HOLLAND — Replicating past successes in controlling employer health-care costs is the goal behind a health-care coalition’s planned medical center that will initially serve workers at five area employers.
Continuum LLC plans to open the medical center next month in temporary quarters in Holland Township, offering primary care, pediatrics, occupational health and a pharmacy to the employees of its five founding companies. Continuum, an employer-backed consortium that buys health care direct on behalf of its members, plans to begin building a permanent center by the end of the year that will include employer wellness and fitness facilities.
Known as ContinuHealth, the facility is being modeled after the medical center at Johnson Controls Inc., formerly Prince Corp., in Holland. By directly providing primary medical care to employees and their families beginning in 1996, Prince and JCI were able to save “millions of dollars” in health-care costs, said Chris LaFave, former JCI director of health and wellness who joined Continuum LLC in March.
“Paying for our health care up front and then providing it was cheaper than buying it in the community,” LaFave said. “It’s cost avoidance.”
And avoiding, or at least containing, the rapidly rising cost of health care is a growing priority for employers in an era of double-digit annual premium increases.
“Health care costs are just going through the roof,” said Bob Piersa, benefits manager at Holland-based Donnelly Corp. “This is a great opportunity or our best hope to somehow provide the company at least a way to stabilize or predict health-care costs.
“It’s a more efficient way to deliver the service,” he said.
Donnelly spends about $20 million a year on health benefits for its approximately 2,000 employees in Holland. The company has seen that cost rise 10 percent to 15 percent a year in recent years, with larger increases for prescription medications, and sees ContinuHealth as offering an alternative to the “quick-fix solution of the year,” Piersa said.
Piersa also likes the competition ContinuHealth brings to a market that he sees as lacking in the availability of primary-care physicians, which in turn leads to higher prices from existing providers.
“Our goal is to provide employees superior quality health care at reasonable costs,” Piersa said.
Through the medical center, Continuum promises to provide a “different kind of care” that’s designed to help employers control costs, while providing a high level of care to employees and their families, Continuum President Paul Brand said.
The facility will allow Continuum to further its mission of reshaping how health care is delivered to its members and generating value for employers by measuring the quality of care versus its cost. It also provides Continuum a base to further test and prove its business model against competitors in the market.
“The pressure’s on us to outperform the marketplace,” Brand said. “If we’re not doing the job, then don’t do business with us.
“Our position is, competition makes everybody stronger. It makes us better,” he said.
The development of ContinuHealth comes as Continuum prepares to separate from Johnson Controls, where the coalition has run the medical center and administered the company’s health benefits in Holland for five years.
Continuum has for some time wanted to open the Prince/JCI facility to other employers in Holland, or build a second medical center in the area. Those plans changed slightly when JCI this summer decided to replace Continuum and its health plan, REAL Health, with Grand Rapids-based HMO Priority Health to administer its self-funded health plan and take over operations of the medical center.
JCI’s move “made it easier” for Continuum to proceed with developing and opening ContinuHealth, which was already well into the planning stages, Brand said. JCI’s decision will enable Continuum to transfer medical, clinical and professional staff to ContinuHealth, avoiding the need to recruit new personnel, Brand said.
Continuum was encouraged to develop a second medical center by its members who want to generate the same kind of savings in health-care costs that Prince and JCI experienced, Brand said.
“You would be interested in any model that can address that and we have a model that’s proven to control costs,” Brand said. “We have a model that works and we have employer demand for it.”
The five founding employers who’ve provided a collective $500,000 in seed money to launch the medical center employ more than 7,000 people locally, exceeding the base of the JCI facility, LaFave said. Employers will offer the medical center as an option for their employees to use to see a family physician. Continuum did not disclose the five participating employers.
Several additional employers beyond the initial five who have agreed to use ContinuHealth are interested in participating in the venture, Brand said. Continuum plans to accommodate additional employers in the future, although it will limit participation at the onset in order to maintain a proper balance, he said.
“The opportunity exists but we’ve got our hands full for the next year,” he said. “We’ve going to get it working extremely well, take a year to test it and prove it and then grow.”