These Alabama Workers Were Swamped by Medical Debt. Then Their Employer Stepped In.

TUSCALOOSA, Ala. — Like most medical offices, the small suite of exam rooms at the PhiferCares Clinic fills daily with patients seeking help with bumps and bruises, sore throats, and stuffy noses.

But there’s an important difference about this clinic in central Alabama: No one gets a bill, including for prescriptions.

That’s because the clinic is owned by a manufacturing company with a specific agenda. “We don’t want you to spend money on health care,” said Russell DuBose, vice president of human resources at Phifer.

Phifer, a global manufacturer of window screens, opened the clinic five years ago in a bid to control its health care costs and stop big medical bills from driving its workers into debt. The strategy has paid big dividends. Phifer has saved so much on health care that the company was able to open a free summer camp for the children of employees.

Workers have dramatically boosted retirement savings, too. And Phifer is now adding chiropractic care and orthotics, all at no cost to workers.

Benefits like these remain out of reach for most U.S. workers, millions of whom drain savings, take out second mortgages, or cut back on food and other essentials to stay ahead of health care debt. Overall, about 100 million people in the U.S. are burdened by some form of this debt, KFF Health News has found.

Many of those people have health plans through employers who, unable to control their health care costs, now force workers to pay thousands of dollars out-of-pocket when they go to a doctor. Phifer has shown there’s another way. The company not only saved itself money, it’s sharing the benefits with workers and shielding them from debt.

“It’s really remarkable,” said Shawn Gremminger, president of the National Alliance of Healthcare Purchaser Coalitions, which works with employers on improving health benefits.

“If I had to point to a single employer in our network that’s been the most aggressive tackling this problem and coming up with the most innovative solutions,” he said, “it’s a relatively small, privately owned manufacturer in a small town in the South.”

‘Unacceptable’ Health Costs

Phifer is a family-owned company founded after World War II by a former pilot. J. Reese Phifer saw an opportunity to turn aluminum produced for the war effort into window screens for America’s booming suburbs.

Today Phifer still makes screens at a cavernous plant outside Tuscaloosa that stretches over more than 34 acres of factory floor. Inside, massive rolls of aluminum coil are unwound, stretched, and spun on rows of spools and looms. Elsewhere, fiberglass is woven into material for window shades, patio furniture, and other products.

Business has been good for the company, which employs about 2,000 people and operates plants in Alabama and overseas. A few years ago, though, Phifer noticed its workers weren’t saving enough for retirement. The culprit was medical bills.

“Copays, coinsurance, cost sharing. All these things were taking money away from our plan members,” DuBose said. “The amount of money employees were having to spend on health care was unacceptable.”

That’s not unusual. Most U.S. workers and their families are in a health plan with significant cost sharing, requiring they pay thousands of dollars out-of-pocket before coverage kicks in.

The average deductible for an employer-provided health plan now exceeds $1,500, data shows. And for family plans, deductibles can be several times that. That’s a big reason health care debt is such a big problem, even for people with health coverage.

For Phifer, which relies on skilled workers to operate its machines, reducing employees’ financial stress became a priority, DuBose said. “When you have somebody who wants to be here every day, wants to be here every year,” he said, “they can do some pretty awesome stuff.”

Removing Barriers

Phifer landed on a deceptively simple idea: Make it easier — and cheaper — for workers to see a doctor and fill a prescription. That, the company reasoned, could improve employee health and control costly complications.

The cornerstone of this plan was the PhiferCares Clinic and pharmacy.

The company set up the clinic in a small park and recreation space Phifer owned down the road from the factory. It contracted with a local health system to provide the physician and nurses. Inside is a small pharmacy.

At no cost, employees and their families can go in for basic primary care, including checkups, vaccinations, and help managing chronic illnesses like diabetes. “It’s almost a concierge service,” DuBose said.

Phifer did something else, too. It directs patients to specialists and hospitals with the highest quality ratings. That can save money for patients and the company. Workers who choose one of these providers typically don’t get a bill.

That kind of no-cost access makes a huge difference, said Ronald Lewis, who visited the PhiferCares Clinic recently for a checkup.

“I’m saving thousands of dollars, easy. Easy $3,000,” said Lewis, whose wife works at the plant. “All you’ve got to do is come in, make an appointment, and they come in and see you. … It is a life-changer.”

The clinic has helped Lewis lose weight and keep his blood pressure in check. A doctor also caught early signs of prostate cancer.

Cherry Wilson, who has worked on a production line at Phifer since 2017, said she still has medical debt from a gallbladder surgery she had before she joined the company. But when she broke her foot more recently and got surgery from a preferred specialist, there were no medical bills. “I don’t pay anything here,” she said.

Big Dividends

Other companies have experimented with workplace clinics with mixed results.

Running a medical office can be expensive. The strategy may not work if employees aren’t centrally located or if employee turnover is high. And savings can take a while to materialize. But research on employer health benefits has shown that reducing how much workers pay for primary care and prescription drugs yields better outcomes for workers and can save everybody money.

Phifer is reaping rewards.

Despite years of high inflation nationally, the company’s net spending on health care was lower in 2023 than in 2019, declining from $15.8 million to $14.9 million in constant dollars, according to data provided by DuBose.

The cost of the company’s most popular health plan — which comes with no deductible and includes dental benefits — is lower, as well. Phifer workers pay $394 a month for this family plan. By comparison, workers nationally contribute $548 monthly on average for family coverage that typically comes with a sizable deductible.

“We’ve seen the power of prevention,” DuBose said.

With savings from its health care strategy, Phifer opened the summer camp last year. And the company is offering college scholarships to workers’ children.

Workers are saving more, too. About 90% are hitting their retirement goals, DuBose said, up from around 75% five years ago.

The protections from big medical bills have had another benefit, said Jerry Wheat, who has worked for Phifer for 38 years and runs a production line for fiberglass screens.

“It makes you want to take care of yourself and do better for the company,” Wheat said. “If somebody’s going to take care of you, don’t you want to take care of them? That’s the way I look at it. But I’m old-school.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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