DETROIT – Top executives from the U.S. Big Three auto makers Monday formally endorsed broad federal initiatives designed to create a so-called “value-driven” health-care system with a goal of lower costs and improved quality for consumers.
The executives from Chrysler Group, Ford Motor Co. and General Motors Corp. signed off on the government “cornerstones,” presented by Michael Leavitt, secretary of the U.S. Department of Health and Human Services.
Leavitt, speaking at the Detroit Economic Club, says President Bush signed an executive order in August requiring the federal government to implement the four goals. They include mandating the use of electronic, instead of paper-based, medical records; increased access to information on the best-performing hospitals and health systems; transparent and comparable information on costs for medical procedures; and incentives rewarding health-care providers to keep costs low and quality high.
“The federal government pays for nearly 40% of all health care in this country,” Leavitt says. “Without federal leadership it’s simply been impossible to achieve the critical mass that’s necessary to change the system. At this point forward, if you want to do business with the federal government there will be four requirements.”
Health care is expected to be a dominant issue this spring when the domestic auto makers begin collective bargaining with the United Auto Workers union. The auto makers pay upwards of $1,500 per vehicle just in health-care costs for workers and retirees.
In endorsing the goals, the Big Three agree to require current and prospective health-care vendors adhere to the same principles outlined by the federal government.
“This will not only increase the value of the care people receive, but it also will improve the overall health-care system,” Ford Chairman Bill Ford says.
The OEMs already are implementing some of the federal goals on their own.
“We know firsthand what can be accomplished when the public and private sectors come together to support value-driven health care,” GM Chairman and CEO Rick Wagoner says, citing the electronic prescription program the auto maker recently launched.
Chrysler President Tom LaSorda says the health-care industry needs to follow the same business environment as the automotive industry, where consumers can easily compare products, quality markers and prices.
“When we look at health care, we have to make sure it’s transparent in pricing, which includes drugs and what people are paying on the open market,” LaSorda says.
The executives, some of whom have met previously with Leavitt, did not throw their support behind a more controversial Bush Admin. goal.
Outlined during his recent State of the Union Address, Bush wants to offer tax breaks to people to encourage them to buy health insurance on their own, while taxing some with employer-provide health coverage. Critics say Bush’s plan would undermine employer-based group coverage and wouldn’t substantially help the uninsured.
“(The auto executives) indicated a real interest. They obviously need to find out more,” Leavitt says.
A GM spokeswoman says the OEMs still are mulling Bush’s proposal, which has not been approved by Congress and faces opposition from Democrats.