Smaller Employers Weigh a Big-Company Fix for Scarce Primary Care: Their Own Clinics

Published

2 years ago

October 30, 2023

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With his companys health costs soaring and his workers struggling with high blood pressure and other medical conditions, Winston Griffin, CEO of Laurel Grocery Co., knew his company had to do something.

So the London, Kentucky, wholesaler opened a health clinic.

This story also ran on USA Today. It can be republished for free.

Our margins are tiny, so every expense is important, Griffin said. The clinic, he said, has helped lower the companys health costs and reduce employee sick leave.

Large employers have run clinics for decades. At Laurel Grocerys in-house clinic, workers can get checkups, blood tests, and other primary care needs fulfilled free, without leaving the workplace. But Griffins move is notable because of his companys size: only about 250 employees.

Nationwide, a modest number of small- and medium-size employers have set up their own health clinics at or near their workplaces, according to surveys and interviews with corporate vendors and consulting firms that help employers open such facilities.

Improving employee health and lowering health costs are among the main advantages employers cite for running clinics. But some companies also say theyre helping to blunt the nations shortage of primary care doctors and eliminate the hassle of finding and getting care.

Why did we do this? So my employees would not drop dead on the floor, Griffin said. We had such an unhealthy workforce, and drastic times called for drastic measures.

KFFs annual survey of workplace benefits this year found that about 20% of employers who offer health insurance and have 200 to 999 workers provide on-site or near-site clinics. That compares with 30% or better for employers with 1,000 or more workers.

Those figures have been relatively steady in recent years, surveys show. Email Sign-Up

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And U.S. employers reported the biggest increase this year in annual family premiums for their sponsored health plans in a decade an average jump of 7% to nearly $24,000, according to the KFF survey, released Oct. 18. That spike may intensify interest among business leaders in curbing underlying health costs, including by exploring delivering care at workplaces.

Employers dont require their workers to use their clinics but typically provide incentives such as free or reduced copayments. Griffin offered employees $150 to get a physical at the clinic; 90% took advantage of the deal, he said.

Employer clinics could alleviate the rising demand for primary care. A far lower proportion of U.S. doctors are generalists than in other advanced economies, according to data compiled by the Peterson Center on Healthcare and KFF.

For patients, frustrating wait times are one result. A recent survey by a physician staffing firm found it now takes an average of three weeks to get in to see a family doctor.

In 2022, Franklin International, a manufacturer of adhesives in Columbus, Ohio, began offering its 450 workers the option to use local primary care clinics managed by Marathon Health, one of about a dozen companies that set up on-site or near-site health centers for employers.

Franklin employees pay nothing at the clinics compared with a $50 copayment to see an outside doctor in their insurance network. So far about 30% of its workers use the Marathon clinics, said Doug Reys, Franklins manager of compensation benefits.

We heard about the difficulty employees had to get in to a doctor, he said. They would call providers who said they were accepting new patients but would still wait months for an appointment, he added.

At the Marathon clinics which are shared by other employers workers now can see a provider within a day, he said.

Thats good for employees and for the companys recruiting efforts. It is a good benefit to say you can get free primary care, Reys said.

Not all employers that have explored opening their own clinics have seen the value. In 2020, the agency that oversees health benefits for Wisconsin state employees opted against the on-site model after a review of experiences by similar agencies in Indiana and Kentucky found it didnt save money or constrain health insurance premiums.

Kara Speer, national practice leader for consulting firm WTW, said potential cost savings from employer-run clinics can take years to accrue as employees shift from pricier hospital emergency rooms and urgent care clinics. And it can be difficult to measure whether clinics control costs by improving workers health through preventive screenings and checkups, she said.

Katie Vicars, a senior vice president at Marathon Health, said about 25% of its 250 clients are firms with fewer than 500 people. She said Marathons clinics help drive down costs and help employees get easier access to doctors who spend more time with them during appointments. Her company helps employers manage workers with chronic diseases better and redirects care from urgent care centers and ERs, she said.

Hospitals have also sought to get into the business of running on-site clinics for employers, but some potential clients question whether those health systems have incentives to funnel workers to their own hospitals and specialists.

At Laurel Grocery, Griffin said he knows many of his employees dont regularly exercise and have poor diets a reflection of the overall population in the region. Health screenings performed by a local hospital over the years found many residents with high cholesterol and high blood pressure. Nothing tended to change, he said.

Laurel Grocery contracts with a local hospital for about $100,000 a year to manage its clinic, including having a physician assistant on-site three days a week. Laurel Grocery does not have access to any employee health records.

He said the clinic has saved money by reducing unnecessary ER use and reducing hospitalizations. Its been way more successful than I thought it would be, he said.

