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Health Costs

Restaurant industry nervously eyes ACA’s changes in insurance rules

Athens Pizza won't be subject to the employer mandate because the Decatur restaurant has fewer than 50 workers

Athens Pizza won’t be subject to the employer mandate because the Decatur restaurant has fewer than 50 workers

Atlanta restaurateur Steve Simon has run the numbers on health care reform. He needed the information to weigh his options.

Simon is co-founder of Fifth Group Restaurants, which operates seven restaurants and other businesses in the Atlanta area, employing more than 500 people. Currently, Fifth Group offers health insurance to its managers only.

But under the 2010 Affordable Care Act, when it is fully implemented next January, a business with 50 or more full-time workers must offer all employees working at least 30 hours a week a health plan that’s considered “affordable.’’ If it doesn’t, the business must pay a penalty.

This “employer mandate” represents a great unknown for Fifth Group, Simon says. The impact on the business could range from $50,000 to $400,000, he says.

Indeed, much of  the restaurant industry, with its many low-wage workers and its generally low rates of offering insurance, may face a financial jolt from the law.

Simon’s effort to determine potential costs is part of the frenzy of activity for business owners with 50 workers or more in calculating the impact of the insurance mandate.

Restaurants employ roughly 10 percent of the workforce both in Georgia and nationwide. While many dining establishments have fewer than 50 employees and therefore won’t be subject to the mandate, others will be affected. “There’s deep concern out there,’’ says Karen Bremer, executive director of the Georgia Restaurant Association.

“The restaurant industry understands that their most important asset is their employees,” Bremer says, but she adds that health insurance costs have spiraled out of control.

The cost of health insurance has been the No. 1 issue facing small businesses, according to surveys by the National Federation of Independent Business. “Our margins are so thin, there’s only X amount of dollars,’’ Bremer says. “If . . . [employee coverage] was affordable, you’d have everybody insured.’’

Then there’s the complexity of the new health law, which Bremer says has prompted many meetings within the industry.

“I don’t think anyone has all the answers,’’ Simon says.

Restaurants and retailers face “a delicate calculation,’’ says Bill Custer, a health insurance expert at Georgia State University. “We’re dealing with a lot of ‘what ifs.’ ’’

“There’s a lot of consultant activity as employers try to work through the numbers,’’ Custer says.


Some workers may say ‘no’

Despite all the concern in the industry, some restaurant operators say the law’s impact may not be as great as originally feared.

They cite the fact that to count as affordable coverage under the law –– thus escaping the penalty –– a business can charge workers up to 9.5 percent of their annual wages to pay for insurance. So if a worker is making $30,000 a year, the business can set his or her share of the premium at $2,850 annually, or $237.50 per month.

The restaurant owners say many workers will avoid such premiums by going without coverage, choosing instead to pay the ACA’s penalty of $95 for uninsured individuals.

Other options for these low-wage employees include joining a spouse’s plan, staying on a parent’s plan till age 26, or enrolling in Medicaid in the states that opt to expand that program.

Riccardo Ullio, who owns three restaurants in Atlanta, says that once a company offers affordable insurance, “that places the burden on the consumer himself.’’ He predicts relatively few restaurant workers will join the company plan.

Simon says that “unless no one signs up’’ for Fifth Group’s newly available coverage, the change in the law will affect the company’s bottom line. That may lead to higher prices on his restaurants’ menus, he adds.

Fast-food chains, with their large workforces, have a lot riding on the ACA’s changes. Wendy’s has stepped back from gloomy predictions about the health law, saying it will cost about $5,000 per year per restaurant, not the $30,000 the company initially foresaw. But McDonald’s estimates that each restaurant will incur between $10,000 and $30,000 in added annual costs.


The problem of part-timers

Under the health care law, the hours of a company’s part-time employees make a big difference. Affordable coverage must be offered to employees who work an average of 30 hours or more a week. That has prompted talk of reducing current workers’ hours to below 30.

The part-timer issue led to controversy last year when Darden Restaurants began experimenting by hiring more part-time workers at its Olive Garden, Red Lobster and Longhorn Steakhouse chains to see if it could cut its health costs under the new law. That created a public backlash that Darden officials say has cut into its profitability figures.

The company recently announced it would not reduce its current full-time employees’ schedules to part time, and that its new restaurants will hire some full-time hourly workers.

Some businesses will take advantage of the 30-hour loophole by limiting newly hired part-timers to 29 hours or below and allowing only the very best workers to be full time, says benefits attorney Warren Kingsley of Arnall Golden Gregory.
In his more than 30 years as a benefits lawyer, Kingsley says, “this is the most complex law I’ve ever dealt with.’’

