Source: vcstar.com | August 14, 2009
Critics fear physicians will become beholden to employer
As a variation on the company doctor emerges at big companies across the country that are sponsoring on-site medical centers to provide employees with free or low-cost healthcare, an Oxnard berry grower has joined in.
Reiter Affiliated Companies of Oxnard adopted the novel approach at the start of the year when the berry grower canceled its more expensive health insurance to set up its own clinics. The move is a new twist on healthcare delivery that companies hope will save on costs and increase productivity.
“My personal belief is a happy employee is a healthy employee,” said Reiter’s Kryz Novotnaj, the man responsible for implementing and managing the clinics. He expects to see less stress, more productivity and better morale among employees.
A few hundred people have enrolled so far and the company has an outreach effort with doctors going out into the fields trying to enroll more employees. Depending on the season, Reiter employs 7,000 to 9,000 people companywide, and about 38 to 50 percent have enrolled.
“Enrollment started off slow,” Novotnaj said. “Culturally, there’s a trust factor and the employees have to trust.”
The company doctor has roots in the early 1900s when industrial accidents were frequent at railroad, lumber and mining companies. It fell out of favor in the 1930s and 1940s amid criticism by unions opposed to corporate paternalism that preferred traditional health insurance, and physicians’ groups concerned that company doctors were more interested in serving their employers’ needs than their patients’.
By law in California, companies cannot directly employ physicians, they may only contract with them, said Community Memorial Hospital Chief Medical Officer Stan Frochtzwajg.
“The California Medical Association has fought to keep physicians from being employed,” he said. “The feeling is, when you are employed there’s a natural sense that you kind of work for the company and are beholden to the company. Therefore, your loyalty could be questioned: Is it to the patients or to the company?”
The CMA wants to maintain the autonomy of the physician and is fighting several bills pending before the state legislature that seek to make changes to the law. The bills, according to CMA spokeswoman Amber Beck, would erode the quality of care in California hospitals, granting “control over treatment decisions to hospital CEOs and administrative staff who have different motivations and mandates than physicians.”
On-site medical clinics are removed by a “nebulous” line, Frochtzwajg said, and physicians as a group frown on them because they present a “slippery slope” that could eventually lead to doctors being employed directly by companies.
Turning medical care over to employers raises concern among worker advocates too, but California Rural Legal Assistance in Oxnard Directing Attorney Jeffrey Ponting said it’s better than what workers might get otherwise.
“What Reiter is doing here is providing a level of healthcare that is above and beyond what most employers in this country are doing and that’s commendable,” he said. “That’s a good thing.”
Screening harvesters for diabetes and other illnesses is “fantastic,” Ponting said. “But just on its face one might question the motivation behind certain decisions made by that clinic with respect to work-related injuries.
“If I had my druthers, an employer would provide health insurance that would allow an employee to seek out physician care at a private doctor who has absolutely no relationship to the employer, just because there is a concern that there may be a certain amount of bias in the way that a physician approaches a case.”
For the last decade, Reiter — a grower of raspberries, strawberries, blueberries and blackberries — has spent from $1.8 million to $1.9 million on insurance purchased from Western Growers, Novotnaj said. He said the health insurance had been “decent,” but didn’t cover much beyond preventative care.
Novotnaj had managed health clinics before, so he asked, “Is it possible to do that here at Reiter?”
Reiter teamed up with a Charlotte, N.C., company called HealthStat Inc., which manages the clinics, and at a price of $2.2 million set up four on-site clinics in Oxnard, Santa Maria, Salinas and Watsonville.
It’s more money than Reiter was paying for straight insurance, but Reiter says it’s getting more.
“If we had the same plan and services that we offer today we would be spending about $2.5 million,” he said.
Adopting on-site clinic delivering health services is typically done by large companies. Business forecaster Kiplinger believes on-site clinics work best for firms with 1,500 or more employees, but notes through its Business Resource Center that companies with as few as 300 employees can find it cost effective.
Other big companies using on-site clinics include BlueCross BlueShield of Tennessee, Walt Disney Parks and Resorts, Florida Power & Light Co. and Pepsi Bottling Group.
At Reiter, harvesters can enroll for $2 per week for an individual, $4 per week for an individual with a dependent and $6 a week for a family. There are no deductibles or co-pays.
“Everything’s free,” Novotnaj said.
Reiter’s Oxnard clinic is in a 1,400-square-foot leased space that’s equipped with a lobby, three examination rooms, two offices and a pharmacy. There’s one doctor on staff, two physician assistants, one nurse practitioner and two other physicians who work on a per diem basis filling in as needed.
Novotnaj emphasized that Reiter would not access employee health information, and stressed that privacy laws protect employees at the on-site clinics just as they do anywhere else.
“The employees of the clinics are HealthStat employees,” he said, “and we don’t get any information.”
He said, however, Reiter does have a “health advocate” within the company who will work with employees who authorize her to see their information. She is not permitted to share employee information with others in the company, he said.
HealthStat staffs about 300 clinics in 24 states, according to spokeswoman Susan C. Kinzler. Reiter is the first strictly agricultural company HealthStat has worked with.