The clinic is about a three-minute walk from Kip Faulhabers office. Faulhaber, a senior vice president at Laurel Grocer who is 73, said he goes in every week for a vitamin B12 shot to treat a deficiency. He also turns to the clinic for an annual physical, vaccinations, and when he has a sinus infection but doesnt want to wait several days to see his regular physician.

This is more than convenient, he said.

[Correction: This article was updated at 4 p.m. ET on Oct. 27, 2023, to correct the name of Marathon Healths Katie Vicars.]

Phil Galewitz: pgalewitz@kff.org, @philgalewitz Related Topics Health Industry Insurance States Copayments Investigation Kentucky Ohio Primary Care Disrupted Wisconsin Contact Us Submit a Story Tip

Technology

Meta says China retailers are reducing digital ad spend

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2 hours ago

April 30, 2025

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Meta says China retailers are reducing digital ad spend

This photo illustration created on Jan. 7, 2025, in Washington, D.C., shows an image of Mark Zuckerberg, CEO of Meta, and an image of the Meta logo.

Drew Angerer | AFP | Getty Images

Chinese online retailers have cut back their spending on Facebook and Instagram ads in reaction to President Donald Trump’s tough trade policy with the country.

Meta’s finance chief Susan Li said Wednesday that “Asia-based e-commerce exporters” have reduced their spending with the social media company. It’s likely those firms did so as they prepare for the de minimis trade loophole ending this Friday, Li said during a first-quarter earnings call.

“A portion of that spend has been redirected to other markets, but overall spend for those advertisers is below the levels prior to April,” Li said.

Trump in early April signed an executive order to end the de minimis trade exemptions for Chinese imports, which benefited online retailers like Temu and Shein. Analysts have said they believe that Temu and Shein make up the bulk of Meta’s 2024 China-related sales of $18.35 billion.

Meta’s advertising sales in the Asia-Pacific region were $8.22 billion for the first quarter, the company said. That was below Wall Street projections of $8.42 billion.

Li said that Meta’s second-quarter revenue would come in the range of $42.5 billion to $45.5 billion, which was in line with analysts expectations of $44.03 billion.

“It’s very early, hard to know how things will play out over the quarter, and certainly, harder to know that for the rest of the year,” Li said.

This echoes what Google said last week during its earnings call, warning that it expects headwinds to its advertising business, particularly from the Asia-Pacific region. Similarly, Snap on Tuesday said it had “experienced headwinds to start the current quarter.”

Trump’s China tariffs of 145% also appear to be impacting Meta’s Reality Labs unit, which creates virtual reality and augmented reality devices.

Reality Labs had an operating loss of $4.2 billion while bringing in $412 million in sales during the first quarter.

Meta said its 2025 capital expenditures will come in the range of $64 billion to $72 billion, which is higher than its prior outlook of $60 billion to $65 billion.

“This updated outlook reflects additional data center investments to support our artificial intelligence efforts as well as an increase in the expected cost of infrastructure hardware,” the company said in the earnings release.

Regarding the higher costs of infrastructure hardware, Li told analysts that it’s the result of “suppliers who source from countries around the world.” The higher cost of infrastructure hardware and “higher expected Reality Labs cost of goods sold” has “partially offset” Meta’s lowered projected range for its 2025 total expense, she said.

“There’s just a lot of uncertainty around this, given the ongoing trade discussions,” said Li, adding that Meta is modifying its supply chain as a result.

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Technology

Microsoft passes its first test on U.S. tariffs with limited portfolio exposure

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2 hours ago

April 30, 2025

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Microsoft passes its first test on U.S. tariffs with limited portfolio exposure

Microsoft CEO Satya Nadella speaks during an event commemorating the 50th anniversary of the company at Microsoft headquarters in Redmond, Washington, on April 4, 2025. Microsoft Corp., determined to hold its ground in artificial intelligence, will soon let consumers tailor the Copilot digital assistant to their own needs.

David Ryder | Bloomberg | Getty Images

President Trump’s tariffs have dominated global news headlines for weeks. During Microsoft‘s earnings call with investors on Wednesday, though, tariffs came up only once, during prepared remarks.

The reference from Amy Hood, Microsoft’s finance chief, had to do with sales of personal computers and Windows operating system licenses to other PC makers.

“Windows OEM and devices revenue increased 3% year over year, ahead of expectations, as tariff uncertainty through the quarter resulted in inventory levels that remained elevated,” Hood said.

While Microsoft does sell Surface PCs and Xbox video game consoles, impact will likely be less direct than it will be on companies that sell physical products.

