Focus, Health Care, and Human Resources

Lacks Enterprises opening on-site employee health care clinics

Five years in the making, the project has nothing to do with Obamacare.

November 8, 2013
| By Pete Daly |
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Lacks Enterprises opening on-site employee health care clinics
Key people involved in opening the Lacks Enterprises employee health clinics include, from left, Kristine Sapak of Priority Health, Jim Green of Lacks, Dr. Renae Davis and Mark Williams of CareATC. Photo by Pete Daly

(As seen on WZZM TV 13) While some employers in West Michigan in recent years closed their on-site health care clinics for employees, Lacks Enterprises in Kentwood is moving in the other direction.

Lacks, an automotive parts manufacturer with 2,800 employees at 18 plants in Greater Grand Rapids, plans to open one primary health care clinic for employees and their dependents by Jan. 1. Another is expected to open a week or two later, according to Jim Green, executive director of human resources at Lacks.

The clinics, at 826 Parchment Drive SE and 7101 Broadmoor Ave. SE, will be in close proximity to the majority of the company’s factories, which are in the 44th Street and 52nd Street areas.

“With those two sites, 80 percent of our work force will be within 20 minutes of a primary care office,” said Green. Employees and their dependents together total about 5,600 people covered by the Lacks health care insurance benefits.

CareATC of Oklahoma has been contracted by Lacks to set up the clinics and hire the staff for them, which will include one full-time primary care physician who already has been hired and a second who will work 30 hours a week.

Lacks, which has a self-insured health care plan for its employees, uses Blue Cross Blue Shield of Michigan to administer its claims. As of Jan. 1, that role will be taken over by Priority Health, and Lacks is moving to a high-deductible insurance plan with a health savings account for each employee. Single employees will have an annual deductible of $1,250, and those with dependents, $2,500.

The company did not divulge how much it is investing in the clinics, but it figures there will be a combination of cost savings and increased opportunities for healthier employees.

Green said the Lacks on-site clinics “will be like a regular family practice doctor’s office,” offering primary care and minor emergency care up to and including stitches. Employees and their dependents with more serious problems will be referred to physicians who are members of the Priority Health network.

Green said clinics for a company Lack’s size should be a minimum of 1,300 or 1,400 square feet. One of the sites Lacks is renting is a former chiropractic clinic of 2,300 square feet.

“We don’t need a lot of space in a waiting room,” said Green, because employees will be able to call ahead for an appointment and they won’t be kept waiting when they get there.

On the other hand, he said, because the clinic physicians are not being paid a separate fee for each thing they do, as are most physicians in private practice and hospitals, they are not under personal pressure to see as many patients as possible each day.

“If our doctors need a half hour to talk to you, they’ll spend a half hour to talk to you,” said Green, and yet the actual cost of seeing a doctor will be less at the on-site clinics.

When asked if the Affordable Care Act played any role in Lacks’ decision to open on-site clinics for employees, Green said, “We were going down this path before the Affordable Care Act started.”

Lacks launched a company-wide wellness and prevention program in 2010, offering incentives to employees who meet certain goals, such as weight loss, smoking cessation, regular check-ups and tests, and monitoring/managing chronic conditions such as diabetes.

Employees who demonstrate their commitment to the wellness program can receive up to 25 percent more in company contributions to their health savings account.

“Our diabetes levels have dropped in the last two years,” said Green. Employees who follow a Priority Health doctor’s advice on control of diabetes and pre-diabetes can receive free supplies and prescriptions from Lacks, he noted.

Green said the basic intent is “to keep the people who are healthy, healthy. And identify those with chronic problems” who can be helped with a plan of action.

“We want to keep health care affordable and accessible to our employees, with the highest quality of care,” said Green.

The wellness campaign and on-site clinics will benefit the company’s bottom line as well as the employees, because “we hire them to do a job. We want them here,” said Green.

The rapidly increasing cost of health care in the United States has put a heavy burden on employers, especially those in manufacturing, who are often competing against foreign businesses that don’t have to pay for their employees’ health care. Green said Lacks will spend close to $22 million on employee health care in 2013; health care is the fourth largest expense at Lacks, after payroll, plastics for its automotive products and chemicals.

Green said one West Michigan employer with an on-site clinic is Perrigo in Allegan, which was also mentioned by A. Michael La Penna, principal of the La Penna Group health care consultants in Grand Rapids.

La Penna wrote enthusiastically about the Lacks clinics this summer in his On-Site Clinic Newsletter, published on onsiteclinics.org. La Penna Group has helped major corporations, including Toyota in Texas and BP in Louisiana, set up extensive on-site clinics for employees.

“Johnson Controls in Holland had something like this. Steelcase had it for a while,” La Penna told the Business Journal. He added the Johnson Controls clinic was staffed by “fee-for-service physicians, which is the wrong model.” He said Steelcase had a “very well-defined clinic,” but he does not know what led to its closing.

“When you see a clinic like this which should have been successful and it hasn’t been, generally you’re looking at somebody that started it for the wrong reasons, or didn’t have the proper structure or the proper (care) providers. (Perhaps) they didn’t follow through with restructuring the benefit programs. There are many different reasons why these things would fail,” said La Penna.

“Badly done, this is no better than any other (corporate) project that is badly done. When properly done, these are very successful,” he added.

“We were delighted to see Lacks doing this,” said Le Penna. “We think it’s going to be something other employers will take a look at.”

La Penna said CareATC is “a well-regarded firm in the industry.” However, he noted that some health care systems in the U.S. are “very successful” at setting up and running on-site clinics for employers and “compete with vendors like CareATC.”

“Not here,” he added.

He noted that in Racine, Wis., the county and city governments as well as the school district have dedicated clinics run by Wheaton Franciscan Healthcare, which also operates six hospitals.

On-site clinics present several advantages to employers, according to Le Penna. One is employee access to primary care — even as the shortage of primary care physicians grows and appointments are harder to get.

Another is the efficiency of access: Employees can get in right away and their travel time is less, so their time away from work is generally less.

An on-site clinic can focus on issues specific to the employee population, such as carpal tunnel syndrome. An employer can also do a more thorough job of managing the health of employees by offering flu shots or specific types of screening.

Lacks Enterprises, like other automotive suppliers, suffered in the recession, with the employee count dropping to 1,700. Since the worst of the recession, however, sales have doubled.

Lacks is a privately held company, the fourth largest privately held employer in West Michigan, according to Green, and among the top 10 employers in the Grand Rapids region among all employers.

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