Controlling health care costs at General Motors.

Abstract

Prologue: “What's good for GM is good for America, “ Charlie Wilson, the corporations colorful chief executive officer once declared in the 1950s. Assuming that Wilsons assertion is valid, then Americas providers of medical care should he carefully studying the quiet transformation that General Motors (GM) is undergoing in the way it finances health care. General Motors is among the vanguard of American corporations that are experimenting with a variety of new hospital and physician payment incentives. Ranging from increased employee copayments to the installation of major athletic and wellness facilities that encourage healthy lifestyles, the methods used to reduce costs are as diverse as the companies that pay the hills. GM's alternative scheme, which it designed in concert with the United Auto Workers, is one of the more innovative; if successful, it could have profound effects on company health plans throughout the country. Called the Informed Choice Plan, the agreement gives GM employees, their dependents, and retirees a choice of three types of coverage: health maintenance organizations, preferred provider organizations, and a fee-for-service option. In this essay, Linda Demkovich, director of communications at George Washington University's Intergovernmental Health Policy Project and the National Health Policy Forum, traces the origins of this new health package and outlines the major components of the plan which attempts to cut costs while encouraging high quality health care. Demkovich has been writing about health care issues for nearly a decade. Most of these years were spent at National Journal in Washington, D.C. where she worked from 1974 to 1985.