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POLICY: Firing smokers? Who’s next?

One of my favorite non-health care policy organizations, the Drug Policy Alliance, has a flash animation out about an insurance company that fired four smokers for possibly smoking in their free time. The company allegedly believes that it’s OK to fire smokers because their health care costs are likely to be higher than other peoples.  The Drug Policy Alliance folks’ sub-text is of course that what you do in the privacy of your own home away from the workplace is your business and not anyone else’s including your employer, so long as you do a good job in your workplace, and by that they mainly mean pot-smoking.  There was also a great study a while back that showed historically that companies that drug-test their employees do worse in terms of standard business measures like productivity and stock performance than those which don’t.  And of course no one is yet alcohol-testing employees, unless it concerns taking alcohol immediately before flying a plane or something similar which impairs the ability to do a good job.

But the key points in this "firing smokers" issue were drawn home to me while watching a Harris Interactive webinar yesterday. (The webinar will likely be up here sometime soon but doesn’t seem to be up yet.) They’ve done a lot of work about the obesity problem, and as their colleague Bill Rosenberg said it’s getting clearer that there’s little point in a company trying to do anything to reduce the obesity in its workforce  — there’s no ROI there.  So the next best option to reduce health care costs is of course to get rid of those who cost the most.  Once we’ve got rid of the smokers, drinkers, druggies and perverts, then who’s next?  The obvious answer is that it’s the fat and the sick, who of course tend to be lower paid than average, which in turn means that their health care costs are a higher proportion of their overall compensation.

I also had a recent meeting with Brian Klepper and Patricia Salber of the Center for Practical Health Reform.  They believe that employers are dropping out of offering benefits rather more rapidly than the overall figures suggest, and Brian points to a study showing that only 45% of jobs come with health insurance (as opposed to 62% of people getting their health insurance via someone’s insurance), and that the percentage of jobs offering insurance is going down by up to 5% a year. And of course the amount of coverage being offered in the brave new high-deductible world is at least somewhat (and maybe greatly) less than people were used to a few years ago. They believe that this is leading to a crisis of funding for the whole system, and have some interesting ideas about what to do.

But in the absence of reform (which will last at least another 4 years) there’s a very nasty scenario in all of this.  Employers may actively start looking at their workforce with an idea of who to keep in and who to kick out, based purely on their health status.  After all insurers have done this for years, to great effect on their bottom lines.  Now that many big employers really see health care as their biggest challenge, and small employers get the picture too, what’s to stop them really looking at the pre-cursors for health care costs and getting rid of people who smoke, look fat, or like a drink, or are getting old?  Nothing really, especially as a class-action lawyer won’t take on a small company because they haven’t enough money to be worth taking down. Particularly for a small employer, they don’t have to state anything in their policies about it, or even look into medical records, as those things are pretty self-evident.

And of course the costs of this end up on the individual and the taxpayer.

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6 replies »

  1. Here’s what Howard Weyers, the guy who runs Weyco, had to say about this.
    Smoking Is Not a Civil Right: Viewpoint by Howard Weyers, President, Weyco, Inc.
    OKEMOS, Mich., Feb. 9 /PRNewswire/ — The following is a viewpoint by Howard Weyers, President, Weyco, Inc.:
    Rather than face the dangerous realities of smoking, critics of Weyco’s tobacco-free policy rush to the so-called “slippery slope” argument, imagining all kinds of dire consequences for workers.
    But the fact is, federal and state laws prohibit employers from discriminating on the basis of age, sex, race, weight, national origin, and other attributes — and smoking is not a civil right. It’s just a poor
    personal choice.
    Moreover, for other lifestyle issues, Weyco provides positive assistance — such as wellness counseling and subsidies for health club membership — in which participation is voluntary.
    So, let’s get real.
    Employment is not a right, either. Businesses can hire whomever they wish based on desirable skills and characteristics, so long as the selection factors are lawful. Nor is health insurance a right, but it’s darned expensive. Businesses generally need not provide it, and many don’t, thanks to years of double-digit
    cost increases — and a big reason for those is self-destructive behavior by a small percentage of employees.
    The CDC reports that smoking costs $75 billion a year in excess medical bills and $82 billion in lost productivity. In Michigan alone, tobacco kills
    16,000 people annually — more than alcohol, AIDS, car crashes, illegal drugs, murders, and suicides combined.
    Businesses have the right to protect themselves from the horrendous damage smokers inflict upon themselves and others — except in states with “smokers’ rights laws,” mostly passed in the early 1990s with tobacco industry backing. Furthermore, standard company incentives to quit tobacco haven’t worked.
    Weyco’s mission is to help businesses improve employee health and cut costs with innovative benefit plans. Weyco decided to take the lead by phasing in a tobacco-free employee policy over 15 months, with company-paid smoking-cessation assistance.
    It’s not about what people do at home. It’s about the acceptance of personal responsibility by people we choose to employ. Weyco is proud of its position on tobacco and wellness. For every smoker who quits because of it, many others — family members, friends, co-workers –will be thankful the person has chosen a healthier lifestyle. It’s not just about saving money. It’s about saving lives.

