from the 15 percent or so that have them now, according to David Beech, a health-care consultant at Watson Wyatt Worldwide Inc., a benefits consulting firm. The trend has caught on so quickly that there is little comparative data: Watson Wyatt didn't even ask the question until this year.

Higher health premiums have helped nourish the trend: Employer health premiums rose 7.7 percent in 2006, according to the 2006 Employer Health Benefits Survey by the Kaiser Family Foundation. That is slightly lower than previous years but still feels burdensome to companies and employees alike.

The Freddie clinic, which is operated by Whole Health Management Inc. of Cleveland under contract, costs $565,000 a year to run. An average visit to a personal physician, outside the clinic, costs $117. The company pays a flat annual fee for the clinic, which averages 17 visits a day, and estimates that it saved $686,000 in direct costs last year. With added productivity, Freddie Mac puts the savings at $900,000.

Freddie Mac, the nation's second-largest financier of home loans, had a profit of $2.1 billion for 2005 and reported $1.2 billion profit in its second quarter of this year. It is self-insured and spends about $30 million a year on health-care costs.

Whole Health is one of just a few companies that manage clinics and fitness centers. Jim Hummer, chief executive, argues that health care is usually an after-the-fact treatment, which often can be prevented. "We can help you achieve a healthier workforce that consumes less health-care services and is more productive," he tells potential clients.

Although the clinic system appears promising, not every employee will be motivated -- or able -- to use it. Those who did not work out at a gym before might still not join. Some employees might feel that their immediate supervisors disapprove of them leaving the office to tend to a cold or use the treadmill. Although some might appreciate the convenience, others might feel they're being trapped in their offices.

Hummer looks for companies that will promote the plan. "Our experience is if people understand the issues and choices, they will probably make good choices," he said.

Whole Health works mostly with larger companies, where scale can justify the cost. When Discovery Communications Inc. of Silver Spring first considered a clinic, Hummer thought the 1,500-person headquarters might not be big enough.