CLEARWATER – In July 2010, after seeing city employee health insurance costs skyrocket, Clearwater officials took the dramatic step of opening a health care clinic that would give free care to employees and their families covered by the city’s medical insurance plan. The assumption was that the $1.5 million annual cost of operating the clinic, which is managed by Care ATC, would be less than the cost of having those people receive their primary care from outside sources.
“We certainly have had our challenges over the past few years with budgets, finite resources and funding health insurance for our employees, which certainly is an important benefit for our employees,” Joseph Roseto, the city’s director of human resources, told the City Council at its Oct. 16 meeting. He then gave the council a PowerPoint presentation, the bottom line of which was that the clinic is meeting or exceeding expectations.
“The utilization has been fairly robust for our employees and their families,” he said. “We are diverting claims away from the (city’s Cigna) health insurance plan by people using the facility.”
During the study period of July 2010 through December 2012, the clinic treated an average of 907 patients per month and dispensed an average of 471 prescription medication orders per month.
During the first six months of 2010, members’ visits to specialists and to primary care physicians outside the clinic averaged 983 per month. But as members got used to going to the clinic instead of to an outside physician for primary care, that number dropped to an average of 595 per month during the first four months of this year.
In Clearwater, primary care claims submitted to Cigna, which covers health insurance costs not incurred at the clinic, dropped by 43 percent, or approximately 3,000 claims per year, between the opening of the clinic and the end of 2012. Visits to specialists, which are not available at the clinic, dropped by three percent in the same period as visits to the clinic headed off problems before they needed a specialist’s care.
For other cities covered by Cigna, most of which do not have clinics, the annual number of office visits jumped from an average of less than 10,000 to more than 12,250 in the same period.
The number of prescriptions covered by Clearwater’s Cigna plan dropped from 35,000 in 2009 to about 28,000 in 2012. But despite the lower number of prescriptions, their cost remained at approximately $2.75 million.
“Pharmacy costs are increasing despite clinic dispensing,” Roseto said. “Costs are being driven by higher specialty drug costs.”
The annual number of prescriptions submitted by Clearwater employees and their dependents has dropped from an average of 13.5 per member in 2009 to approximately 10 in 2012, after the clinic opened. Meanwhile, in other cities covered by Cigna, the average jumped from approximately 11.5 to more than 13.5. To put it another way, Clearwater has gone from 18 percent above the Cigna average to 11 percent below it.
The 497 emergency room visits made by persons covered by Clearwater’s insurance in 2012 were only slightly less than the 531 made in 2009, before the clinic opened. Roseto attributed that to the fact that the clinic is not open evenings or on weekends, and said that he hopes people will get in the habit of using the clinic instead of emergency rooms or urgent care clinics whenever possible.
The number of “catastrophic” claims over $50,000, of which 48.6 percent were caused by musculoskeletal problems, climbed by 6.5 percent between 2011 and 2012. The average cost of “catastrophic” claims, increased by 19 percent from 2010 to 2011 and by another 1.2 percent between 2011 and 2012.
In 2012, cancer, neurological, circulatory and musculoskeletal issues resulted in 94 claims totaling $5,989,953. Fifty-four percent of those claims were generated by just 3.5 percent of those covered under Clearwater’s plan.
Since it opened, the clinic has reduced claims by more than $7 million, resulting in a $3.7 million net saving to the city. It has also saved city employees and their families more than $1.5 million.