For a business above the 50-employee threshold, the penalty for not providing workers with any coverage is $2,000 per year for each full-time employee it has, minus the first 30 employees.

But the penalties may be less punitive for employers who offer stripped-down benefits that are still considered “minimum essential coverage.”

Some restaurant companies are considering such coverage, which would offer preventive care but not such important features as surgery and hospitalization. The Wall Street Journal recently reported that a restaurant company in Texas is planning to offer the bare-bones plan.

Under this scenario, the company incurs a $3,000 penalty for each employee who rejects the limited plan and goes to the ACA’s new insurance exchange for coverage. That per-worker penalty would wind up potentially much less than the penalty for not offering coverage at all, which is assessed across the workforce.


Supporters defend law

Supporters of the Affordable Care Act, meanwhile, point out that the employer mandate affects just a small segment of businesses, noting that small firms are exempt, and that most larger companies already provide insurance.

“In Massachusetts, their employer mandate was set at 10 employees, and Massachusetts saw an increase in employer coverage,’’ says Rhett Buttle of the Small Business Majority.

Kathleen Stoll of Families USA, a consumer group that’s a staunch backer of the health law, says that those who have insurance ultimately pay – in higher insurance and medical costs — for employers that don’t cover their workers.

Companies that don’t offer insurance to their workers “freeload on the rest of us,’’ Stoll says. “I would be willing to pay a couple cents more if the person serving me or cooking the food has coverage.’’

Sandy Papadopoulos, who operates Athens Pizza in Decatur and has fewer than 15 employees, won’t face the mandate. But if he did, he says, “prices in the restaurant would have to increase dramatically, without question, across the board.’’

Papadopoulos calls the law the “unaffordable health care act.”

“You don’t need to regulate employees, you need to regulate insurance companies so then people can afford it,” he says.

Jessica Blackburn, an uninsured waitress working at a small restaurant, figures “there is no chance’’ the restaurant will offer her coverage in January. “I think it would be helpful . . . [if it were available], yes.”

Restaurateur Ullio says he’s not overly concerned about the Affordable Care Act, though he adds, “I may completely change my mind next year.’’

Simon says he sees positives in the law. People who “really need insurance will have the ability to get it,’’ he says.

But he adds that the ACA also brings a high level of uncertainty for businesses. “If you do the math,’’ he says, “there are so many moving targets.’’


GHN intern Sofia Kouninis, an Emory University student, contributed to this article.


Small businesses embrace alternative to health insurance (video)

Betting on Reno(Editor’s Note: This is the fifth in a series of articles on the Athens uninsured initiative, produced by graduate students in the Health and Medical Journalism Program at the University of Georgia. Visit the previous articles by clicking on the red button to the left.)

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For many small businesses in Reno, Nev., the Access to Healthcare Network (AHN) has been a godsend.

“As an employer in this day and age, I have found it’s not so much the hourly wage that you offer people anymore,” says Colleen Petrini, director of Noah’s Ark Child Care Center. “It’s the benefits.” But benefits cost money.

Her center used to offer health insurance to all employees. But when the economy went sour in 2008, Petrini says, she could no longer afford the monthly payment she had been making for each employee’s coverage. And it was harder for the workers to kick in the monthly paycheck deduction for individual insurance.

Fortunately she heard about AHN, an alternative to health insurance. It’s a nonprofit medical discount plan based in Reno, and it began in 2007 with the mission of increasing access to primary and specialty health care for underinsured and uninsured residents of Nevada. It works on a “shared responsibility” model, in which partnerships between hospitals, doctors, businesses and individuals ensure that Nevadans can get and help pay for low-cost health care.

After learning more about what AHN had to offer, Petrini dropped her insurance plan and signed up. The center and its teachers split the monthly fee.

Here in Georgia, the Athens Health Network plans to bring a similar discount plan to the Clarke County area next year.

Small businesses have typically listed the cost of health insurance as their No. 1 concern in surveys by the National Federation of Independent Business.

That cost has made coverage unaffordable for many small firms. A 2008 study found that employees of small firms were twice as likely as employees of large firms to be uninsured. Small business employees had a 25.1 percent unemployment rate nationally, whereas the rate of uninsured large business employees is 13.6 percent.

Offering insurance is important to recruiting and retaining good employees. “Many people would not sign onto a job if they knew there would not be health insurance benefits,” said Josh Cole, who helps network members in Nevada’s Washoe County, where Reno is located, obtain the care they need. “So that [lack of health coverage] automatically takes away a big talent pool from these small businesses that are otherwise doing a great job.”

