Cities’ insurance plans save money for public services

Nov 3, 2010

The article was published in the St. Petersburg Times on November 3, 2010:

Dunedin had plenty of reasons to resort to drastic measures to control its medical costs for city employees and their families: inflation in costs of 12 to 16 percent per year; a few big claims that caused costs to skyrocket; and a proposed 23 percent rate hike for 2011 from the city’s medical insurance provider.

So for the upcoming year, the city switched to a self-insurance plan. And last week, city commissioners began talking about partnering with Clearwater to provide a medical clinic for city employees. It’s a creative way to preserve more city revenue for public services, and it is an idea that is spreading in Florida.

Dunedin, like Clearwater, has been forced to lay off employees and watch every penny because of a big drop in city tax revenues tied to crashing property values. Clearwater also has made painful cuts in city services but still needed more reductions, so in July the city opened an employee medical clinic. The city contracted with a third party, CareATC of Tulsa, to run the clinic.

The clinic, situated in leased office space near Morton Plant Hospital south of downtown Clearwater, provides free care to the city’s 1,400 employees and their dependents who are covered by the city insurance plan. They still may choose to get care from their regular doctors, but if they use the clinic, there is no copay and many prescriptions also are free.

Clearwater officials expect the clinic to save at least $2 for every $1 the city invests in it. That potential for savings is what caught Dunedin’s attention.

Some 20 local governments in Florida have established, or are in the process of setting up, medical clinics for employees. They include the cities of Lakeland, Sarasota, Apopka, Ocoee and Port St. Lucie as well as Charlotte, Polk and Martin counties.

Ocoee reported $350,000 in savings in its first year. Port St. Lucie saw $1.5 million saved over a two-year period.

Dunedin and Clearwater officials learned the clinics are popular not only because they are free for patients, but also because they are convenient — usually near the workplace and not as crowded as regular medical facilities. Employees are allowed to visit the clinics during work hours without using sick time; and they have a heavy emphasis on illness prevention. Clearwater’s clinic reported 641 patient appointments in August, its first full month of operation.

At a recent workshop, Dunedin city commissioners got answers to some important questions:

• Who bears responsibility for medical malpractice? The third-party vendor, not the city.

• Does the city have any access to employee medical records? No.

• How do the clinics save the city money? By focusing on prevention and early disease intervention, reducing employee absenteeism, and diverting some employee medical care out of the much more expensive health care system.

Dunedin commissioners decided to go to the next step, which is negotiating a draft contract with Clearwater and getting solid numbers for costs and savings. A final decision is expected in early 2011.

Government’s primary role is to deliver services to the public. If creating employee medical clinics can save resources for that purpose, while still retaining health care benefits for employees, it’s an idea to embrace.

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