Treating High health cost Bethlehem Steel's clinic an overwhelming success

August 15, 1993|By Patricia Meisol | Patricia Meisol,Staff Writer

BETHLEHEM, PA. — Bethlehem, Pa.-- With her family doctor on vacation and her knee swollen after an ill-fated outing in an inner tube, Jeannette Shelesky took the advice of her husband, a retired Bethlehem Steel Corp. employee, and visited the company's new health clinic here.

She hasn't given up her family doctor, but Mrs. Shelesky, 68, was satisfied enough to return to the Bethlehem Steel Family Health Center several times for her knee, which was found to be arthritic. Last week, she was back again, for a skin problem.

"[My doctor] has really helped me," she said, leaning back in an examining room decorated with murals of woodland scenes.

Mrs. Shelesky is among the 1,800 people treated in just twomonths at the clinic, which the giant steelmaker opened in a bid to stall spiraling health care costs. Beth Steel's health care bill has grown from $162 million in 1988 to about $250 million this year; the company spends $27 million in the Lehigh Valley alone.

Bethlehem Steel expected to save $1 million this year by contracting with a private company to hire full-time doctors and handle paperwork at the clinic. But the response has been overwhelming -- since June, the clinic has handled twice as any people as expected, boosting potential savings to $2 million.

Now the steelmaker is considering additional clinics for employees and retirees. In the Baltimore area, where about 50,000 health insurance beneficiaries live, a pair of clinics could open as soon as mid-1994.

MA And such corporate clinics are likely to become much more com

mon throughout the nation. This year, at least a dozen companies -- including GTE, Deere & Co. and R. J. Reynolds -- have opened similar facilities to control costs. Delta Air Lines is the latest to announce that it is considering a clinic.

"Two years ago, if you said something about corporate clinics, you could count them on your hand. Nobody was interested in that sort of thing," said Jim Norton, a Foster Higgins managing consultant who has worked with big companies getting into the business. "Now we can get a serious inquiry once a month."

Bethlehem Steel's clinic is just one part of a corporate strategy to cut health care costs for active and retired workers. Additional elements include direct negotiations with doctors and others who provide care, drugs and services. Essentially, Bethlehem is creating its own system of health care by choosing providers and linking them in a package for employees.

The Lehigh Valley clinic, which opened June 8, is a critical piece of that strategy. It allows Bethlehem to build other services and control the more expensive aspects of medicine.

Eventually, Bethlehem hopes all employees will use some combination of services from the clinic and a network of about 50 doctors assembled in a joint venture with local Blue Cross plans. For now, though, the primary care clinic is an option available to supplement two health plans, including a health maintenance organization run jointly with Blue Cross.

It comes at a price and service level that many find irresistible. So far, 35 percent of the users have switched their permanent records to the clinic.

"It is really convenient," said Patricia Molchan, 37, a mechanic with serious allergy problems. On the way home from work, she can stop for allergy shots at the clinic, 2 1/2 miles from the steelyard. And there's no charge for the nurse who administers the shots.

Mrs. Shelesky also has saved money. Her share of an office visit to a clinic doctor is $10 -- it's free to see a nurse for educational sessions, treatments or drugs. By comparison, she'd pay $15- $20 for her share of a visit to a private physician. The fee for clinic lab services or X-rays is $10, and she pays 10 percent of the cost of generic drugs.

Leisurely pace

People also are attracted by the clinic's leisurely pace -- half-hour appointments are scheduled for all patients. Not everybody needs the time, but it's available if they do, says John A. Romeo, director of health care systems for Bethlehem Steel. "It's hassle-free and one-stop shopping," he said. "That seems to be the appeal to a population that has a bigger need for medical services. Also, they get time. They finally get a chance to get their questions answered."

Bethlehem's clinic is a variation on a concept invented by Kaiser Aluminum for its employees in isolated areas of the West in 1938. The concept stuck, and today Kaiser Permanente is the country's largest HMO.

Unlike the first such company clinic, though, the Bethlehem Steel version is run by outside professionals under a five-year contract that can be terminated with 90 days' notice if customers aren't satisfied.

It's the larger of two commercial projects begun this year b Alexandria, Va.-based PHP HealthCare Corp., which has run clinics on U.S. military bases for 17 years. And the 10 percent savings Bethlehem hopes to achieve is possible partly because of PHP's large-volume discounts. (It handles 6 million visits to military base clinics annually.)

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