Toyota Health Costs

Toyota is set to build one of the most-equipped factory medical facilities in history. The Japanese automaker has experienced much expansion of their industry in the US in recent years, but is faced with one major challenge that they now plan to resolve. Over the years, factories has faced soaring health costs for employee treatment and while some, like Detroit automakers brought up the issue, Toyota has decided to act upon it. Most factories and plants are required to have a medical office where employees can get some first aid pharmaceuticals and popular over the counter medication for generic illnesses and temporary conditions. However, these offices are ill-equipped to handle the full range of health services required. According to Ford Brewer, Toyota health costs have soared up to $11,000 per worker per year for US plant workers. Brewer is Toyota’s health and wellness assistant general manager at the NAMP (North-American Manufacturing Plant) headquarters.

Building a modern health facility within the factory

The ever soaring Toyota health costs have pushed Japanese giant automakers to consider building a fully equipped modern health facility within their newest manufacturing plant. Their latest expansion in San Antonio includes a design that features a factory clinic as a way to reduce some of these employee medical expenses. Unlike any other factory medical office, this clinic is set to offer a myriad of health-care services ranging from eye and teeth repair to laboratory tests and therapies. This is no typical factory clinic and it has drained some $9 million to become a realization. Workers at the new San Antonio plant will be able to enjoy services such as eye checkups, dental checkups and repairs, a wide range of pediatric services, physical therapy and laboratory tests. According to Mr. Brewer, the move was a bold step they have never repeated elsewhere although this is in line with one of their bedrock principles, “Kaizen” which simply refers to continuous improvement. Mr. Brewer further added, “By improving quality, we reduce cost.”

A new movement to emulate

Toyota soaring costs are mirrored by every other major manufacturing plant and it will be interesting to see whether other companies will emulate what Toyota is doing. The clinic is one of a kind designed for Toyota employees, their families and business suppliers. Hopefully, visitors that fall sick within the facility may get some form of first aid treatment before they are transferred to another hospital. Hidehiko Tajima, the plant manager shared his view concerning the new development, “If it is successful, we will spread it to other plants.” Evidently, Toyota intends to cut down their employee medical expenses as down as possible and there is no better way to achieve this than building a fully efficient clinic in every work plant. The clinic is expected to commence operations immediately as Toyota plans to employ around 2,000 workers by spring, and employees from Adams Toyota, Kansas City are very much looking forward to this. Their suppliers will also bring in some 2,100 employees to the site. According to Ronald Harbour, president of manufacturing consultation company (Harbour Consulting Inc) in Troy, the move makes a lot of sense from a cost standpoint. Apparently, many automakers in the US are frustrated by soaring healthcare cost particularly because they have very little control and cannot effectively preside over how the money is spent.

Potential benefits of the clinic

Apart from reducing medical expenses, an onsite clinic has many other benefits that automakers believe will improve productivity and lead to success. Toyota will gauge how successful their clinic is though monitoring various worker healthcare indicators such as blood pressure and smoking cessation. They will also be able to track expenses just so they are sure the healthcare costs are reduced. Experts also believe an onsite clinic will reduce the rate of absenteeism as sick workers will be treated and their condition assessed within the plant. If it is a slight disturbance like stomach ache or morning fever, they can be treated and allowed to rest for a few minutes before resuming work.


Onsite medical facilities are however not new among automakers. Back in the 1950s Ford offered healthcare, dental services and an overnight ward with a bed within the facility. Toyota will not require employees to use the clinic, but they have measures to encourage them including charging higher company pays and offering deductibles for those that use other clinics. The trend in delivering workplace healthcare is more focused on occupational injuries; personal healthcare is a secondary objective.