New class of health companies emerges as work-site health goes mainstream | MedCity News

Posted by Amelia Ehrens on Mar 26, 2012 10:31:00 AM

By Deanna Pogorelc | March 23, 2012

First he spent years leading a company that contributed to the nation’s high cholesterol problem, and now he’s launched his own company to help employers help their employees manage it.

Activate Healthcare LLC, founded in 2009 by former Steak ‘n Shake CEO Peter Dunn, is one of several young Indiana companies that provide on-site health-and-wellness clinics to a growing number of employers. The company just reported raising almost $1 million in equity financing.

High growth in the number of companies that provide these work-site health services over the past decade has ushered in a class of young companies like Activate that do the legwork of running on-site clinics.

According to a white paper from research firm Fuld + Co., the number of new on-site clinic vendors that entered the market between 2001 and 2009 was greater than the total number from the previous 40 years. And many of the vendors that the firm interviewed reported growth rates of at least 20 percent a year in demand for new clinics.

Expanding clientele

Fuld & Co. estimated in 2009 that the number of on-site medical clinics in the U.S. would grow 15 percent to 20 percent annually, reaching 7,000 employers by 2015.

In the near term, companies invest in part-time or full-time wellness and primary care services to reduce absence and lost time for medical appointments and illnesses. Over the long haul, companies hope wellness and disease-management programs will encourage adherence to medical regimens.

In Indiana, the clientele of vendors has expanded, especially in the area of public schools and local governments. Activate, for example, runs clinics for North Lawrence Community Schools and Monroe County government in southern Indiana, and last year, Fort Wayne Community Schools signed a $1.1 million annual contract to open two clinics managed by Novia CareClinics.

A long-term relationship

The decision to move forward with a clinic is a high-risk, high-reward scenario, as Scott estimates the initial investment for an average-sized clinic to be at least $100,000. Many of the companies who undergo the analysis don’t end up with clinics on their site, possibly because of the significant investment required.

“Our clinic is three exam rooms, a lab room, a waiting area, some office space for staff and the pharmacy — it’s about 1,600 to 2,000 square feet,” said Kyle Hamilton, president and general manager of the Offertory Solutions Division at Our Sunday Visitor, a Catholic publishing company in Huntington that opened its clinic to 320 employees and their dependents in November 2011. “If we invest $100,000 in this, the last thing you want to do is pull back.”

Value proposition

The surge in workplace clinics has the potential to boost business in other health sectors, too. For example, many employers provide disease-management services and pay for their clinics to stock the most frequently prescribed medications for distribution at no cost to the employee. That means that if a diabetic patient is screened at the clinic, he can have his prescriptions refilled monthly at no extra cost to him. Improved compliance is good for the employee, the employer and — here’s the big one — the drug manufacturer.

As with anything in healthcare — especially in the wake of major reform — the future of these clinics and the companies that run them is uncertain. None of the vendors mentioned in this story responded to requests for interviews about the growth of their businesses, but it appears that an overall shift in the function and reputation of work-site health programs has taken place that may help keep them afloat.

Full Article here:

Topics: Healthcare, Life Cycle Management, Life Sciences

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