SILVER SPRING, Maryland - Liz Sequeira, a 52-year-old primary care physician, is too young to remember when U.S. doctors made routine house calls. So to her, seeing patients in her three exam rooms on the first floor of Discovery Communications Inc's (DISCA.O) modern headquarters is like stepping back in time.

It's like being an old-time doctor, a town doctor, said Sequeira, whose clinic in the company's wellness center serves as many employees' first stop for blood tests and medication.

As Democratic lawmakers in Washington inch ahead with plans to overhaul the U.S. healthcare system, companies like Discovery are striking out on their own -- whether through on-site doctors or diet plans -- to rein in soaring costs in a nation where employers still pay for the bulk of medical care.

Under proposals moving through Congress, employers of all sizes would get incentives to entice workers into corporate wellness programs, even though it is still unclear whether the programs improve employees' health let alone companies' bottom lines. Despite the lack of solid evidence, a growing number of companies expect it will do both, and they're spending real money to find out.

Of course, for some recession-battered companies, wellness programs are an unaffordable luxury in the face of health insurance costs that according to the Kaiser Family Foundation shot up to more than $13,000 per employee -- 131 percent more than in 1999.

(To see a graphic on rising health insurance premiums, click here: )

Discovery, for one, needed no further persuasion. It opened a second wellness center at its New York office this year and plans one in Miami in 2010. Hiring on-site doctors and nudging employees to take better care of themselves helped halt the growth of its health costs -- it was flat last year, which is more of an achievement than it sounds like considering that most companies saw a 10 percent rise over the same period, Discovery officials said.

Every time an employee walks into the clinic, we save money, said Evelyne Steward, Discovery's global vice president who oversees wellness and diversity issues.

Without some kind of reform, U.S. health insurance costs per employee will triple to nearly $29,000 in 2019, according to the Business Roundtable, which represents large employers. Costs have already jumped 131 percent since 1999 to $13,375 in 2009, a Kaiser Family Foundation study found.

When an employee gets a physical exam from Dr. Sequeira instead of a private physician, Discovery saves about $100, Steward said. It also gets increased productivity by saving workers' time and detecting serious health issues sooner.

All in all, the parent of Animal Planet and the Discovery Channel calculates it saved $5 million since opening the Silver Spring clinic and launching other programs five years ago. About $4 million of that is from lower medical claim costs.

While current legislation before Congress do not provide direct incentives for on-site clinics, they do offer companies tens of thousands of dollars for broad wellness initiatives such as weight management plans, counseling and more.

On-site clinics are still relatively rare in corporate America, but are growing fast. They serve four percent of working Americans and could rise to 10 percent in five years, according to research firm Fuld & Co. About 1,200 companies now host 2,200 clinics, a number seen rising to 7,000 facilities by 2015, Fuld found.

An even larger number of companies have adopted more modest programs to promote wellness among workers and help them manage costly, chronic diseases such as diabetes. Nearly 40 percent of 626 employers in the United States surveyed by consulting firm Buck Consultants said they would offer healthier vending machines or targeted websites, while about 25 percent planned new health-oriented websites.

Employers are also hiring nutrition counselors, holding on-site fitness classes and offering discounted gym memberships to keep workers healthy. Using third-party vendors or certain insurance plans also aim to help companies ensure patients take prescribed medications and follow doctors' orders.


Doctor visits, medications, hospital care and more all add up to a $2.5 trillion U.S. healthcare industry, or one-sixth of the nation's economy. The federal government foots the bill for some 45 million elderly and disabled Americans, and for millions more who are poor, including children.

That leaves employers to take care of the rest.

Still, less than a quarter of U.S. companies offering wellness benefits actually measure whether they save money, Buck Consultants found. Among those that did measure, two-thirds said their rate of cost increases fell about two percentage points per year -- not an insignificant return on investment, according to the survey.

IBM Corp (IBM.N) said it saved about $190 million in health costs between 2005 and 2007 covering more preventive care and introducing cash incentives for smoking cessation and better nutrition. Next year it will also offer employees up to $300 to monitor their habits.

Others with successful wellness programs include Pitney Bowes (PBI.N), Safeway (SWY.N) and Johnson & Johnson (JNJ.N).

But pressure from the nation's worst economy in decades has forced some companies to scale back efforts.

Industrial equipment maker Caterpillar Inc (CAT.N), which laid off tens of thousands of employees amid a plunge in sales, also laid off health coaches at many of its facilities and halted some programs helping patients control diabetes, a chronic condition linked to obesity.

That part of the program had to be temporarily suspended just because of the economic recession. But we have plans in place to get them back in place as soon as possible, said Dr. Mike Taylor, Caterpillar's medical director.

