Why Company Health Clinics?

I used to work for a company that provided these services to corporate clients. The idea is that while most employees will not take time off work to go and visit a doctor's office, they will drop by an in-house clinic on break. This means they tend to receive immediate care for injuries that they might otherwise ignore until they became Workers' Compensation claims, which saves the company massive amounts of money.

It's really not "unspecialising". The large company provides a space, but contracts with a specialist to provide the staff and equipment. Economically, there is no difference between this arrangement and an external office; the clinic leases the space from the client, and the client pays for the service through insurance claims. The client doesn't manage the clinic. External patients are still seen at the clinic. It's just that the clinic is located in a more convenient place for the client's employees, which provides significant economic benefit to both companies.

Arnold, How do you explain the corporate cafeterias that are becoming popular perks? It's not uncommon in SoCal for medium to large companies to have in-house cafeterias with high-end hotel class chefs that serve meals which are much less expensive and usually way better than going out.

My bet is that in-house clinics are a combination of cost containment and convenience. I'd also wonder whether taking some health care in-house lowers the number of sick days employees take.

Agreed. We're often too quick to assume that constraints (e.g., the tax benefit of employee-provided "fill in the blank") lead to large costs. People are very creative about finding ways around constraints.

My point is not that tax law, regulation, etc. generate no costs or distortions. Rather that these costs are likely to be smaller than we'd first imagine.

While, I can see the benefit for controlling costs of an in-house clinic, are we sure that this the driving force. Perhaps it is more for productivity. If an employee has to leave the site for an appointment, their workday is shot. A quick walk to the clinic to have that sniffle checked or cut bandaged puts them right back to work. This is productive for the company and the employee. The employee avoids the increasing hassle of traffic to accomplish minor errands. If they offer on-sight childcare, it makes even more since since mom or dad can check out the little darling, attend the checkup and then get back to work. A similar reasoning can work for an on-site cafeteria, the company may subsidize it a bit with free rent but makes it up as employees aren't forced to get in their car for a bite to eat and so take less time. You see the real benefit of this in programming and design as the shorter the interruption, the easier it is for the developer to get back into his groove after the break.

Quality of life and productivity will be the driving factors. Companies have a choice, relocate to where employees can have a decent life or help remove some of the irritants. A clinic or good cafeteria seem to be much less costly than relocating a plant. Happiness does not come in a large paycheck if you don't have the time to accomplish your daily life. Not to mention, once raised it is difficult to reduce salaries but you can seek efficiencies in a service provided.

JKB, I'm certainly not saying it's right. I worked in a small startup that did the in-house lunch thing everyday and it was always clear that the intention was team building and cohesion and frankly, it got downright creepy. Some people need the lunch hour to decompress a little ;-). It's not such a bad idea in a big company where you can get lost in the crowd for a little while.

But obviously, if employers are getting on this bandwagon and they stick with it, they must be getting some advantage. I wonder exactly what they perceive it to be and what employees think about it. I also wonder how many employees are driven over the edge into the entrepreneurial class by such corporate paternalism. I am sure that's happening too!

Is my company not specialized enough because it has a cafeteria?

It probably isn't the best food for the money, but it certainly optimizes the employee/employer time/money.