What the Heck is a “Negative Savings”?

Heh

WEST BEND — After 12 months of collecting data from employees and their families regarding the onsite health clinic, officials have received information they hope to use to mitigate rising health care costs for their workforce.

Sara Stiefvater, the client operations manager, along with Regional Medical Director Dennis Schultz, both from Quad Medical, presented results of the operations for the onsite health clinic Monday to members of the Common Council.

[…]

She also provided information regarding the clinic’s profitability when combined with Washington County since the clinic is shared between their employees.

In the aggregate, officials experienced a negative savings for the first year by slightly more than $22,000. The total estimated savings was about $332,000 while the expenses, which includes staff as well as the payment to the vendor for operating the clinic, was about $355,000.

That’s the oddest way to say that… “experienced a negative savings” of $22,000. In the real world, we would day that it “costs” $22,000. This is significant because the whole point of the county and city providing a clinic is to bring down the overall costs. Otherwise, it’s just an additional benefit to government employees.

The impact the clinic will have for the city and county, at least in terms of savings and cost, is significant because that is the primary reason that administrators and leaders established one.

The clinic opened during the summer, marking the completion of a project that required about two years inthe hopes of slowing the increasing rate associated with health care costs.

“Over the course of three years, the projection is about $1 million (saved),” Human Resources Director Todd Scott said during a July 2017 interview. “It is really going to be based on participation. How many people use the clinic and what type of services. That is where the savings is going to come from.”

If the goal is to save $1 million in three years, then the clinic needs to save $511,000 each of the next two years. I don’t see that happening.

That being said, I would consider the clinic a success if it saves some decent amount each year. For example, if it saves the taxpayers $50,000 per year and provides a better healthcare alternative to employees, then it’s a net benefit worth keeping. If it is just going to be another perk for employees that costs taxpayers even more, then it fails to meet its stated justification and should be shut down.

Let’s give it another year and see how it goes.