Healing The Auto Industry

August 19, 2005
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DETROIT — One of the year’s most important automotive conferences will feature a key address on one of the most important problems facing automakers and suppliers.

The Automotive Industry Action Group (AIAG) is hosting AutoTech 2005 from Aug. 29 through Sept. 1 at the CoboConferenceCenter in Detroit. New to this year’s event, which has the theme “Streamlining the Industry,” is an Industry Leadership Council to take place next Monday.

AIAG has lined up what it calls seven “heavy hitters” who will comment on vital issues, concerns and trends that are impacting the global supply chain. One of those scheduled to speak is Robert Moroni. He directs health-care plans for General Motors Corp. and his address is titled “Healthcare Costs and the Automotive Industry.”

“The overarching message is why we all need to help improve the U.S. health-care delivery system. ‘We’ meaning the public, ‘we’ meaning the suppliers, ‘we’ meaning employers — because this is a U.S. competitiveness issue,” said Moroni in a telephone interview.

“I’ll probably do a little bit of comparing the U.S. to other countries and talk about what it means from a GM perspective in some dollars and cents,” he said, while adding that his address was still a work-in-progress.

“As people doing business in this country, we have to take a leadership role in helping to fix the problem.”

Moroni said employers not only have a problem with the system’s high costs but also are concerned about the quality of care the system produces. He cited an Institute of Medicine report from a few years back that found that 98,000 people needlessly die each year because of the health-care delivery system.

He said that startling statistic prompted a number of employers to form a group called Leapfrog, which has dedicated itself to improving the system. Moroni plans to encourage those who attend the council to join Leapfrog and turn the group’s practices into demands on their insurance carriers.

Moroni also said he would discuss changes to public policy that would add transparency to hospitals and physicians — such as incorporating Medicare data into their decisions — and would share his thoughts on medical liability reform and catastrophic medical insurance.

As for his worldwide comparisons of delivery systems, Moroni said the result is the same, in both cost and quality, no matter which foreign country — whether it’s Germany, Canada or Japan — he uses to compare with the system in this country.

“It’s certainly less expensive care, if you look at it on an adjusted basis like health-care spending per capita. But the fact is, more money has not increased the quality of care in this country. A lot of the data also suggests that even though we’re paying more, on the 16 health indicators that are used to commonly rank health-care systems across countries, we come in as the second from the lowest,” he said.

“So we’re spending all this money, but we’re not even living as long as the people in Canada are. If you look at the average ranking of health indicators, we come in 12th out of 13, and Canada comes in third.”

Moroni said every vehicle that GM produces in this country carries a health-care cost of $1,525. GM Canada has reported that cost to be $120 for each car made in Ontario, which analysts said recently became the top North American location for U.S. auto production.

“(The cost) is significantly less in Canada because it is part of the taxation system vs. borne by employers. There are still some things that employers pay for in Ontario, like prescription drugs for active workers. So it’s not that there is no cost, but it certainly is less,” said Moroni

Moroni was asked what he thought would happen to automobile manufacturing in this country in the coming years if the nation’s health-care system continues as is and doesn’t undergo some reforms.

“I’m not even going to touch that one,” he said. “The only comment I can make on that is, this certainly is a U.S. competitive issue and it’s something that we all need to work on together.”    

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