Can House Calls Reduce Health Costs?

A service that sends caregivers to an employee's home or office delivers health-care savings to its corporate clients.

Among the many innovations designed to reduce the cost of health care, one is decidedly counterintuitive: house calls.

WhiteGlove House Call Health, a company that has built a strong corporate following in Texas in the past four years, says its house-call medical care will improve the health-care experience while lowering costs. For an annual membership fee of $300 per employee and a fixed fee of $35 per visit, WhiteGlove will dispatch a nurse practitioner to care for patients in homes, offices, or hotels within the company’s service area. The coverage includes employees’ dependents. Service is provided 365 days a year, from 8 a.m. to 8 p.m.

The nurse practitioners can provide any care a primary-care physician can, except prescribe Level 2 narcotics. Generic drugs are prescribed and supplied at no cost. Any lab work needed is sent to either Quest or LabCorp, which bills the member’s insurance provider but at lower rates than are typical for tests billed through doctors.

WhiteGlove’s business model is uniquely suited to self-insured companies, which pay claims out of their own pocket. Visits from one of its nurse practitioners cost several times less than visits to a doctor’s office. The service can also eliminate expensive, off-hour visits to emergency rooms or urgent-care facilities for conditions that are routinely treated by a primary-care physician. Beyond hard costs, the service reduces business interruptions that happen when employees spend hours getting to and from the doctor’s office. For a separate cost, WhiteGlove will also provide care targeting chronic diseases and conditions, such as diabetes and hypertension, with medicine dispensed for free.

WhiteGlove’s service is not a replacement for a health plan; doctors still must examine and treat, for example, massive chest pains and injuries leading to significant blood loss. But the service can lower the cost of contracting with a traditional health-care provider. VideoPlus, a 160-employee provider of video, audio, and print solutions for the direct-sales industry, saved $100,000 on its latest health-plan renewal by promising to use WhiteGlove more than it did in the first year after signing up for the service, according to CFO Mark Deloach. To help achieve that, VideoPlus raised its copayment for doctor visits from $25 to $35 in order to match the cost of WhiteGlove’s house calls, which the company passes on to its employees.

Also, the availability of WhiteGlove as an alternative to doctor visits is part of the reason some of its customers are raising deductibles in their health plans in order to reduce premium costs, says founder and CEO Bob Fabbio.

“Great Potential”

Fabbio says the company’s ultimate goal is nothing less than to “fundamentally change health care on a national level.” WhiteGlove, which has more than 400 corporate clients, recently began operating in Boston and Phoenix, and plans to open this year in Atlanta, Nashville, Tucson, and Washington, D.C. The company has lined up $29 million in venture funding.

“It’s a path to grow a very big business,” says Fabbio, who has founded several companies that either went public or were purchased by technology giants such as IBM and Hewlett-Packard. He notes that capital requirements for his operation are relatively low because there is no need to build, buy, or lease brick-and-mortar locations for the provision of health care.

How does WhiteGlove expect to make a profit on house calls? Fabbio says it can afford to offer low-cost visits and free prescriptions because of its Costco-like business model. “Costco doesn’t make a profit by selling you hamburger and paper towels,” he explains. “Like them, we are a membership-based business with reoccurring revenue. We have divorced ourselves from the traditional fee-for-service approach to health care.”

Last year Adaptive Business Leaders, a group of health-care and technology CEOs in California, cited the company as among the three most innovative health-care deliverers in America. “As an employer, if WhiteGlove were available in California, I would sign up immediately,” says Mimi Grant, president of Adaptive Business Leaders. “The company has great potential, because there is great need for what it offers.”

Mark Olson, senior consulting actuary at Towers Watson, says WhiteGlove’s service should be particularly appealing in markets like Boston, his own hometown, where primary-care access is tight. Taking into account the home or office delivery of a broad range of medical services, plus the cost structure for corporate clients, Olson says he hasn’t “seen anything else like this. It is unique.”

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