GM inks innovative deal to cut employee health care costs

General Motors has partnered with an integrated hospital system in Michigan to offer its employees potentially cheaper and more comprehensive health care.

The Henry Ford Health System announced on Monday that, together with GM, it will offer its first ever “direct-to-employer” health care contract.

The Henry Ford Health System is a non-profit health care organization in Detroit that provides both insurance and care. The plan will be called GM ConnectedCare, and is expected to be offered to nearly 24,000 of the automaker’s employees and their families who live in the area beginning in 2019.

“GM's upcoming ConnectedCare option comes from our ongoing quest to improve employee health, while also seeking to offset rising health care costs for both the employee and the company,” Sheila Savageau, U.S. healthcare leader at GM, said in a statement.

The move differs from the current model under which companies hire insurers to gain access to a greater number of providers. By striking a deal directly with the integrated hospital system, the idea is that it will cut costs by allowing the company to negotiate directly with the service provider.

For eligible employees who opt in to the plan, ConnectedCare is expected to shave anywhere from $300 to $900 off their costs annually, when compared to the cheapest option currently offered. Workers, however, will be able to choose to continue using their current plans.

Subscribers to the new plan will have access to more than 3,000 health care providers, according to a press release. They will receive primary care, specialty care, hospitalization, pharmacy and other services, while the Detroit-based hospital system has agreed to provide same-day or next-day appointments.

GM signed a five-year contract with the Henry Ford Health Systems.

Other prominent U.S. companies, like Intel and Boeing, have already begun testing direct health care delivery deals.