  2. I like the lawsuit-free scenario where employers voluntarily realize that everyone needs to be able to work in order not to fall back on public support. In order to avert the all-to-human problem of discrimination, employers voluntarily implement an impressions-blind hiring system. Employees thus hired would be responsible for meeting the requirements of the job, and managers would be responsible for reporting whether those requirements are being met. People problems could then be worked out between the people involved, with the manager only serving as referee in conflicts of interest. Then watch healthcare costs miraculously plummet as quality of life generally improves and prescriptions for anti-anxiety and anti-depression drugs plummet. I have an argument that obesity levels would drop, too, but Matt asked me to research that.
    Anyway, the bottom line is that we could cut out a lot of the corporate cover ups and the windfall-seeking law suits if there was more of a will to fix the social infrastructure in the first place.

  3. Somewhere along the line there will be litigation pitting the rights of corporations vs. individuals, probably using the Americans with Disabilities Act or parallel logic along the following lines: if lifestyle generated characteristics such as obesity or substance dependence are a function of genetic predispositions, are these not disabilities? And if so, is it not discriminatory adverse selection to take such disabilities into account in hiring and firing? One can envision armies of obese smokers of legal and illegal substances being unleashed upon corporate whipping boys such as Wal Mart or Spitzer’s target du jour by the feds, state AGs and the trial bar as mystery shopper slip artists. Upon receipt of rejection letters, the civil and criminal fun and profit will commence.
    The other scenario in a laissez faire similarly plays into the hands of those who advocate publicly financed healthcare. As the private sector contracts, the public expands to the point where a 50% public funding level of healthcare is in sight. At some point we approach single payer by default in the US, although the nuance is that the payer is single only in the sense that the public sector is monolithic, which it isn’t of course. Rather, the various levels of government–federal, state, county, and municipal are sharing the tab. Whether this is good or bad, it may be inevitable. Big business wants out of the health care overhead it carries, and is a willing partner in the socialization of health care.
    What to do? If the healthcare industry wants to remain at least in part a private sector enterprise, perhaps it is time to help the private and public sectors cut costs. That may reduce the pressure.
    The alternative is to profit maximize short term before the party’s over and be ready to segue into more profitable pastures when the end is nigh.

