On-Site Medical Clinic Costs PSJA ISD $14.45 PEPM – Saves Money

On-site medical clinics are not new. The concept is simple: employees can seek cost effective primary care services at their place of work, saving time and money.

A review of this power point presentation  – PSJA_Annual_Review_2008-2009 – of the PSJA Independent School District’s on-site medical clinic shows that the all inclusive costs of operating the clinic approximates $14.45 per employee per month.

PSJA ISD is a large south Texas school district with over 5,500 employees.

Other similar size districts in South Texas do not have on-site medical clinics due primarily, we believe, to local politics. It may be that area physicians worry about lost revenue and kickbacks from referrals. Hospitals, whose bread and butter are lucrative referrals from willing physicians with admitting privilages have a vested interest in controlling the politics surrounding on-site medical clinics for political subdivisions.

Hospitals claim they can run and operate on-site clinics cheaper than anyone else. They charge much less than independent operators but make up for the low ball rates by referrals to their own facilities.

The PSJA ISD clinic cost is one of the lowest we have seen in the industry. We have seen PEPM rates as high as $65.

Based on the information on the powerpoint the average office visit encounter was $52.68 which correlates to Medicare – 30%. Prescription drugs averaged $45.56 per encounter.


What is not shown on the power point presentation is savings realized through selective referrals if any. If this is structured properly, the savings to the PSJA self-funded plan on the referral side would far surpass the actual savings on primary care services.

Editor’s Note: If PSJA would restructure their PPO plan to an EPO with direct contracts procured through a competitive bid process, they could reduce their overall medical spend by +40%. However, that would be a giant political step indeed.

From Molly Mulebriar – “What a novel idea! Getting local health care providers to compete for the business rather than insurance companies.”