Toyota builds employee health clinic in new factory to reduce health care costs

Nov 8 2006

In an effort to contain health care spending, Toyota Motor will construct a $9 million medical clinic for employees and their families at its new San Antonio truck factory, the Detroit News reports.

The clinic will "provide a wider array of treatments and services than a typical factory medical office," including eye care, dental services, pediatrics, laboratory tests and physical therapy, according to the News. Toyota's U.S. health care costs have doubled over the past five years to more than $11,000 annually per plant worker, according to Ford Brewer, assistant general manager for health and wellness at Toyota's North American manufacturing headquarters. The decision to offer more comprehensive services onsite means the company likely will spend more for primary care and prescription drugs, but the additional costs should be offset by a drop in more expensive hospitalizations and specialty care, according to Toyota. Onsite clinics also reduce absenteeism. The clinic, which will be operated by CHD Meridian Health Care, initially will be staffed by two full-time doctors and one part-time doctor, but Toyota expects to increase the medical staff to as many as seven doctors once the plant becomes fully operational. By spring, the plant will employ about 4,100 workers. Toyota will measure the success of the clinic by monitoring employees' health indicators, such as smoking cessation rates and blood pressure levels, and by tracking expenses. Toyota will not require employees to use the clinic but will charge higher copayments and deductibles for workers who seek care elsewhere, according to the News.

San Antonio plant manager Hidehiko Tajima said that if the clinic is successful, the company will "spread the concept to other plants." Ronald Harbour, president of Harbour Consulting, said, "From a cost control standpoint, it certainly makes sense." He added that U.S. automakers are frustrated by the rapidly increasing costs of health care and "feel they have very little control over the cost and over how effectively the money is spent. This is one answer." Auto industry experts say that privacy concerns about seeking care at a company-operated clinic might deter some workers. United Auto Workers spokesperson Roger Kerson, who did not comment on Toyota's plant specifically, said, "The primary concern of our members is that the interest of the patient always comes first in any health care delivery system" (Tierney, Detroit News, 11/8).