The Safeway Plan in VT and TN: a Prognosis

BY Martin Harris

Martin Harris

You’d think that so simple a concept as rewarding good behavior and punishing bad (see the Book of Matthew on this subject) would be built into government policy, and, in some selected areas it is. Examples: if you buy government bonds, your interest returns (VT has posted a different story on this subject, a remarkable piece of recent history I have no space for here) are Federal and State Tax exempt; and if you buy cigarettes, the State Tax is supposed to be sufficiently punitive as to deter you from “the filthy habit”, or, at least, to pay for some of the medical costs you are statistically likely (a well-proven aspect of public health epidemiology) to incur. But the Matthew Principle has no admirers in government health care program design circles, which explains why there’s no public-sector equivalent of the Safeway Plan, a corporate in-house employee health insurance system which charges lower premiums to employees who practice measurably better-for-health behaviors like weight control, smoking abstention, and blood pressure management, than to those who don’t. Why neither Federal nor State governments will go anywhere near the Safeway Plan would take even more column-inches of humble-scribe theorization than why former Tax Commissioner Joyce Errecart thought she could make some bucks by taxing Federal-obligation interest. No doubt it was an ideology thing.

If these governmental policies were (subjunctive contrary to fact) to be reversed, and State health plans like TennCare in TN and ShumlinCare in VT were to include a Safeway component, the underlying statistical facts indicate to this amateur epidemiologist that it would work better at the north end of the Appalachians than at the south end. That’s because, as Safeway CEO Steven Burd correctly said, the majority of health-care costs derives from individual health behaviors, and as the Federal stats empirically show, the more health-averse behaviors are more prevalent in the lower-income and minority populations, of which TN has more than VT. And Safeway has none, if you use the basic fact of (un)employment as a behavior which pretty much distinguishes the “underclass” from the middle and upper ones. Last month’s Bureau of Labor Statistics showed VT at #5 nationally with a 5.6% unemployment rate, TN at #38 nationally with 9.6%. To the extent urban populations almost always show a larger underclass percentage than exurban or rural one, I’d note that VT, 620,000 population, has no city to compare with Memphis, 650,000 population, in Shelby County. Here’s the header from an article in “The Commercial Appeal”: “Shelby Gets Unhealthy Rating, Report Ranks County 57th in Tennessee”. The lead graf says that adjacent and rural “…DeSoto County, lacking the high poverty and crime rates of its northern neighbor, is the healthiest place in Mississippi”. Before you assume that I’m making a concealed urban/racial argument here, let me quickly note that Tennessee’s Grundy County, in the rural southeastern hill country, is the State’s unhealthiest. And here are the comparable income and poverty stats: for median household, TN at $43,610, VT at $52,111; for poverty percentage, TN at 15.5%, VT at 10.4%.

A scribe who dasn’t speculate on the Errecart tax policy dasn’t speculate on the poverty-health correlation-causation nexus either. It doesn’t matter, actually, why the correlation exists, because the stats prove the poverty-obesity correlation (you can Google the Jan 07 Southern Medical Journal for the industry’s epidemiological conclusion) and the stats also show the obesity-diabetes causation pattern. Thus, if you can bribe (oops, make that verb incentivize) your citizenry for, say, successful personal weight control (a little Safeway Plan strategy, there) you can save government a lot of money on health-care costs. And you’d think that VT would be better situated, socio-economically, to do so than TN; after all, using poverty as a marker, VT has a 50% advantage before the incentivization even starts. And, assuming there’s a graphical curve showing higher teachability correlating with Socio-Economic Status, the VT population ought to respond better to the Safeway Plan inducements than the TN population. But the stats don’t shed light on the most interesting correlation-causation (or not) of all: Yes, VT shows a better set of actual health results than TN, but does it trace back to the higher SES level of the citizenry or the higher level of per-capita health spending? Here are the 2004 numbers, sourced from Kaiser State Health Facts: US average, $5,283; VT, $6,069; TN, $5,464. (The current US number is $7, 538.) VT was spending 15% above the national average, in the year GM built its last Oldsmobile; did that “investment”, or did the underlying SES stats, cause the resulting better health results? N.B.: Colorado, one of the healthiest States, spent only $4,717, and D.C., the sickest jurisdiction (both meanings) spent the most: $8,295. VT also spent (2007) 46% above the national average on welfare –$1,938 per capita compared to US $1,305-did that “investment” cause the resulting high (2009) Welfare Recipients as Percent of Population -2.06 compared to US 1.30? And how does a higher SES State (VT) come out with almost the same welfare percentage as far lower SES State (TN) which showed a 2.30% rate that year? Dast I suggest that some differential in gate-keeping is involved? You’ll find these and similar stats in the annual 50-State Comparisons published by The Taxpayers’ Network.

Humble-scribe conclusion: both TennCare and ShumlinCare, now undergoing revised or initial design decisions, need to embrace at least part of the Safeway Plan to, as government likes to say, “make a difference”. Neither will, for now. Eventually, both will have no other choice.

Nor do the Main-Stream Media embrace the Safeway Plan; the critiques from MSM print icon Washington Post, for example, illustrate some remarkable aspects of the Liberal disdain. Next week.