Carrots Sticks Smokes

September 26, 2005
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GRAND RAPIDS — A few years ago, cigarettes cost about two bucks a pack. Now they “cost” about two bucks a piece.

Michigan smokers might make a run for the Indiana border if local retailers were to price cigarettes at $40 for a pack of 20 smokes, but scientists say that would be a fair price when considered in the context of costs to the individual, his or her family and the general public. Employers have begun to take notice, and some have plans to do something about it.

In the state of Michigan, the average price for a pack of cigarettes is $5.50, but numerous studies have shown lower productivity and higher absenteeism among smokers. Smokers pay more for auto, life and homeowners insurance. Smokers often make less money than non-smokers. The resulting $40 per pack cost is estimated in “The Price of Smoking,” a book recently published by researchers from DukeUniversity

The Alliance For Health recently presented “Smoking Policy Update,” as part of its First Friday series at DavenportUniversity. The lecture confronted the costs businesses pay for employing smokers. It also offered some potential solutions from business leaders with first-hand experience.

Howard Weyers became an anti-smoking celebrity last year when WEYCO, the Okemos benefits-management company of which he is president and CEO, decided it would no longer hire smokers. Weyers then upped the ante, by implementing a policy that WEYCO would no longer employ smokers — even if they never smoked during work hours. Weyers believed that the public health risks, and costs, were simply too high to justify keeping smokers on staff.

Weyers began subjecting his existing employees to random — later mandatory — urine tests, screening for tobacco use. On Jan. 1 of this year, the blunt and straightforward former football coach delivered a message to his employees: “You fail the test or you refuse to take the test: You’re out!”

WEYCO’s policy has been widely criticized in the national media, but it also drew the attention of business leaders in Michigan, including Doug Peterson, vice president of human resources for Shape Corp., an automotive components manufacturer in Grand Haven. Providing health coverage for the company’s 1,400 employees cost the company $8.8 million in 2004. Peterson was not happy about that.

At the Alliance for Health event, Peterson described how his company is moving forward with a plan to reduce the number of smokers it employs. By the end of the year, the company will have reached a major milestone, as all of its facilities will become completely smoke-free. He also has implemented a plan that gives employees financial incentives to improve their health through means such as exercise and quitting smoking. Although Weyers’ zero-tolerance policy has been effective for WEYCO, plans like Peterson’s — which emphasize the carrot over the stick — seem to be gaining more favor in the wider business community.

They are popular with health insurance providers, as well. Grand Rapids-based Priority Health, for example, has begun to partner with businesses to develop incentives-based health improvement plans. Priority calls the program HealthbyChoice.

“HealthbyChoice uses economic and behavioral factors, along with different wellness tools and resources with the ultimate goal of improving health and reducing health-care costs,” said Wendy Wigger, director of wellness for Priority Health. Priority Health and its partner health-care providers supply those “wellness tools and resources”; it’s up to the employers to provide the economic drive.

“We expect that they will provide some kind of financial benefit or some significant kind of a motivator,” said Wigger. These are frequently cash bonuses, though extra time off is also popular among the companies Priority works with. “That (incentive) then drives their employees to better health practice. … Long-term, sustainable improved health behaviors will lead to better health outcomes and reduced health-care expenditures.”

The financial benefits encourage more people to become involved in wellness programs, Wigger said. In Priority’s experience, between 12 percent and 65 percent more employees have taken advantage of the wellness program when cash or other benefits are offered as incentives. When employees get involved, they undergo an initial health analysis. Sometimes this analysis discovers previously undetected health problems like diabetes or even cancer. When such conditions are discovered early on, they have a substantially lower cost impact.

Specifically addressing tobacco use, Wiggers said employers need to examine their corporate culture. The wellness plans may not work well if the employer doesn’t have a comprehensive tobacco-reduction policy for its workers. This usually starts with the choice to make the entire workplace smoke-free. Wiggers also said it is important to remember that only one quarter of Americans smoke.

“So do you focus all your energy on the people who are angry because you’re implementing a tobacco-free policy, or do you look at the majority of people who are excited and happy about it?” she said. The way the company chooses to deliver that message makes a big difference in the success of the program. Wiggers said it is often better to “reward and celebrate” everyone who doesn’t smoke as opposed to “punishing” those who do.

But Weyers is more into the stick than the carrot.

“WEYCO is proud of its stance on smoking and wellness,” he wrote in defense of his policies. “For every smoker who quits because of it, there will be many people — family members, friends, co-workers — who are very thankful the person won’t be going to an early grave.

“Next, I’m going after the spouses,” he said.

While it seems that he cannot legally fire an employee for having a spouse who smokes, Weyers said he can condition the availability of health benefits on that criteria.

“If you’re coming on to our medical plan, you’re not going to be on drugs or tobacco,” he said.

Weyers believes that it will take three to five years for him to see the real “bottom line” results of his no-smoking policy. He hopes that he might be able to encourage insurers to create a new class of coverage — a plan that would only be offered to companies that don’t employ smokers.

“I would think we could go to providers and say, ‘We’ve cleaned it up and we’re smoke-free. What’s that worth for us?’”    

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