“Faced with crippling insurance premium hikes, the city of Arvada, Colorado, made a big decision to restructure its benefit offerings to be self-insured.” — The secret to a city’s big savings on employee healthcare, Employee Benefit News

When Mark Deven became the City Manager of Arvada, Colorado, his team was up against a serious healthcare problem. Chronic conditions were driving up premiums for city employees every year, with no end in sight. For Deven and the city, the solution to rising costs was an on-site clinic. Here’s how they did it.


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Self-funded with direct primary care

Arvada employs approximately 700 employees, many of whom suffer from age-related chronic conditions. With these preexisting conditions in mind, the city’s health insurance carrier wanted to raise premiums by 20% when Deven took over in 2011.

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The city decided to move to a self-funded plan to combat the issue of out-of-control costs. They partnered with an on-site clinic provider to provide all primary care and generic prescriptions at a fixed fee and gave employees the chance to switch. At the time, it felt like a radical move ...

But four years after the clinic opened, annual double-digit premium increases were drastically reduced to an average of less than 2%.

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Ownership solves rising cost problems

Getting into the healthcare business fixed rising costs for Arvada, in part because of their on-site clinic’s ability to provide highly personalized care. According to Deven, clinic ownership offers several advantages over a traditional health insurance plan.

Personalized care

Unlike traditional healthcare settings, on-site clinic providers aren’t incentivized to see as many patients as possible. Instead, providers focus on forming better relationships and developing more effective treatment plans.

Better data

Direct access to anonymous, population data allows clinic staff to conduct focused counseling initiatives aimed at improving the city’s most common chronic conditions, like hypertension.

Coordinated care

When an employee’s healthcare needs extend beyond the services of the clinic, the clinic coordinates that care. Providers work to find the best specialists for the best price, and conduct follow-up treatments to ensure ideal outcomes.

Deven estimates that 70% of city employees have made the switch and use the on-site clinic as their main source of all primary care. Looking ahead, he expects their cost savings to continue as even more employees join.

Want to learn more about the benefits of getting into the healthcare business? Check out our eBook: Employer's Guide to Healthcare.

 

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