Lessons from General Motors direct healthcare contract
WASHINGTON — General Motors spends $1.1 billion on employee healthcare every year.
With a workforce topping 180,000 employees and an average age of 46, the vehicle manufacturer needed a way to reduce the cost of care while simultaneously helping their workforce get healthier.
So at the beginning of the year, GM launched a five-year direct contract healthcare with Henry Ford Health System, to provide wellness and medical services to about 24,000 employees throughout Southeast Michigan. The partnership included a new plan option for employees called ConnectedCare, which gives salaried workers access to more than 3,000 primary and specialty care doctors.
“Our mission was to improve the quality, reduce the cost, eliminate the waste and simplify the experience a member receives,” said Sheila Savageau, U.S. healthcare leader at General Motors at the National Alliance of Healthcare Purchaser Coalitions’ Annual Forum.
Some employers are choosing to direct contract with local health systems to circumvent insurers and save money. Boeing, for example, has a direct contract with MemorialCare Health System in for its 37,000 employees and dependents in Southern California. In some cases, health systems have sought out employers and unions for direct contracts. Big employers such as Walmart and General Electric have also used direct contracting.
In GM’s case, employees using the plan often receive deep discounts for their healthcare through direct contract with Henry Ford. The company also found that the lowest cost providers were often administering the highest quality care. Henry Ford and GM use nine different quality measures to determine which providers are the best.
Educating employees about how to select the best doctors at the most affordable price is important with a direct contract, Savageau said.
“It was the highest impact way to actually impact care in our population,” she said.
The Henry Ford program also uses a concierge service to direct employees to the best place to receive care for a specific health problem. For example, going to a walk-in-clinic as opposed to the emergency room for a minor illness. Workers also receive digital access to their health charts.
“With the concierge service, [employees are] connected through and immediately put in the right system with the right care in the right place,” she said.
GM strives for the program to be as holistic as possible for employees. To do this, making the system more streamlined and less confusing was key, Savageau said.
“We live in a very disconnected, fragmented healthcare system,” she said. “We wanted to make sure it was integrated.”