* New program to provide personal care to small group of
* Encourages workers to treat illnesses earlier, save money
* Ford, UAW pilot modeled after Boeing program
* Five diseases account for 61 pct of Ford's healthcare
By Deepa Seetharaman
DEARBORN, Mich., June 24 Ford Motor Co is
launching a two-year pilot program with the United Auto Workers
and a UAW-affiliated retiree healthcare trust aimed at lowering
medical costs for the second-largest U.S. automaker's active and
retired hourly workers.
Between 1,200 and 1,500 unionized workers and retirees in
southeastern Michigan with chronic but manageable diseases are
expected to join the pilot program, the automaker, the union and
the UAW Retiree Medical Benefits Trust said on Monday.
Under this program, Ford, the UAW and the trust hope to cut
healthcare costs - rather than shift the burden to others - by
encouraging workers to treat and address health issues earlier
rather than wait until conditions grow more severe and therefore
more expensive. It is an effort to "bend the cost curve,"
according to Marty Mulloy, Ford's vice president of labor
In recent years, Detroit's automakers have struggled to cope
with runaway healthcare costs for their hourly and salaried
workers. Ford spends $7 an hour on healthcare for its 44,500
active hourly workers in the United States. About 61 percent of
annual healthcare costs for Ford and the UAW trust stem from
five chronic diseases, including diabetes, asthma, coronary
artery disease, congestive heart failure and chronic obstructive
By tackling problems earlier, Ford can lower its healthcare
costs, Mulloy told reporters during a media briefing at the
company's headquarters. That could help the UAW trust, which
assumes the burden of healthcare for Ford's unionized workers
once they retire.
The UAW trust spends $4.5 billion a year on healthcare for
800,000 retirees from General Motors Co, Ford and
Chrysler Group LLC.
The pilot is modeled after a program at Boeing Co,
where Alan Mulally was a top executive before joining Ford as
its CEO in 2006. In the Boeing program, medical costs for the
participating workers fell 17 percent after two years.
Participation in the pilot is voluntary and workers will be
recommended to the program by their doctors. Only non-Medicare
eligible retirees can join the pilot program.
Participants will have access to one of 12 personal care
nurses who will help patients navigate the healthcare system and
track their progress. Each nurse will handle a maximum of 125
cases a year.
Both GM and Chrysler are in talks with the UAW about a
similar program for active hourly workers, said Susanne
Mitchell, director of the UAW's Social Security department.
Ford and the UAW began to broach the subject of lowering
healthcare costs before the 2011 labor talks. Officials from the
company, union and the trust visited Boeing and discussed nurses
and doctors involved in the plan.
The participation of retirees differentiates the Ford
program from Boeing's example. The trust was created in 2007
during labor talks with the UAW to take on the retiree
healthcare burden from GM, Ford and Chrysler.
The landmark deal was designed to protect UAW retiree
benefits if the companies' finances deteriorated and to remove
an ever-increasing liability that the automakers said added as
much as $2,000 to the cost of a vehicle.
But rising healthcare costs have widened the trust's funding
shortfall. In 2010, the first year of the trust's operations,
the trust was underfunded by $20 billion. In 2011, the most
recently available data, the shortfall grew to $33 billion.
"A lot of what you hear in healthcare today is
cost-shifting," said UAW's Mitchell. "This is not
Ford and the trust will pay for the salaries of 12 personal
care nurses and consultants who are part of the pilot program,
which kicks off on July 1.