Toyota's health cost cure: A clinic at the plant site
With tab of $11,000 per U.S. worker, automaker will invest $9M in San Antonia facility
By Christine Tierney
The Detroit News
pnhp.org
( These plants may be loss leaders. They are the price of free trade for the companies that have them. I'm SURE the companies would MUCH rather build the cars where the government handles the retirement and health expenses. )
Wednesday, November 08, 2006
Detroit’s automakers are not the only ones grappling with soaring health-care costs. They are becoming an issue for Toyota Motor Corp., as well, as the Japanese giant expands its U.S. manufacturing operations and work force.
“Our health care costs have doubled over the past five years,” to more than $11,000 a year per U.S. plant worker, said Ford Brewer, assistant general manager for health and wellness at Toyota’s North American manufacturing headquarters.
In designing its newest plant, in San Antonio, Toyota is trying to tackle the problem by building a clinic at the factory to provide a wider array of treatments and services than a typical factory medical office.
The workers at the San Antonio pickup plant can have their eyes checked and their teeth repaired at the $9 million clinic, which also offers pediatric services, laboratory tests and physical therapy.
“This is a major step beyond what we’ve done before,” Brewer said.
The move, however, is consistent with Toyota’s bedrock principle of kaizen, or continuous improvement.
“Typically we reduce costs by improving quality,” Brewer said. “That’s the same thing we’re doing here.”
By offering better primary care and preventive medicine, Toyota expects to rein in its health-care expenses.
Companies that have adopted this approach tend to spend more for primary care and drugs, but that increase is more than offset by a drop in costly hospitalization and specialty care expenses, Toyota said.
The San Antonio clinic is the first of its kind at Toyota, said plant manager Hidehiko “T.J.” Tajima.
“It’s for employees, their families and for suppliers. If it’s successful, we’ll spread the concept to other plants.”
Toyota will employ 2,000 workers at the truck plant by spring, while suppliers on the site will employ 2,100.
Toyota will gauge the success of the clinic by monitoring employees’ health-care indicators, such as smoking-cessation rates and blood-pressure levels, and by tracking expenses.
“From a cost control standpoint, it certainly makes sense,” said Ronald Harbour, president of Troy-based Harbour Consulting Inc., which specializes in manufacturing.
U.S. automakers are deeply frustrated by the rapid increases in health-care costs. In addition, “they feel they have very little control over the cost and over how effectively the money is spent. This is one answer,” Harbour said.
An on-site clinic also is likely to reduce the absenteeism rate.
While a clinic a few minutes from the assembly line may seem convenient to many workers, others may worry about their privacy, some auto industry experts say.
Ford Motor Co. operated a clinic at the Rouge plant in the 1950s that offered basic health-care and dental services. “There used to be a bed ward where employees were kept overnight,” said William Heckman, executive physician at Ford Motor Co.
“The trend has been to move away from doing personal care, to focusing on occupational injuries, as employees got better health-care coverage,” he said.
Ford believes most employees prefer to go to their own doctor.
Honda Motor Co. also encourages employees to choose their doctors, although it has two wellness centers at plants in Ohio offering physical therapy, massages, and exercise and nutrition classes to encourage workers to stay healthy and fit.
Toyota would not require San Antonio workers to go to the on-site clinic, but it encourages them to do so by charging higher co-pays and deductibles for workers who choose to go elsewhere.
“Is that like Big Brother providing my health-care? We had to deal with similar concerns with our pharmacies a couple of years ago,” Brewer said.
When Toyota installed pharmacies at U.S. plants to lower its drug costs, some employees expressed concerns about their privacy.
But now more than 80 percent of the drugs purchased by employees are bought from the plant pharmacies or the mail-order service, Brewer said.
A spokesman for the United Auto Workers union declined to comment specifically on Toyota’s program.
“The primary concern of our members is that the interest of the patient always comes first in any health care delivery system,” said UAW spokesman Roger Kerson. The UAW believes that a comprehensive national health insurance program, as Japan and other industrialized countries have, is the answer to the U.S. health care crisis.
While Toyota is intent on holding down health-care costs, company officials say the system also will benefit employees.
“We want to provide high-quality care,” said John Runge, manager of human resources for the Texas plant.
The clinic’s physicians will not be remunerated on the basis of how many patients they see — a payment method that encourages doctors to see as many patients as possible.
Whereas studies show doctors spend around seven minutes on average with patients in the United States, the San Antonio clinic will allot 20 minutes for a visit with a doctor.
“If a doctor spends 20 minutes with a patient, he’s likely to know more. There’s a major focus on prevention,” Brewer said.
The clinic, which will be operated by CHD Meridian Health Care, will initially employ two full-time doctors and one part-time, but expects to increase that to as many as seven doctors when the plant is fully staffed.
You can reach Christine Tierney at (313) 222-1463 or ctierney@detnews.com. |
