Healthcare Business Week in Review: High Cost of Smoking; 4 Healthy Habits; Expanding Medicaid

Thursday, June 13th, 2013
This post was written by Cheryl Miller

The High Cost of Smoking: Smokers cost more. That’s the bottom line from a new report from Ohio State University, the first study to take a comprehensive look at the financial burden for companies that employ smokers.

According to the study, U.S. businesses pay almost $6,000 per year extra for each employee who smokes, compared to the costs for employing workers who never smoked. Broken down, researchers estimated the following:

  • Lost productivity from smoke breaks cost employers more than $3,000 a year, by far, the largest drain on resources;
  • Extra healthcare costs for self-insured smokers came to $2,056;
  • Absenteeism from smoking cost $517 a year; and
  • Presenteeism, or reduced productivity related to the effects of nicotine addition, cost $462 annually.

The study focuses solely on economics and does not address ethical and privacy issues related to the adoption of workplace policies covering employee smoking. Increasingly, businesses have adopted tobacco-related policies that include requiring smokers to pay premium surcharges for their healthcare benefits or simply refusing to hire people who identify themselves as smokers. And while researchers acknowledge that providing smoking-cessation programs is an added cost for employers, they stress that employers recognize how difficult it is to quit smoking.

4 Healthy Habits to Reduce Heart Risk, Death: More bad news for smokers: those who otherwise maintain a healthy lifestyle will die sooner than those who do not.

According to a new study from Johns Hopkins University, exercising regularly, eating a healthy Mediterranean-style diet, maintaining a normal weight and, most importantly, not smoking can help improve heart health and reduce the risk of death.

Researchers found that adopting those four lifestyle behaviors protected against coronary heart disease as well as the early buildup of calcium deposits in heart arteries, and reduced the chance of death from all causes by 80 percent over an eight-year period.

Of all the lifestyle factors, researchers found that smoking avoidance played the largest role in reducing the risk of coronary heart disease and mortality. Smokers who adopted two or more of the healthy behaviors still had lower survival rates after 7.6 years than did nonsmokers who were sedentary and obese.

The findings corroborate recent recommendations by the American Heart Association, which call for maintaining a diet rich in vegetables, fruits, nuts, whole grains and fish, keeping a Body Mass Index (BMI) of less than 25, being physically active and not smoking, researchers note.

Expanding Medicaid Best Option for States: Some bad news, or food for thought, for those policymakers not planning on expanding Medicaid in their states: they will leave millions of their residents without health insurance and increase spending, at least in the short term, on the cost of treating uninsured residents, according to a new RAND Corporation study.

If 14 states decide not to expand Medicaid under the ACA as intended by their governors, those state governments collectively will spend $1 billion more on uncompensated care in 2016 than they would if Medicaid is expanded, researchers say. In addition, those 14 state governments would forgo $8.4 billion annually in federal payments and an additional 3.6 million people will be left uninsured.

States that do not expand Medicaid will not receive the full benefit of the savings that will result from providing less uncompensated care, researchers note. But they will be subject to taxes, fees and other revenue provisions of the ACA.

Commercial Payors Lag Behind Medicare in Offering ACOs: And lastly, commercial payors aren’t offering as many upside-only payment structures that are most popular among early accountable care organizations (ACOs), according to an analysis by the Premier Healthcare Alliance.

The study of 85 payor arrangements found that more than one-third were for upside-only shared savings, most of which fall within the Medicare Shared Savings Program (MSSP) or Medicare Advantage (57 percent).

Other upside-only options were reported with Medicaid (7 percent), provider-owned plans (7 percent) and self-insured employers (7 percent).

However, upside arrangements are lacking in commercial markets. Among the ACOs analyzed, only 21 percent of commercial arrangements offer upside shared savings, and these were clustered in just four markets. In addition, agreements tended to be smaller in scope, usually for 5,000 covered lives or less.

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