Walgreens and Water Street Healthcare Partners — enabling a virtuous circle

Walgreens helped create a new, larger worksite health organization when it sold a majority interest in Take Care Employer Solutions to strategic health investor Water Street Healthcare Partners. The new entity, which combines Take Care with CHS Health Services, will serve more than 200 leading corporations through nearly 500 worksite health-and-wellness centers across the country. Walgreens still maintains a significant stake in the company and will continue to manage their existing worksite clinics in collaboration with the new company. 

The end result will be an opportunity to couple best practices into an entity with a greater economy of scale that's part of a business model with a lot of upside. The vast majority of large employers remain committed to providing benefits to active employees, according to a recent survey by Towers Watson and the National Business Group on Health — an association of large employers — released in March. Offering health insurance as an employee benefit is something the majority of small businesses think is very important, too, according to the 2014 Small Business Health Care Survey from the National Small Business Association — 91% of firms fielding between 20 and 50 employees and 94% of businesses with more than 50 employees believe health benefits are crucial to employee recruitment and retention. 

Most employers provide health care to their employed, but at a rising cost. The cost of providing employer-sponsored healthcare benefits is expected to increase 4.4% this year, NBGH reported. And according to a 2013 Aon Hewitt analysis, total healthcare costs per employee were $10,522 in 2012, and employers’ share of that cost was $8,318. Whether it's a large employer or small employer, that represents a significant spend. 

Worksite health clinics help to mitigate those costs, significantly, and as such is a strategy more and more employers are considering implementing. And they might even be given incentive to do so by a Congress looking to lighten the cost burden on Medicare.  

The American College of Occupational and Environmental Medicine in January urged Congress to support new policies that would strengthen health-and-wellness programs in the workplace. Evidence is mounting that effective workplace health-and-wellness programs, when properly managed and sustained, can help reduce the incidence and burden of such chronic conditions as diabetes and hypertension, ACOEM testified. “Employers are in a position of tremendous leverage in terms of our national healthcare costs,” suggested ACOEM president Ron Loeppke. “More than 130 million people are employed in the United States, and evidence-based population-health management programs in the workplace — applied comprehensively — have the potential to significantly impact the health of those who are heading toward retirement," he said. “It makes common sense that a healthier retiree who ‘graduates’ into Medicare is going to ultimately have lower costs than one who enters the system already debilitated by chronic disease. So why not do all we can to prevent that from happening — using the workplace as resource?”  

If that's not enough incentive to implement an onsite workplace clinic where you work, there are other significant benefits to these clinics that are maybe less tangible than the dollars and cents of saving on the healthcare spend. Corporate cultures long on better health make for happier employees. Happier employees are more productive employees. 

A survey from Aon Hewitt, the National Business Group on Health and the Futures Co. that was released in February suggests that employees who perceive their organizations as having a strong culture of health are happier, less stressed and more likely to take control of their wellbeing than employees in other organizations.

Based on the Consumer Health Mindset analysis, employees who work in strong cultures of health were more likely to say they have control over their health than those who work at companies where it is less of a priority (75% versus 63%). In addition, they were less likely to report that stress has a negative impact on their work (25% versus 49%). The report also showed a link between strong health cultures and general happiness. Sixty-six percent of employees in strong health cultures say they are extremely or very happy with their lives, compared to just 32% of those in weak health cultures.

"Many employees recognize the advantages of a healthy lifestyle, but may not have the time or motivation to take action," stated Joann Hall Swenson, health engagement leader at Aon Hewitt. "Our survey shows that organizations that foster a strong culture of health, through leading by example and encouraging healthy activities, will cultivate a workforce that demonstrates better health behaviors and is more actively engaged."

It becomes a virtuous circle — institute a worksite clinic to help mitigate health costs. In so doing establish a vibrant, health-friendly corporate culture. That becomes a culture that reinforces healthier lifestyles and those healthier lifestyles not only represent a lighter healthcare burden, but also happier, more productive employees. 

The bottom line is this — Walgreens hasn't exited what will prove to be a very promising business proposition. They'll have representation on the new company's board as part of their still-significant stake in the company. What they have done is enable the joining of two worksite clinic management firms that will be better positioned to augment employer-partner health savings going forward within a macro corporate environment that will place a premium on mitigating the overall health spend.

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