Companies Not Fully Tapping Potential of On-Site Clinics

By Stephen Miller Apr 1, 2008

High health costs and a renewed focus on worker productivity have led an increasing number of companies to open on-site health centers in recent years. However, few companies fully tap the potential of these clinics, according to new research.

Nearly one-third of companies (29 percent) have or plan to have an on-site health center by 2009, up from 27 percent in 2006, according to joint research by consultancy Watson Wyatt and the nonprofit National Business Group on Health.

Watson Wyatt's 2007/2008 Onsite Health Center Surveya separate study of 84 companies with on-site health care centers, found that reducing medical costs was the chief reason given by 70 percent of companies that have opened a center since 2000 (so called "recent adopters"). Only 49 percent of companies that opened health centers before 2000 ("early adopters") did so because of cost; more early adopters (54 percent) opened a center to address occupational health.

“Although their primary motivation may be changing, more employers are operating on-site health centers as part of their overall health and productivity strategy,” says Marne Bell, senior health care consultant for Watson Wyatt. “Yet, surprisingly, many do not have a good handle on whether these centers are producing the desired return on investment.”

Nearly half (45 percent) of companies cite inadequate measures of performance as the top challenge in operating the centers. Integration of the health center with a company’s other health and productivity initiatives and data also remains a concern.

Measurement is top challenge for companies with on-site clinics


Employers cite among top challenges

Inadequate measures of performance.


Less than ideal location.


Lack of integration with health and productivity programs.


Lack of integration with local medical providers.


Lower than expected utilization.


Higher utilization for “self care.”


No challenges indicated.


The survey also found that among companies with on-site health centers:

Most do not link their data to medical claims (41 percent of recent adopters and 58 percent of early adopters).

Nearly one-fifth do not store their data electronically (19 percent of recent adopters and 16 percent of early adopters).

Only 39 percent integrate disease management programs with their on-site health centers, and only 30 percent connect them with a nursing hotline.

“As on-site health center services grow more comprehensive, linking the center with a company’s full range of health and productivity initiatives promotes more efficient care management and can create a competitive advantage,” observes Bell.

Among other survey highlights:

  • Preventive services such as immunizations and screenings are the most common offering among recent adopters of on-site health centers (81 percent). Mental health counseling is more than three times as common among early adopters (46 percent vs. 15 percent). Physical therapy is twice as prevalent among early adopters (44 percent vs. 22 percent). However, recent adopters are nearly twice as likely as early adopters to offer pharmacy benefits (44 percent vs. 23 percent). 
  • Nearly all (96 percent) of employers make on-site health center services available to employees enrolled in their health plan. Nearly three-quarters (71 percent) of companies provide services to part-time employees, even those not eligible to participate in the health plan. Only 25 percent of organizations offer clinic services to covered dependents and just one-fifth (20 percent) of retirees are offered access to the center.

Stephen Miller is manager of SHRM Online's Compensation & Benefits Focus Area.


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