Petrini’s day care is not the only Reno business that has suffered in recent years. The city’s gambling industry, which has been its economic mainstay for generations, has been hit hard by increasing competition.

With American Indian casinos on the rise across the nation, and many more states legalizing gambling within their borders, such traditional gaming-and-entertainment destinations as Las Vegas, Reno and Atlantic City, N.J., have taken a hit.

Reno has suffered particularly, because it’s near the California line, and most of its business historically came from Californians who crossed over to gamble. Now those people often stay in the Golden State and play at Indian casinos rather than making the trip to Nevada. Reno’s gambling revenues have fallen by a third since reaching a peak in 2000.

The city also took a beating from the housing market crash that precipitated the Great Recession. Between 2007 and 2010, the median home value in Reno declined 37.4 percent, the 13th-biggest drop in metro areas of the country.

During this time, the Access to Healthcare Network was growing to meet the needs of a state that was economically flailing. The discount plan expanded in 2009 to serve residents of rural Nevada through funding from the federal stimulus package. It expanded to Clark County, where Las Vegas is located, in the summer of 2010.

Members of the network pay a monthly fee that gives them access to a large number of specialists, clinics and hospitals. The members pay cash – at deep discounts – for the care they receive.

Since its inception in 2007, AHN has served more than 11,000 Nevada residents.


A big question mark

AHN has had a remarkable rise so far. But now that full implementation of the Affordable Care Act, or Obamacare, is moving ahead, the future of the Nevada network is unclear.

Under the law, small businesses with more than 50 full-time equivalent (FTE) employees will be fined if they fail to provide affordable health coverage for their employees. If employers with 51 or more FTE employees fail to provide this coverage, they will face an annual fine of $2,000 per employee (excluding the first 30).

The even smaller businesses, those with fewer than 50 FTE employees, will not suffer penalties for failing to provide health benefits. Some businesses with less than 25 FTE employees will qualify for tax subsidies to make coverage more affordable.

Some companies, once they are required to have insurance or be fined, will drop AHN and use the money they would pay into it to buy the coverage instead.

“The ACA [Affordable Care Act] will result in some of our clients going away,” said Cole, the AHN staffer.

But the Affordable Care Act will not be the solution for everyone. The insurance options available on the exchanges coming in January may be more expensive than the $40 per month AHN membership fee added to the fine for not providing coverage.

Also, people in the area without documentation of legal U.S. residency will keep turning to the Access to Healthcare Network, because they can enroll without providing a Social Security number.

Melissa Nixon, human resources director of Great Basin Community Food Coop in Reno, said her business will stay with AHN even after the Affordable Care Act is fully implemented in 2014.

Because Great Basin has fewer than 20 full-time equivalent employees, the nonprofit is not required to offer health insurance to workers.

Even if the government subsidies would help the food co-op provide standard health insurance, Nixon predicts that her organization will stick with the locally grown Access to Healthcare Network instead of switching to conventional insurance.

Through AHN, she and the other employees of the co-op can depend on getting preventive and emergency care from a network of people who are invested in the well-being of community members.

“They have really great customer service,” said Nixon. “The care coordinators have relationships with our employees and are able to best match their medical program with their needs.”

Jodi Murphy is a graduate student at the University of Georgia Grady College of Journalism and Mass Communication, pursuing a concentration in Health and Medical Journalism.  She is particularly interested in environmental and global health, as well as women’s issues.


Misuse of emergency rooms: A costly but avoidable error

Misuse of emergency rooms: A costly but avoidable error

Choosing an urgent care facility over an ER can save both money and time

A sudden ache or illness is troubling at the best of times. And if you can’t get in to see your primary care provider — or don’t have one — the situation can be worse still.

At such times, many people turn to the emergency department (ED) at the nearest hospital. Often known as the emergency room or ER, it can be the first place that comes to mind in an unexpected medical situation.

But unless a patient’s condition appears life-threatening — with symptoms such as severe chest pain, inability to breathe, or signs of stroke, for example — the hospital emergency department is often not the best choice.

People who go to hospital emergency departments when there’s no real emergency are inconveniencing themselves and hurting the system. Misuse of EDs accounts for $4.4 billion in waste annually and contributes to the high cost of American health care.

Patients with insurance are often unaware of the actual costs of the medical care they receive at an ED, because they pay little or nothing out of pocket. But that is changing. Nowadays more hospitals are charging upfront fees for non-urgent ED visits, and more individuals are buying insurance plans with high deductibles. Health consumers may be forced to start paying more attention.

If a person has an illness or an injury that warrants immediate attention but isn’t likely to be life-threatening, an urgent care center may be the best bet. These clinics, which take walk-in patients and are open fairly long hours (though generally not around the clock), are usually cheaper than EDs. Perhaps more importantly, they are often quicker, too.


