Henry Ford, GM Enter 'Direct to Employer' Contract

Henry Ford Health System and General Motors have signed what they're calling a first-of-its-kind "Direct to Employer" contract to provide care for the automaker's 24,000 employees and their families in Southeast Michigan.

The plan, called GM ConnectedCare, would cost employees $300 to $900 less in annual payroll contributions than the automaker's current cheapest plan and would require them to get all their health care, including surgeries, through Henry Ford Health System, or pay expensive out-of-network rates.

"Partnering with a regional healthcare leader like Henry Ford Health System enables us to provide an innovative new plan option for high quality, affordable care", she said.

The offering is known as GM's ConnectedCare plan option.

Though the cost and quality benefits of such arrangements may sound tempting to employers, the contracts are typically complicated to administer and generally work only if an employer has a sizable employee base in one region, experts warn.

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The partnership "comes from our ongoing quest to improve employee health, while also seeking to offset rising healthcare costs for both the employee and the company", says Sheila Savageau, GM's USA healthcare leader.

In GM's case, the company hopes the partnership will improve employee wellness and take aim at employees' chronic conditions. Walmart, Whole Foods, Walt Disney, Boeing and Intel have all made inroads in negotiating their own terms with healthcare providers - some more ambitiously than others.

Ford Motor Co. tried a similar initiative In the late 1990s, called Partnership Health, which involved direct partnership with the University of Michigan's hospital system.

Yet not all is rosy in the direct-to-provider space, as such contracts can be hard to sustain due to ambitious targets and stringent financial requirements. The health system will also help members choose the right care options, such as walk-in clinics rather than emergency rooms for minor illness and injury. That experiment began in 1998 but lasted only a few years because of low participation.

Yet the direct-to-provider move, and the dissatisfaction with the status quo it implies, may give payers the necessary jolt to revamp their platforms and provide more customization for employers.

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The hospital system will have cost targets for keeping GM's workforce healthy. If it achieves or exceeds the targets, there would be shared savings between GM and Henry Ford.

In this way, the two companies share risk and reward, and turn away from models that incentivize volume of medical services over value. The two companies are partnering with Blue Cross Blue Shield of MI to manage claims-processing, pharmacy benefits and other functions.

ConnectedCare will provide access to more than 3,000 providers in the seven participating MI counties.

The plan will give nearly 24,000 GM salaried employees and their beneficiaries access to over 3,000 providers in seven counties offering primary care, specialty care, behavioral health, emergency care and more. Participants will have access to same-day or next-day appointments with a primary care physician and the ability to see a specialist within 10 business days.

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