Picture this: A workplace where healthcare is just steps away, where employees can access quality care without the hassle of long wait times or expensive co-pays. Sounds ideal, right? That's the promise of employee health centers. But for many organizations, the journey to this healthcare utopia hits a roadblock right at the start – the initial capital investment.
How Much Does it Cost to Start an On-Site Clinic?
Start-up costs for a clinic can vary widely. A lightly staffed in-house facility with limited hours might need around $30,000, while a stand-alone facility with extended hours could cost $1 million or more. These costs cover the building, medical equipment, information technology, and other expenses (Schilling).
Understanding the Investment and Its Potential
While the upfront costs of setting up an employee health center can be daunting, the potential for long-term savings is significant. According to a Business Group on Health survey, more than 50 percent of large employers offer at least one on-site or near-site clinic (Business Group on Health, 2023) Why? Because the investment in on-site health centers delivers impressive returns.
PwC projects an 8% year-on-year medical cost trend in 2025 for the Group market, driven by inflation, prescription drug spending, and behavioral health utilization (PwC). This financial strain makes solutions like on-site clinics more important than ever. CareATC’s client data shows that members who engaged with CareATC on-site health centers cost 25% less than non-engaged members. Drivers for the cost difference include:
- 38% less ER utilization
- 64% fewer hospital admissions
- 67% fewer hospital bed days
Plus, employees who engaged with these centers spent 33% less out of pocket and cost employers $2,209 less in overall health plan costs (CareATC, 2021).
Conducting a Thorough Cost-Benefit Analysis
Before embarking on the implementation journey, organizations should conduct a comprehensive cost-benefit analysis. This analysis should consider both short-term costs and long-term savings. Key factors to include are:
- Reduced healthcare claims
- Decreased absenteeism and presenteeism
- Improved productivity
- Enhanced employee satisfaction and retention
Phased Implementation Approach
To manage upfront costs more effectively, consider a phased implementation approach. This allows organizations to spread the investment over time while gradually expanding services. A typical phased approach might look like this:
- Phase 1: Primary care and urgent care services
- Phase 2: Addition of pharmacy and lab services
- Phase 3: Expansion to include wellness programs and chronic disease management
- Phase 4: Integration of behavioral health and specialty care services
The Path Forward
Implementing an employee health center is like planting a tree. The best time to do it was years ago, but the second-best time is now. While the initial investment might seem like a hurdle, the long-term benefits — both financial and in terms of employee well-being — are too significant to ignore. Contact CareATC today for a custom quote and expert guidance on implementing a solution tailored to your organization's needs and budget.
References
Business Group on Health. (2023, August 22). 2024 Large Employer Health Care Strategy Survey.
https://www.businessgrouphealth.org/resources/2024-large-employer-health-care-strategy-survey-intro
CareATC. (2021, August 5). Primary Care Utilization Reduces Healthcare Costs by 25% Per Employee. https://www.careatc.com/primary-care-utilization-reduces-healthcare-costs-by-25-per-employee
PricewaterhouseCoopers (PwC). Medical cost trend: Behind the numbers 2025. PwC.
https://pwc.com/us/en/industries/health-industries/library/behind-the-numbers.html
Schilling, B. Is an On-Site Clinic Right for Your Firm? The Commonwealth Fund.
https://www.commonwealthfund.org/publications/newsletter-article/site-clinic-right-your-firm