The wait can be painful

One of the biggest misconceptions among patients who come to the ED is that they will be seen on a first-come, first-served basis, said Kathleen Kriebel, a registered nurse in the emergency department at Athens Regional.

But the very nature of emergency care makes such routine customer service impossible. When patients arrive at Athens Regional Medical Center for emergency care, a triage nurse uses the emergency severity index, or ESI, to decide which of them will get priority. The majority of U.S. hospitals use it.

Based on the ESI, the nurse determines the severity of each patient’s condition, what kind of care the person needs, and how long the person can wait for it.

For instance, a patient experiencing severe chest pain or other heart attack symptoms will be seen immediately. A patient with a sore throat, who may have arrived earlier, will have to wait for an indefinite period, possibly a long time, depending on the hospital and the circumstances.
Patients have other misconceptions about hospital emergency departments, Kriebel said. Some believe that being transported to the ED by ambulance will automatically get them admitted to the hospital and assigned a bed. That is not true.

She said some patients actually believe they can get the same kind of routine care through the ED that they would from a primary care physician. That is definitely incorrect.

Urgent care centers are increasingly numerous and conveniently located. Reddy Medical Group in Athens operates one in the same building as its primary care facility, though the two function separately.

In many cities and towns, retail stores contain small clinics that handle urgent care patients. Two examples are the Little Clinic in Walmart and CVS’s MinuteClinic, where nurse practitioners or physician assistants treat minor aches and illnesses from earaches and strep throat to poison ivy and bladder infections. Prices vary by service, but insurance may be accepted at certain locations, and the clinics are open longer than a typical doctor’s office.

Sunita Singh, vice president of business development at Reddy, said although urgent care is not meant to replace primary care, it is a beneficial option for patients.

“It’s a good alternative, where you can get stabilized until you’re able to see your doctor,” Singh said, adding that urgent care is more or less like a doctor’s appointment.

At Reddy Urgent Care, walk-in patients are not triaged. They are seen in the order in which they arrive, unless there is an extreme case in which the patient may be at risk. Singh said a patient generally spends about an hour in the urgent care facility, and that time includes treatment and discharge.


Urgent care is more economical

Choosing an urgent care facility over a hospital emergency department can be just as much a money-saver as a time-saver.

Take, for example, an uninsured person who has a headache, a fever, and a sore throat with pus around the tonsil area. At Reddy Urgent Care, the bill would come to about $140 for a first-time visitor, which includes a strep test and a 25 percent discount because the patient is uninsured. That’s all the patient would have to pay, aside from getting a prescription filled if necessary.

In the emergency department at Athens Regional, the same patient would be charged about $413 and would not receive a strep test. This includes the pain medicine that would be given at the time of the visit, the ED visit itself, and a 40 percent discount because the patient is uninsured. However, the bill does not include charges from the independently contracted doctor who examines the patient, or any prescriptions the patient may need.

Singh said many individuals are not educated about the respective uses of urgent care centers and EDs. Occasionally — in a reversal of what usually occurs — patients come to Reddy Urgent Care when they should have gone to the ED.

When that happens, and the patient needs hospital-level care, the staff at Reddy will send records, such as X-rays, to the hospital and call ahead to help cut the patient’s waiting time, Singh said.

“It is our job to take care of the patient,” she said, “If we can’t do it, someone has to.”


April Bailey is in her first year of a master’s degree in telecommunications at Grady College of Journalism and Mass Communications.


Georgia’s tobacco tax: Unusually low and tough to change

After smoking on and off for more than 12 years, Atlanta native Katie Moore may have finally kicked the habit for good.

How did she do it? By moving 880 miles away, to New York, where the state tobacco tax is the highest in the country — $4.35 a pack, nearly $3 more than the national average of $1.46. In New York City, where Moore now lives, smokers pay an additional $3.10 tax on top of the state tax. In some parts of New York, a single pack of cigarettes can cost as much as $14.50.

Because of high cigarette prices, Moore said, smoking ceased to be an option when she moved to the Big Apple for her job. In fact, the 30-year-old associate financial representative admitted that the high price of cigarettes was the only reason she ditched her three-pack-a-week habit.

“If I still lived in Atlanta, I probably would have never stopped,” she said. “Cigarettes were so cheap, so the incentive to quit just wasn’t there.”

Testimony from people like Moore proves why Georgia should raise its tobacco taxes, said Sarah Balog, government relations director for the American Heart Association in Atlanta.

“Every price increase has a documented and proven effect to reduce youth and overall smoking rates,” Balog said.

