The ROI of an Onsite Clinic

Posted by Joe McErlane on Feb 21, 2019 8:44:00 AM

A well-designed onsite clinic is customized to the needs of your workforce at any given time. Therefore, it can be difficult to measure the ROI of an onsite clinic, and there is no universally agreed-upon method to do so within the industry. What we do know is that asking a couple of months in, "has this saved us money or cost us money" isn't necessarily the way to go.

An important step when implementing the clinic with your service provider is to evaluate the needs of your specific employee group at that moment in time and set some targeted goals. This will allow you to track progress around those goals and give you a measure of the clinic's successes, shortcomings, and ROI. You could also do an evaluation of past claims data and build some projections for what things would have looked like if you kept on with the status quo without your onsite clinic.

The ROI of an Onsite Clinic

NeoPath's ROI Formula

Here at NeoPath, our team will sit down with you to walk through projections and goals together. We also have an onsite clinic ROI formula that can help you visualize some potential projected costs and returns or savings surrounding your onsite clinic.

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We take the overall projected value of the clinic services, using standard CPT rates or average cost of services, and add to that the medication savings discovered through cutting out the costs of “dispensing” by ordering meds directly from a distributor. Finally, we add up the potential savings from having the ability to treat your employees in-house and keeping the referral rate to specialists down below the 20% industry average, our typical goal is a 5% referral rate. Add up those three numbers and it will give you the overall value of your onsite clinic. From that, subtract the actual clinic costs for all operations and supplies, and you'll be left with the clinic's ROI.

You can see an example of the formula below. All of the values provided are for demonstration purposes only.

Value of Onsite Clinic Services
(Ex: $500,000 annually)

+

Generic Medication Savings
(Ex: $100,000 annually)

+

Deferred Specialist Savings
(Ex: average referral rate in primary care is 20% but our referral rate is 5%, so for 1000 visits for the year with the average specialty visit costing $400.  This saves the client $60,000 on referrals annually.)

=

Total Clinical Value $660,000
Clinic Costs = $380,000
Total Clinical Value $660,000 – Clinic Costs $380,000 = $280,000 ROI

Download our onsite clinic implementation checklist to start considering all the steps to building your own onsite clinic.

Secondary Benefits or Soft ROI

Soft ROI refers to positive outcomes that are difficult to pin a specific dollar amount on. A big one for onsite clinics is the amount of time you save employees in having to take time off of work to go and see their medical providers.

owen-beard-722582-unsplash-minImagine for a second one of your employees needs to go visit their off-site doctor. The clinic is 40 minutes away from your office on a good traffic day. They will get there and with the wait, the visit will take around 2 hours. After that, they'll need to run to Target to pick up their prescription, and everyone knows how a "quick trip" to Target turns out. This is well beyond a half day of work that employee would need to take off, and could mean a full day depending on what time the appointment is scheduled. Now, with an onsite clinic, the same employee would simply walk down the hall, there would be nearly no wait, and they could get their prescription filled immediately after the appointment and/or pick it up after work. This could probably all be handled within the time of a lunch break, or essentially, it would save them hours of their time, and your company would get that back in gained productivity. That type of soft ROI is hard to measure in a onsite clinic but a well established benefit. 

Additional secondary benefits from onsite clinics are a reduction in the amount of sick days taken and increased productivity levels due to healthier employees. Furthermore, elevated employee satisfaction can turn can lead to less turnover. Another excellent benefit of offering an onsite clinic is it may give you an edge in recruiting high-level talent as people are looking for creative solutions to expensive healthcare costs, and it may also mean your happy employees will refer more people to come and work for such a great company that treats their employees so well.

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Topics: Onsite Clinics

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