Benefits of Outsourcing Occupational Health Program Management

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While there are any number of reasons that an employer may desire to conduct medical screening on their employees, employers generally conduct medical screening on their employees for two basic reasons:

1. An employer may be required by regulation to perform some form of medical screening. These regulations are often based on either federal or state laws. Examples of employers subject to such regulations are those in the Transportation, Healthcare, and Mining industries. There are, of course, other regulations and industries that may have the need to conduct medical screening beyond those highlighted here.

2. Create a safer and more effective workforce. The major benefits of these programs are:

  • Reduce absenteeism due to injury
  • Reduce work related injuries
  • Help assess an employee’s ability to safely perform your particular job requirements
  • Reduce employee turnover
  • Establish a baseline health condition for future comparison

While many employers are aware of the need to perform medical screens, some employers may be unaware of the hard costs associated with these types of testing.

Examinations, immunizations, respirator clearance testing, audiograms, and other such related exams all cost money.

One item, however, that employers often overlook is the administration cost of managing these programs.

The costs that employers often miss are:

  • Cost of clinic selection
    • Picking the best clinic at the best price
  • Cost of clinic management
    • Making appointments
    • Tracking down exam statuses
  • Cost of a poor applicant experience (use of an inconvenient clinic)
    • Candidate attraction
    • Employee retention

The cost of clinic selection is an easy concept to appreciate, but it is hard to quantify.

Companies often have static clinics networks that do not change. Over time these clinics often increase their fees.

Since companies do not routinely go out to bid for these occupational health services, these fee increases will cause a substantial increase in their program cost.

Not managing clinic selection could cost companies a substantial amount of money since they are not leveraging their size to help mitigate program cost inflation.

Cost of clinic management for companies is substantial.

In the post offer arena, companies have their Talent Acquisition team manage making clinic appointments for candidates as well as track down occupational health service paperwork.

In the post-employment arena, the responsibility may be managed by another team, but the hard cost remains the same.

The management cost can be quantified by tracking the number of hours the personnel managing the program spends dealing with the clinic.

According to a recent report by Bersin by Deloitte, companies reported that their average talent acquisition cost increased to nearly $4,000 per hire.

A positive candidate experience should definitely be valued while spending this much per person.

If a candidate or employee has a better impression of a company, their employee retention rate may increase as well.

Outsourcing the management of clinic services also coincides with a positive candidate experience, along with other significant cost savings.

When opting to use a third party vendor, the following benefits are appreciated:

    • Clinic Selection – vendors who are in the business of managing clinics may be able to select clinics with the best price point. Vendors also can regularly evaluate clinics for performance and compliance. Even though it is hard to quantify this value, it is easy to appreciate the benefit of using the best clinic at the best rate possible, while also saving you time in the process.

 

    • Clinic Management – setting appointments and tracking down occupational health service statuses and paperwork cost companies significant amounts of money. The real cost is figured by tracking the number of hours spent managing this program in-house. For example, a large telecommunications company states that they saved over $900,000 in one year by outsourcing their clinic management to a third party. This cost savings was garnered over 10,000 candidates making the savings per candidate around $90. This figure per candidate is most likely pretty standard. Outsourcing the clinic management can be an effective way to mitigate this line item expense.

 

    • Candidate Experience – using a vendor who can work with your candidates to establish a convenient testing site location will enhance their candidate experience. This positive experience is fostered by individual coordination of the medical screening event. When services are individually coordinated, the candidate feels that they are being treated as an important individual. This may make a positive impression on the new employee which may enhance employee retention rates. The impact of reducing employee turnover, even as little as 1%, is huge when it comes to return on investment.
Qualities to Consider

When evaluating vendors who will manage your occupational health program, consider the following:

      • Large Vendor Network – choose a vendor who network is large enough to serve your program now as well as any future growth.
      • Established Vendor– choose a vendor who has the financial resources and established clinic relationships to assure that your clinic network will remain in place for utilization.

Experienced Vendor– choose a vendor with a track record of successfully managing the type of program that you need.

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Dr. Todd Simo

Dr. Simo served as HireRight’s medical director starting in 2009 and was promoted to chief medical officer in 2015. In addition to maintaining his role as CMO, Dr. Simo was also appointed to the role of managing director of transportation and drug & health screening in 2018. Dr. Simo came to HireRight with a decade of experience in the medical consulting arena. Before that he was the medical director for an occupational health clinic in Virginia and owned a consulting firm providing medical director services to employers across the United States

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The HireRight Blog is provided for informational purposes only. It is not intended to be comprehensive, and is not a substitute for and should not be construed as legal advice. HireRight does not warrant any statements in the HireRight Blog. Any statutes or laws cited herein should be read in their entirety. You should direct to your own experienced legal counsel questions involving your organization’s compliance with or interpretation or application of laws or regulations and any additional legal requirements that may apply.