TRAVERSE CITY -- Auto suppliers expect health care costs to increase 10 percent a year for the next five years, but some have been able to cut that number.
That's according to a survey released Thursday by the Center for Automotive Research and the Original Equipment Suppliers Association.
Auto suppliers spend $8 billion a year to insure employees, or about 21.5 cents of every labor dollar. Health care inflation reached 10.6 percent in 2003 and 10.3 percent in 2004, and that trend shows no signs of abating.
In fact, suppliers surveyed expect health care inflation of 11.3 percent this year.
But the survey found that suppliers which cut their health inflation to single digits did more than push costs down to employees and cut benefits, said David Andrea, vice president of business development for the suppliers association.
The suppliers with the best health care cost improvements also managed health care use better and managed their administrative costs in addition to increasing the employees' share of those costs.
"The better firms are looking at a balanced approach," Andrea said.
Rochester Hills, Mich.,-based Dura Automotive Systems Inc. cut its annual health care cost increase from 12.8 percent in 2002 to 6.7 percent in 2003. Dura insures about 8,000 U.S. employees and spent $50 million on health care last year.
Dura reduced the number health care plans from 27 to five, reduced vendors from 18 to two and looked for provider and pharmacy discounts and disease management.
"We think we're on the right track," said Theresa Skotak, Dura's vice president of human resources.