GM con­tracts with health sys­tem for di­rect-to-em­ployer op­tion

The au­tomaker joins the grow­ing list of em­ploy­ers part­ner­ing di­rectly with health sys­tems to pro­vide care for their em­ploy­ees

Employee Benefit News - - Contents - By Kathryn Mayer and Nick Otto

The au­tomaker joins the grow­ing list of em­ploy­ers part­ner­ing di­rectly with health sys­tems to pro­vide health­care for their em­ploy­ees.

Gen­eral Mo­tors in Au­gust inked a deal with Detroit-based hos­pi­tal sys­tem Henry Ford Health Sys­tem to pro­vide a new di­rect-to-em­ployer health­care op­tion to 24,000 of its salaried em­ploy­ees and their de­pen­dents in South­east Michi­gan.

The agree­ment — which will re­quire GM em­ploy­ees who choose the Henry Ford plan to get all of their health­care and well­ness ser­vices, in­clud­ing surg­eries, through the Henry Ford Health Sys­tem or face ex­pen­sive out-of-net­work rates — is a strat­egy model be­ing em­braced by em­ploy­ers as they try to re­duce em­ployee health­care costs and im­prove care by by­pass­ing tra­di­tional in­sur­ers.

Though the strat­egy is not widely used, it’s gain­ing mo­men­tum as com­pa­nies in­clud­ing Wal­mart, In­tel and Boe­ing part­ner di­rectly with providers. In fact, the per­cent­age of self-in­sured com­pa­nies who have some form of di­rect con­tracts with providers jumped from just 3% in 2017 to 11% in 2018, ac­cord­ing to the Na­tional Busi­ness Group on Health.

“If you talk to a lot of bro­kers and con­sul­tants around the coun­try, they’ve been push­ing for di­rect con­tract­ing as a way to save money and nar­row not only the health­care spend, but ex­po­sure to var­i­ous lev­els of qual­ity and cost vari­a­tion,” says Bret Jack­son, pres­i­dent of The Eco­nomic Al­liance for Michi­gan. “I think this is a move that we knew was com­ing. But [GM’s move] to con­tract where their head­quar­ters are, and be­ing in a mar­ket where there is a lot of hos­pi­tal com­pe­ti­tion, sends a strong sig­nal of what the fu­ture means for em­ployee ben­e­fits.”

Gen­eral Mo­tors’ new plan, called GM Con­nect­edCare, will be added as a new op­tion for the com­pany’s salaried em­ploy­ees this fall, with ser­vice be­gin­ning Jan. 1. The plan will pro­vide em­ploy­ees ac­cess to more than 3,000 providers from an ex­pan­sive net­work of pri­mary care and spe­cialty care doc­tors. Blue Cross Blue Shield of Michi­gan will man­age claims-pro­cess­ing and other func­tions.

The au­tomaker still will of­fer PPO plans to em­ploy­ees, but the com­pany ex­pects that em­ploy­ees who choose the Con­nect­edCare op­tion can save any­where from $300 to $900 a month. Seek­ing to “off­set ris­ing health­care costs for both the em­ployee and the com­pany” was one rea­son for the part­ner­ship, says Sheila Sav­ageau, GM’s U.S. health­care leader.

Though the 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. “It takes a lot in or­der to pull this type of agree­ment off,” Jack­son says. “There has to be con­stant com­mu­ni­ca­tion in terms of em­ployee ben­e­fit own­ers, and you have to keep track of a lot of mov­ing parts.”

Em­ploy­ers who en­ter into a di­rect con­tract with a health­care provider need ex­per­tise and band­width, “a lux­ury that not many have,” adds Suzanne Del­banco, ex­ec­u­tive di­rec­tor of the Cat­a­lyst for Pay­ment Re­form, an em­ployer-led health­care think tank and ad­vo­cacy group.

That’s why Jack­son says that while he ex­pects other large em­ploy­ers to jump on the trend in the com­ing years, he doesn’t ex­pect a wide­spread move­ment be­cause “most em­ploy­ers aren’t in the right sit­u­a­tion.”

But for em­ploy­ers that are ca­pa­ble, Del­banco says, “it can be a pow­er­ful way to forge a strong re­la­tion­ship with an im­por­tant source of health­care for em­ploy­ees built on the em­ployer’s ex­pec­ta­tions around qual­ity, cost and patient ex­pe­ri­ence.” In GM’s case, the com­pany hopes the part­ner­ship will im­prove em­ployee well­ness and take aim at chronic con­di­tions. Henry Ford will help Con­nect­edCare pa­tients keep track of their health with reg­u­lar well­ness ex­ams, mon­i­tor­ing of chronic con­di­tions and pre­ven­tive screen­ings for diseases like colon can­cer and de­pres­sion. GM hopes the health sys­tem also will help em­ploy­ees choose the right care op­tions, such as walk-in clin­ics rather than emer­gency rooms for mi­nor ill­ness and in­jury.

When em­ploy­ers con­tract with providers di­rectly, it can have a rip­ple ef­fect on other em­ploy­ers — even those who aren’t in a po­si­tion to part­ner like this, Jack­son says. “It’s ben­e­fi­cial not just for the GMs of the world, but for small or medium-sized com­pa­nies that don’t have the lever­age that a Gen­eral Mo­tors has,” he says. Other health sys­tems will have to adapt to chang­ing ex­pec­ta­tions, which may in­clude “pa­tients get­ting same-day or next­day ap­point­ments, or be­ing able to see a spe­cial­ist in 10 days.”

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