So those plans to cut retiree health benefits? They're backfiring:
The auto industry's efforts to rein in employee health costs is drawing an expensive reaction, as union workers and their spouses hurry to Michigan doctors for knee replacements and other elective procedures before they lose their comprehensive medical benefits.
Hospitals, doctors and insurers have all noticed a surge in demand for elective surgery since last year when Rick Wagoner, the chief executive of General Motors, led a public relations campaign to prepare auto workers for health care cutbacks, and Delphi, the G.M. parts supplier, filed for bankruptcy protection. Hip, knee and shoulder replacements at the Henry Ford Health System were "up 20 percent in the second half of last year and remain strong," said Robert Riney, chief operating officer of the system, the largest hospital group in the Detroit area.
On the other hand, it remains much cheaper than covering all these workers' benefits for the long term. And in some weird way, it probably gives the auto industry a sense that they've fulfilled some obligations, if they're able to say,"Listen, we paid for x number of joint replacements and elective procedures before dropping coverage. And they've got Medicare."