General Motors Co. just inked a deal with Henry Ford Health System to roll out a new health care option for the Detroit automaker’s employees. This fall, the team will be using a “direct to employer” health care contract that eliminates the insurance-company middleman in order to reduce costs.
The new strategy is modeled after moves made by companies like Boeing and Intel in response to rising insurance costs. The plan is called ConnectedCare, and is open to 24,000 salaried GM employees and their families located in Southeast Michigan.
Employees that are eligible can opt for ConnectedCare this fall during open enrolment period, which starts at the beginning of 2019. Annual premiums are set to be $300 to $900 less expensive than the current low-cost option.
GM is reportedly still planning to offer its two PPO plans through Blue Cross Blue Shield.
Sheila Savageau, GM’s U.S. health care leader, said that when the company goes “direct to health system, they are held accountable to health” of our employees. “That leads to accountability in cost performance and focused improvement in the health of the GM population.”
The transition took GM about three years to start, and is what Savageau calls a “value-based” health care payment built on a foundation of trends they observe in the health care industry.
“We saw this happening and said, ‘If we don’t transition with the rest of the industry we will end up on the other side of this balloon, and eventually that balloon will pop,'” Savageau said. “We were looking at possible increased costs.”
“We are very committed to addressing the affordability of health care – offering exceptional care while bending the cost-curve for consumers in the communities we serve,” said Henry Ford Health System CEO Wright Lassiter. “Given our experience in delivering value-based care, and our extensive physician network, we are uniquely poised to create a truly innovative solution for GM, their employees and families.”