$1M Savings w/Employee Health Clinic

Mishawaka may open a clinic for public employees that could save the city $1M annually. How can health clinics increase savings for your city?


What Happened?

The city of Mishawaka plans to open a clinic for its public employees in an effort to cut health insurance costs and spur economic growth. The clinic would cost $1 million to launch, but is projected to save the city $1 million annually in reduced healthcare expenses.


These projections come after the South Bend school corporation reported a $981,000 drop in medical and prescription claims in the first year of offering a similar employee health clinic. The corporation’s health plans cost $1.6 million less than expected, the South Bend Tribune reported.

Lower healthcare costs is key to the city of Mishawaka, which recently switched to a self-funded health insurance program for the 1,600 city employees and their spouses and dependents that receive coverage. The city moved away from offering health insurance through a statewide trust after costs rose 30 percent in recent years. Since launching the self-funded insurance program, the city has reported savings of $30,000 a month, the South Bend Tribune reported.

The Mishawaka health clinic would offer employees:

  • Affordable prescriptions
  • Reduced costs of tests
  • No co-payment for visits
  • Alternative to expensive emergency room visits

The clinic will be built in an inactive fire station and possibly be made available to more than just employees of the city: Mishawaka officials are in talks with other employers to join the clinic as fellow members. More clinic members would translate to lower per-person costs, as well as drive up demand for healthcare workers – which would create jobs and economic opportunity, the South Bend Tribune reported.

Going The Extra Mile

Many municipalities and public employers use generous benefits packages to lure top talent to job openings, knowing the salaries cannot compete with those offered by private sector employees. In fact, public employees often rely on these benefits when planning for retirement.

A recent study in the Journal of Health Economics revealed most full-time public sector employees anticipate access to employer-provided health insurance coverage during retirement, unlike private sector workers. As a result, many public employees with retirement health insurance have less wealth built up than similar private sector employees without retirement health insurance. The cut in benefits can greatly impact these public workers.

Therefore, to acquire and retain high-quality workers, many localities deploying innovative offerings such as free clinics.

In Round Rock, Texas, the city built an employee health clinic after transferring to a self-funded insurance plan. To keep costs under control, the city requires employees to use the clinic for:

  • Workers compensation assessments
  • Fire and police department physicals
  • Drug testing
  • Vaccinations
  • No-cost acute care
  • Health maintenance services

By directing employees toward a low-cost clinic, the city is able to preserve some of the benefits from its previous health coverage such as primary care, specialized and emergency care services.

Modern Public Healthcare

Gov1 has reported on several health clinic initiatives and wellness programs implemented by public employers to reduce costs.