A COST-EFFECTIVENESS ANALYSIS OF AN IN-HOUSE CORPORATE OCCUPATIONAL MEDICAL DEPARTMENT

There is a current trend for corporations to switch from in-house medi cal departments to outside contract organizations for provision of occ upational health services. Although this may be driven by a desire to reduce expenses, there is little objective data on which to base this decision. This study compares the costs to a corporation of an in-hous e medical department with the costs for the same services if rendered by outside providers. Costs of the in-house department were obtained f rom company records. Prevailing charges for outside provider services were determined by an invoice survey and from other sources. We found that the cost for the in-house medical department was 42% less than th at of the outside providers at the prevailing rates. Thus, the in-hous e medical department is more cost-effective than the outside providers . We also discuss other advantages of an in-house department that are more difficult to quantify.