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From the Detroit Insider:

Chrysler ramps up plan to cut health costs

Automaker works to educate employees on health issues, pressures doctors to bring change.

Sharon Terlep / The Detroit News

LANSING -- DaimlerChrysler AG's Chrysler Group laid out a strategy Wednesday to slow its soaring health care bill, which the automaker says will double by 2013 at the current rate of growth.

On one front, Chrysler plans to redouble efforts to promote healthy habits among employees. At the same time, it said it will throw its financial and political clout behind improving the delivery of health care in communities where the company has a major presence, said Kate Kohn-Parrott, Chrysler Group's director of integrated health care and disability.

Speaking at the Michigan State Medical Society's annual meeting, Kohn-Parrott detailed a multi-pronged plan that combines employee wellness programs, community activism and structural changes in insurance coverage, such as paying doctors more for keeping health costs down.

Chrysler predicts that the company's health tab will jump to $4.4 billion in 2013 from $2.3 billion in 2006 barring a major change. The company spends an average of $1,400 per vehicle to insure its 360,000 workers, retirees and dependents. That's compared to $450 per vehicle spent on steel.

"We can't sustain that type of cost increase," she said. "Our customers will not pay for it."

Detroit's Big Three automakers are weighed down by health care costs for workers and retirees that last year reached a combined $10 billion. Company leaders have tagged those costs as a key factor holding them back from competing with Asian rivals.

While each of the automakers have spoken out on the issue, Chrysler has been the most vocal and, some say, most forward-thinking in making changes.

Chrysler, for example, is one of the only companies to offer employees health savings accounts that provide financial incentives for employees to purchase preventive services.

"They really make you aware of your health," said Calvin Buckmaster, who works at Chrysler Jeep in Toledo. He's grown used to receiving health-related fliers at work and home and seeing on-the-spot testing sites set up at the plant. He's received cholesterol tests at work about a half-dozen times in the last few years.

"Some people just do them religiously," he said.

The rate at which employees control their blood sugar levels and cholesterol increased 9 percent and 3 percent, respectively, under a program started in 2005 to reward workers for participating in health-related education programs.

In 2006, the company will launch an information campaign to get more workers to go to the doctor and will educate them on the type of questions they should ask. Later this year, Chrysler also will launch a program aimed at workers and retirees at risk for heart disease.

Meanwhile, the company will work with the Greater Detroit Area Health Council to implement pay-for-performance systems of reimbursement among area health providers. Under such systems, physicians and hospitals get rewarded for providing care at a lower cost. Often, providers lose money when they provide efficient care because the patient requires less services or is out of the hospital more quickly.

Chrysler has similar partnerships in Delaware, Indiana and Wisconsin.

"You can't cut the cost of health care without cutting benefits. But when you cut benefits, people stop going to the doctor and other issues arise," Kohn-Parrott said. "We need to provide employees with better tools to drive their own health care."

Some in the medical community worry that pressuring health care providers into cutting costs could undermine the quality of care.

Statistics that are increasingly used to determine how efficiently providers deliver health care services are one factor in the overall quality of care and often are outdated and difficult to understand, said Dr. Edward Christopher Bush, a Riverview family practice doctor who listened to Kohn-Parrott speak at Wednesday's event.

"They're not going into the doctor's office and looking at charts and listening to patients, Bush said.

Bush said he was impressed by Chrysler's wellness initiatives but worries that employers may be reaching people too late in life to be effective.

Healthy habits "are something you have to learn in schools and as a child," he said.

Many of the ideas Chrysler is implementing have been around for years, but experts are only now learning to fine-tune and direct them in a way that produces measurable results, said Anne-Marie Audet, vice president of the Commonwealth Fund, a New York-based health policy foundation.

A key aspect to being successful will be to tailor health programs to individual communities. Workers in Michigan, where diabetes and heart disease are major problems, would have different needs than those who work in plants in Wisconsin, she said.

"Employers have the leverage when it comes to effecting quality," she said. "Given that they're the ones who pay for the majority of health care in this country."
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