Cisco Systems, the global computer networking giant, opened its own medical practice in Research Triangle Park this week in an unorthodox move designed to stem runaway medical costs and provide high-end health care for employees and their families.
Cisco’s strategy runs counter to the majority of businesses that are cutting back health coverage and asking employees to pay more for their insurance benefits. Company officials said that, as a self-insured company, Cisco is opting for comprehensive management of employees’ health.
“We would like to have everything coordinated,” said Ted Kezios Sr., Cisco’s director for global benefits. “It’s about reducing medical costs not only for Cisco but more importantly for our employees and their families.”
The California technology company on Wednesday offered a tour of its LifeConnections Health Center, to be staffed by 25 medical professionals and assistants from UNC Health Care. The spa-like center, which will be open Monday through Saturday, is equipped with Cisco’s 2-way video monitors for remote consultations; features a Zen Suite for massages, acupuncture and chiropractic; and has an on-site optician and an optometrist offering an array of designer frames.
This is Cisco’s third such medical practice, with two others at the company’s corporate headquarters in San Jose and its complex in Bangalore, India – both of which employ about 15,000 people. The San Jose health center opened 7 years ago and saves about 20 percent to 30 percent on medical costs, said Katelyn Johnson, Cisco’s LifeConnections business manager.
For such a health care practice to make financial sense a company has to have a critical mass of several thousand employees and a commitment to generous benefits. The handful of others that are experimenting with similar approaches are Cary-based software maker SAS, Chicago-based Boeing and Santa Clara, Calif.-based Intel.
The goal of Cisco’s center is to become the primary care provider for 4,800 Cisco employees in RTP and their families, totaling about 12,000 potential patients. Achieving that goal would require employees and family members to leave their current doctors and switch to new medical providers at the office, though the shift is expected to take time and not to be embraced by all employees.
Cisco will encourage employees to use the LifeConnections Health Center by offering services there at a 30 percent discount.
As an extension of Cisco’s RTP campus, the LifeConnections center is not open to the public. It is also not available to the roughly 1,500 contractors who work alongside Cisco employees in RTP.
Cisco officials said they hope to achieve their target of saving up to 30 percent on health care costs through a variety of means that will range from UNC providing preventive care, avoiding unnecessary procedures and data mining of patient records. UNC will not share private patient information with Cisco management, both partners said.
At first, Cisco will pay UNC for medical services provided to employees and their families, but over time UNC is expected to assume some of the risk of treating patients, said Allen Daugird, chief value officer at UNC Health Care.
“They have purposely poured a lot of money into this that a lot of companies would not be able to afford,” Daugird said. “Cisco made it clear to us they were really interested in a partner that would at some point start taking on the risk for the care of employees and their dependents.”
Daugird characterized the effort as a pilot project that would give UNC experience in total patient care, which many believe is the wave of the future.
Kezios said UNC was selected from five applicants to staff and operate the LifeConnections center. The clincher for UNC was a hypothetical case studying involving a 37-year-old wife of an employee suffering a blood clot in her left calf.
The other applicants said the symptoms required calling 9-1-1 and sending the patient to the hospital emergency room. UNC respondents said they could treat the patient on site and a nearby lab, coordinated by a UNC doctor.