Tooling Coalitions Pool Health Care

September 5, 2006
Print
Text Size:
A A
A year in the making, the Michigan Tooling Group is in the final stages of establishing itself as a purchasing agent for its 15 members. In one area in particular, health care, many of its members will reap substantial and immediate benefits, with collective savings of $140,000.

A 10 percent decrease from a total $1.5 million, a handful of members will not see any improvement this year. The real benefit, explained coalition president Rocky Johnston, president of Bessey Tool & Die in Sparta, will come in subsequent years. When buying as a single unit, the group expects its yearly price fluctuations to be 40 percent less than what the small firms would incur individually.

“Since prices haven’t gone down in quite a while, we expect that to be a very good thing,” Johnston said.

The group purchasing also allows employees more plan options than they would otherwise have available. Plus, it sends a message to state and local governments that the controversial tax-free Tool and Die Recovery Zones are indeed fostering collaboration.

“This will show the state that we’re willing to pool our money together,” Johnston said. “We’ve really had to put our trust in each other.”

As the MTG has its model structured, any one of the 15 companies could topple the whole system with a missed payment. The coalition has addressed such a scenario in its bylaws, along with a contingency plan. Also, a company could find its premiums affected by a bad actor not in its employ, putting at risk the benefits of wellness programs or similar exercises.

Health care has been a topic of high interest for potential members of the locally based Toolmakers Alliance. The coalition will file its recovery zone application this month.

“It’s probably the most expensive thing any of us have to pay for,” said Mike Evans, coalition vice president and owner of Evans Tool & Engineering in Walker. “We don’t know how it will work yet, but anything we can do, the better.”

The Toolmakers Alliance is working with the same agent that helped structure the program for the MTG insurance program. Evans is not sure if the coalition will take the step to purchase its insurance as a single entity, but is investigating what leverage the increased buying power will have on the various companies’ current providers.

“We’re just collecting information at this point, but I think these are some of the things we have to look forward to, whether we get state approval or not,” said Mike Hartley of Apollo Tool & Engineering in Walker, the coalition president. “Not only in the medical field, but things like office supplies, toilet paper — we’re dealing in a global economy; anything we can do to be more competitive is a plus.”

Evans suggested that the separate coalitions could possibly pool their efforts, creating a larger coalition of coalitions with massive buying power.

Recent Articles by Daniel Schoonmaker

Editor's Picks

Comments powered by Disqus