Outsourcing Health Care Isn't Always Cheaper

From today's NY Times ("Company Clinics Cut Health Costs"): "Frustrated by runaway health costs, the nation’s largest employers are moving rapidly to open more primary care medical centers in their offices and factories as a way to offer convenient service and free or low-cost health care.

Within the last two years, companies including Toyota, Sprint Nextel, Florida Power and Light, Credit Suisse and Pepsi Bottling Group have opened or expanded on-site clinics. And many other employers are adding or planning to add even more clinics.

For employees, on-site clinics can mean faster medical attention and lower out-of-pocket costs, since visits are usually free or carry only a small co-payment. For employers, on-site clinics can mean gains in worker productivity and lower health-insurance outlays."

Seems like win-win. Companies save money on health care costs, employees have access to convenient on-site health care and spend less time away from work for appointments, etc. The traditional practice of "outsourcing" medical care with employer-paid insurance insulates both the employer and the employee from the true costs of medical care, and gives neither much direct control over medical costs. Employer-paid on-site medical care makes everybody more cost conscious.