Still, Microsoft does stand to see second-order effects, like other software vendors. Its clients might feel the effects of higher prices on goods imported into the U.S. and choose to soften their spending, and Microsoft does purchase equipment from other countries.

The Redmond, Washington-based company is investing heavily to buy and install the necessary Nvidia graphics processing units across the world to power OpenAI’s ChatGPT and other artificial intelligence products.

If anything, software might help companies respond in the event that their costs go up because of tariffs, CEO Satya Nadella said on the conference call

“I think if you sort of buy into the argument that software is the most malleable resource we have to fight any type of inflationary pressure or any type of growth pressure where you need to do more with less, I think we can be super helpful in that,” he said. “And so if anything, we would probably have more of that mindset is, how do we make sure we are helping our customers, and then, of course, we’ll look to
share gains.”

The company sells a slew of AI products, including the GitHub Copilot that spits out source code suggestions for developers and the Microsoft 365 Copilot assistant that answers questions in Excel, Teams and other productivity apps.

Microsoft shares traded up about 8% in extended trading after the call. The company reported higher revenue and earnings than analysts had predicted and issued an upbeat forecast.

WATCH: Corporate margins will be pressured as a results of tariffs, says Morgan Stanley’s Guerra

Technology

Court finds Apple, executive lied under oath in Epic Games trial

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2 hours ago

April 30, 2025

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Court finds Apple, executive lied under oath in Epic Games trial

Customers walk past an Apple logo inside of an Apple store at Grand Central Station in New York on Aug 1, 2018.

Lucas Jackson | Reuters

Apple willfully violated a 2021 injunction that came out of the Epic Games case, Judge Yvonne Gonzalez Rogers said in a court filing on Wednesday.

She wrote that Apple Vice President of Finance Alex Roman “outright lied” to the court about when Apple had decided to levy a 27% fee on some purchases linked to its App Store.

“Neither Apple, nor its counsel, corrected the, now obvious, lies,” Rogers wrote, saying that she considers Apple to “to have adopted the lies and misrepresentations to this Court.”

Rogers added that she referred the matter to U.S. attorneys to investigate whether to pursue criminal contempt proceedings on both Roman and Apple.

The decision is a striking repudiation of Apple’s conduct in the Epic Games trial, which was decided in 2021 and appealed in 2023.

While Apple won the vast majority of counts in the original trial, Epic Games did win some concessions tucked inside a 180-page order. Rogers originally ordered the company to make changes to its app store, allowing software developers to link to their websites inside of iPhone apps for customers to make purchases outside of Apple’s ecosystem.

On Wednesday, Rogers accused Apple of willfully trying to violate her ruling, and she held the company in contempt.

Rogers wrote that it was expected under her ruling that those kind of off-app purchases would not have an Apple commission. But Apple introduced new policies in 2024 that collected a 27% commission from some of those purchases, only a slight discount from the 30% Apple usually collects from in-app purchases. Rogers said nearly every Apple decision on its app-linking policies was anticompetitive.

Rogers wrote that Apple presented evidence to the court of internal deliberations about its rule that were “tailor-made for litigation,” instead of the company’s actual internal discussions.

“In stark contrast to Apple’s initial in-court testimony, contemporaneous business documents reveal that Apple knew exactly what it was doing and at every turn chose the most anticompetitive option,” Rogers wrote. “To hide the truth, Vice-President of Finance, Alex Roman, outright lied under oath.”

Rogers also accuses Apple of withholding documentation of a June 2023 meeting including CEO Tim Cook about how they would comply with the 2021 court order. Rogers said that Apple hid the existence of the meeting from the court until 2025. She also said that Apple abused privilege in order not to share documents that it was supposed to.

Apple had a “a desire to conceal Apple’s real decision-making process, particularly where those decisions involved senior Apple executives,” Rogers wrote.

Former Apple senior vice president and current fellow Phil Schiller did not want Apple to take a commission on web links, but Cook ignored him, Rogers said.

“Cook chose poorly,” Rogers wrote.

The judge ordered, effective immediately, for Apple to stop imposing its commissions on purchases made for iPhone apps through web links inside an app. She also ordered Apple to pay Epic Games’ attorney fees over this specific issue.

“This is an injunction, not a negotiation. There are no do-overs once a party willfully disregards a court order,” Rogers wrote.

An Apple representative did not respond to a request for comment. Roman didn’t immediately respond to a message.

“It’s a huge victory for developers, and it means all developers can offer their own payment service side-by-side with Apple’s payment service,” said Epic Games CEO Tim Sweeney on a call with reporters on Wednesday. “This forces Apple to compete. This is what we wanted all along.”

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