The big three automakers, faced for years with looming health care expenses for their workers and retirees, are trying to figure out new ways to lower costs.
Ford, which spends $7 an hour on health care for its current hourly workers, is expanding an experimental wellness program that it launched two years ago for chronically ill employees. The 1,200-1,500 workers selected at first were chronically ill workers and retirees who are not eligible for Medicare.
The Detroit Free Press reports that the program has gone beyond its initial 24-month experimental phase and has been extended through the end of 2015 in an effort to gather more data on its impact. Company officials are still not discussing the results of the study with media, however.
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The program imitated a similar initiative set up at Boeing, where former Ford CEO Alan Mulally worked as a top executive before moving to Ford in 2006. The Boeing program is said to have lowered health care costs by 17 percent for participating employees.
The plan involved hiring 12 nurses to regularly meet with chronically ill workers and guide them through the process of following a health plan. The company and the retiree trust paid for the program, which was entirely confidential. Doctors selected employees eligible for the program, but neither the company or the United Autoworkers (UAW), the union representing Ford workers had access to the names of participants.
The wellness program comes in the midst of tense negotiations between Detroit car manufacturers and the UAW over a new contract over wages and benefits for 140,000 active autoworkers.
Chrysler, the first company to approve a tentative agreement with the UAW (pending approval of union members), agreed to switch to a health co-op including Ford and GM workers in an effort to negotiate better health care deals with insurers. That idea is of course far from being realized, however, since it requires the participation of the two other auto companies, who have not agreed to contracts with the UAW yet.
For years, all big three auto companies have had wellness programs in place for non-union salaried workers that reward participating employees with lower premiums and other incentives. Such programs have not yet been put in place for unionized workers.
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