Caterpillar spends about $650 million a year on health care for its employees and its annual increase in health care costs is about 1 percent since various programs began in 2002.


Besides potential savings, Discovery's Steward, Caterpillar's Taylor and other company wellness directors say healthier employees is their top goal, not just cost savings.

But even if companies build it, there's no guarantee employees will come -- to, say, the gym in the lobby -- or take part in rebate programs.

Participation in company programs has historically been quite small, said National Business Group on Health (NBGH) president Helen Darling, whose group represents big employers. Even in instances when people are paid to do something, they don't all take advantage of it.

Almost half of U.S. employers cite problems with getting workers to embrace available programs, the group found in November survey of nearly 300 companies by benefit consultant Watson Wyatt Worldwide Inc.

Labor regulations let companies offer incentives to workers worth up to 20 percent of their insurance plan's costs to sign up for weight management, stress and stop-smoking programs.

Under the Senate's health reform bill, employers could raise payouts to 30 percent of plan costs, or as much as 50 percent at the U.S. health secretary's discretion. In the House bill, small companies could get up to $50,000 for up to three years to defray wellness program costs.

While regulations require such perks be doled out for simply participating in programs -- not for actually reducing weight or cholesterol -- some consumer groups are wary.

The American Diabetes Association and the American Cancer Society see the rebates as penalties for less healthy workers and those who choose not to participate.

Healthcare consultant Merrill Goozner argues the incentives can attract healthy employees who already have low healthcare costs, not sick or overweight workers who drive up company costs. Opt-in incentives really open up a two-tiered system, Goozner said. You're reaching the wrong people.

Instead, wellness programs should be restructured like employer-based 401k retirement funds that now automatically enroll all workers unless an employee opts out, he said.

Employers could already take that route if they choose, but Congress does not mandate it in its health reform proposals. Final details of the incentives must be worked out after the Senate passes its version of the bill, which Democrats hope to do this month.


Some wellness programs, however, raise concerns about how far companies can go to keep workers healthy -- and whether privacy lines are being crossed.

A simple action -- like regularly taking a prescription pill -- could save companies thousands of dollars later. But to ensure workers take their medicine vaults employers into a more interactive role of managing their health, not just paying for insurance coverage.

One related potential stumbling block -- a new law to prevent employers from discriminating against workers based on their genetic profile. Some are concerned the rule contradicts regulations now allowing the 20 percent employee incentives and could be at odds with similar provisions in the reform bill.

The law, the Genetic Information Nondiscrimination Act, has been rolled out in stages with the part that applies to insurance just having taken effect on Dec 7. It aims to prevent an employee's genetics from being a factor that would affect the cost of insurance or other benefits.

It does not allow for the provision of any benefits and rewards to be contingent on enrollees revealing their genetic information, Representative Louise Slaughter, who backed the bill, said in a recent letter to the U.S. health secretary, among others.

Wellness will never work unless there is a shared responsibility between the employer and the employee. I don't think there is real trust by employees right now, said Mike Miele, the head of Healthcare Analytics, a division of Gallagher Benefit Services, which advises employers on employee benefits.

A November report by the National Pharmaceutical Council found that 95 percent of 75 large employers surveyed were taking steps to ensure workers take medicine as directed by their physician, either directly or through their insurance plan or other outside companies.

Diabetes, a condition that can be managed by diet and exercise but also insulin injections, topped their list of concerns. Overall, estimates show the disease costs the United States more than $100 billion a year.

Another step many employers are taking is to survey employees to pinpoint trouble areas. Johnson & Johnson offers $600 to workers who fill out its surveys, resulting in a 95 percent response rate, according to NBGH's Darling.

Gallagher's Miele, who sees promise in the Congressional proposals, said the larger debate over reforming the system has forced companies to take a hard look at their role.

The only way to beat the healthcare cost problem is getting people healthy, he said.

At Discovery, a growing number of employees have no problem seeking out Dr. Sequeira as their main caregiver, not just when colds or other ailments arise on the job.

Sequeira, who was contracted by Discovery through Walgreen Co's (WAG.N) worksite clinic company Take Care Health Systems, has seen patient visits move from urgent care to more routine check-ups.

Discovery estimates up to 80 percent of workers have used the Silver Spring clinic at some point, with about 45 percent selecting it for their primary care. Use of its New York facility has also doubled.

Just like with house visits, Sequeira said, that helps her provide more personal care. Over time, you get to know them ... and they feel more secure that they're going to be taken care of, she said.

(Reporting by Susan Heavey; editing by Jim Impoco and Claudia Parsons)