Municipality of Anchorage looks into on-site health clinic to drive down health care costs

The Anchorage city government is looking to save money on health care costs by hiring a Seattle-based company to run a medical clinic for some of its employees, much as the Anchorage School District did a few months ago.

Anchorage Municipal Manager Mike Abbott said Tuesday that the city was in negotiations with the company, Vera Whole Health, to create a primary care clinic to serve about 1,500 employees and their families on the municipality's self-funded health insurance plan. Ona Brause, the mayor's acting chief of staff, said at a June meeting that the city hoped to have the clinic opened before the end of the year.

In September, Vera Whole Health is opening a medical clinic for Anchorage School District employees and their dependents. The Midtown Anchorage clinic will provide primary care, health coaching, basic lab services and some prescription medicine at a fixed cost to the district.

Abbott said the municipality was evaluating contracting with the company for a "similar suite of services." He said he could not yet discuss costs.

The Anchorage School District hired Vera Whole Health earlier this year to open a health care clinic in an effort to cut rising medical costs, catch health problems early and provide quality medical care, said Todd Hess, school district chief human resources officer.

The school district clinic will serve as an optional medical hub for the roughly 4,500 people on the district's self-insured health care plan, according to the district.

[Faced with increasing health-care costs, Anchorage School District is contracting for a clinic]

For the clinic's services, the district will pay Vera Whole Health a flat annual fee of about $2.3 million.

Ryan Schmid, Vera Whole Health chief executive, said the company generally does not bill patients for health care services, but patients with a health savings account would have to pay a "small fee for nonpreventive visits," such as an appointment for an ear infection.

"This is due to IRS regulations," he said.

Schmid said Vera Whole Health achieves cost savings by providing patients with 30- to 60-minute appointments, and in that time the health care provider "can capture 80 to 90 percent of the care most people need."

"This dramatically reduces the amount of specialty care and diagnostics that patients otherwise would receive," he said.

If the clinic cannot treat a condition, he said, staff tries to refer patients to "high-quality and low-cost physicians within network."

The school district estimates that the new medical clinic will reduce costs by at least 12 percent during the initial three-year contract with Vera Whole Health.

"That means there are more teachers in the classrooms, more supplies, more books for kids," Hess said in an interview Thursday.

Hess said that once the Municipality of Anchorage health clinic opens, district employees will be able to use either site. The clinic is optional, he said, and the district plans to offer incentives to employees who use it.

Abbott said the municipality expects to bring a contract for a medical clinic to the Anchorage Assembly later this summer. The Assembly must approve the contract.

Schmid declined to comment on Vera Whole Health's negotiations with the municipality since it did not yet have a contract, but he said the company planned to open two clinics in Alaska this year. He said the company was also talking to two additional Alaska organizations about opening clinics, but declined to name them.

The rapidly expanding Vera Whole Health currently runs nine clinics in Oregon, Washington and Arizona. Schmid said that on average, 70 percent of eligible employees attended the medical clinics in their first year of operation.

About the company's move into Alaska, he said, "We're really excited and we're also really committed to becoming part of the medical neighborhood."