  4. I can’t agree with your predictions of a nasty scenario, and provocative suggestions of “who’s next?” Any attempt to fire the fat and sick over their cost would meet with a backlash sooner or later because there’s no clear link between a voluntary act and being fat and sick. Nature or nurture? The jury is still out.
    Not so smoking. Smoking is a voluntary act (Well, OK. Starting to smoke is. Thanks to “The Insider,” we know about the chemistry of addiction and so forth). And it’s the single most costly voluntary act in terms of driving up healthcare costs.
    Even the comparisons to drinking are a little off base. There’s debate that a little drinking is beneficial (“The French Paradox”). It’s the drinking to excess that clearly adds costs to the system. But society already has consequences for bad choices there (jail, fines).
    It’s a little too paternalistic to suggest that we humans can’t make the distinction between the voluntary act of smoking and its ramifications, viewed against the outward expressions of heredity, and employ the legal system accordingly.
    And I use the term “paternalistic” specifically to make a point. I, too, believe that what you do in the privacy of your own home is your own business (and the government needs to stay out of it), but with one big qualification: as long as it poses no harm to others. If you believe, as I do, in the concept of social insurance to cover low-probability-high-cost events, then you know that smokers impose a cost on all others who pay into, and receive benefit from, the system. That’s a harm brought about by a voluntary act, and there needs to be some consequence for it. I like taxing the bejesus out of it (a government solution) or making smokers pay more for health insurance (a private-enterprise solution).
    To me, it’s the same as life insurance policies that don’t pay out for suicides, or fire insurance that doesn’t pay if you burn your own house down.
    I’ll allow that Mr. Weyers (who fired the smokers) may have gone a bit too far. He game them 15 months to quit. Good. He made opportunities available that promoted healthier lifestyles. Good. He imposed a $50 a month surcharge on those who smoked. Good. Firing them? Well, that may have been a bit over the top. But consider too, that while smoking may have been a private, legal, act of choice by the four fired workers, so too, Mr. Weyers’ private, legal, act of choice was to run a business the way he saw fit. The smokers’ actions posed a cost to Weyers and everyone that worked for him — indeed all those in the pool. Lacking a better system, I see justification in his choice, though I might not have made the same one myself, and you can make the argument that the harm to the many trumped the privacy of the few.
    Rick

  5. Wow – I have so many things to say about this, I don’t know where to start.
    First, employers are already less inclined to hire the fat, sick, etc. in the first place. Legislating against discrimination doesn’t matter because companies can use outside recruiters to hire and only continue to hire recruiters who bring them the candidates who “fit”. Over the last year, I’ve been called by many recruiters who have been enthusiastic about my resume, who have confirmed I have the skills and work habits they need: but then their job order mysteriously changes after they meet me in person. They can see I have health problems, and since they can’t ask about it, they make up all the things it could be in their heads. There’s no one who wishes more than me that people could just test or otherwise qualify for work and get hired because they are the best person for the job: it should be the employer’s responsibility to hire open-minded managers who embrace diversity, rather than managers who will do the dirty work of culling out those who don’t have the right image or *might* have some mysterious health problem.
    The second thing I wanted to say was thank you for bringing up the problem of lawyers only taking cases that will bring them a big financial pay off. This not only discourages lawyers from taking small business cases, it discourages lawyers from taking on big corporations if they are going to throw up too many hurdles: unless the case is a slam dunk or the plaintiff can front the money for the case, it’s just too risky. In this country civil law is not enforced for people without financial resources. I wish our legislators would realize that all ther laws they pass aren’t worth spit to most people because no one will enforce them. And powerful people are able to calculate when they can get away with breaking the law.
    While agree in principle about the freedom to smoke and the principle of separating private life from work life, there is something that I think companies need to address when they have employees who smoke during the day. When employees have roving jobs and discretionary time, it’s easier for them to give into their cravings to smoke. I worked in desktop support for a while, and I was the only non-smoker. The rest of the team spent 80% of their day taking smoking breaks. They’d help someone with a computer problem, then they’d go smoke for 20 minutes. We had a problem-tracking tool where we kept track of service requests: I took a look at the monthly report, and I had handled over 60 problems, and the rest of the team together had handled less than 10! And then, on top of that, I got to carry the night pager which went off around 2am every night because I was “new”. I ended up having to quit the job, which I liked very much, because I was exhausted from doing all the work and getting no sleep. The manager of the department knew that people took smoking breaks, and he also smoked to be one of the cool kids, but I don’t think he realized that no one was doing any work. I don’t think the smokers themselves realized it: they always represented themselves as if they were really busy, and could never take on new projects because there was “too much on their plate”. I think it was the employers responsibility in this case to keep track of how much work was getting done, and how much smoking was taking place on what should have been company time.

  6. Wouldn’t such class action suits now be heard (or not heard) in federal (vs. state) courts?

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