According to data from the Campaign for Tobacco Free Kids, every 10 percent increase in the cost of tobacco means a drop in youth smoking rates of about 7 percent and a decrease in adult smoking rates of 4 percent. Those numbers may seem small, but in Georgia, where the tobacco tax is the 48th-lowest in the nation, and more than a dollar less than the national average, a small decrease in the number of smokers could translate into a significant decrease in state health care spending.

But efforts to raise the tobacco tax have gone nowhere during recent sessions of the Georgia General Assembly, including this year, when health advocates backed an additional tax of $1 per pack of cigarettes.

The year before, the same dollar-a-pack increase died in the Legislature after opposition by the Georgia Association of Convenience Stores. Georgia’s current tax is 37 cents per pack.

Advocates of a tobacco tax increase point to the dangers of youth smoking as a major reason to make a change. The Bump It Up a Buck coalition says that in Georgia, 95,900 high school students smoke and 22 million packs of cigarettes are bought or smoked by kids each year.

But the issue goes beyond young people. “Currently, . . . [Georgians pay] out of pocket a half a billion dollars a year for smoking-related illnesses [covered by Medicaid],” said Rep. Ron Stephens (R-Savannah), who was lead sponsor of a bill to increase tobacco taxes in 2009 and 2010. Keeping tobacco prices low forces hardworking Georgians to subsidize Medicaid costs for smoking-related illnesses, he said.

If Georgia’s tobacco tax went up by one dollar a pack, as Stephens proposed two years in a row, the state would take in $350 million more to defray these health care expenses. Though that still would fall short of the half-billion that Stephens said is needed, the current tax brings in far less — $150 million each year.

The last time the state tobacco tax was increased was in 2003, when Sonny Perdue had just taken office as governor. He signed a bill to raise the tax from 12 cents to 37 cents a pack. The change was not very big by national standards, but the state brought in an additional $100 million the following year.

In the period since then — with Perdue serving eight years in the governor’s office and Nathan Deal succeeding him in 2011 — there has been no further increase in the state tobacco tax. Efforts to get another increase through the Legislature haven’t come close to success.

A clash of political wills

Advocates of an increase point to evidence of strong public support for the idea. In a poll conducted in 2010 by Glen Bolger, a Republican strategist and co-founder of Public Opinion Strategies, 72 percent of self-identified Republicans and 76 percent of self-identified Democrats in Georgia favored a tobacco tax increase.

But the anti-tax movement is a political force to be reckoned with in Georgia, and the campaign for a tobacco tax increase has run up against it.

Stephens said many conservative legislators in Georgia shy away from his proposal for fear they will be labeled “tax increasers” and lose their seats. In an especially trying economic climate, legislators see supporting any tax increase as risky, even if the majority of citizens support it, he said.

Stephens also said that a prominent anti-tax political think tank, Americans for Tax Reform, has kept some Georgia representatives from sponsoring the tobacco tax by promoting a “no new tax” pledge. Once legislators sign the pledge, they must stick to their word and oppose all new tax proposals or jeopardize their reputations as being truly “anti-tax,” said Stephens.

But Joshua Culling, Georgia’s state affairs manager for Americans for Tax Reform, said Stephens’ perspective is the one that is shortsighted. Raising the tobacco tax is not the solution to Georgia’s problems, Culling said. A total reform of the current health care system is what is really needed, he said, and until that happens, a tax increase will only hurt the economy.

“Raising taxes to cover health care costs suggests that the system is OK and that there’s just not enough money currently to sustain it,” he said. “But it’s a broken system that needs to be addressed, and until our legislators understand that point, we’ll never fix the problem.”

Culling said raising the tobacco tax would put on an unfair burden on a small segment of the population to solve a statewide problem, which is why so many legislators oppose the idea.

In 2012, roughly 23 percent of Georgia’s state senators and 20 percent of its state House members, the majority of whom are Republicans, have taken the anti-tax pledge — including key leaders such as House Speaker David Ralston. Governor Deal, a Republican, has also taken the pledge.

Not all Republicans in Georgia oppose a tobacco tax increase. Three of the five co-sponsors on tobacco tax legislation are conservative Republicans. These sponsors understood the long-term financial benefits to Georgia taxpayers of increasing tobacco prices, said Rep. Mary Margaret Oliver of Decatur, one of the two Democratic co-sponsors of the bill.

“Bottom line, we should not be encouraging people to smoke tobacco, because our taxpayers have to spend more money on smoking-related illnesses,” she said.

Oliver applauds Stephens, the most high-profile GOP advocate of the tobacco tax, for taking “a real economic view” on taxpayer dollars, even if it’s an unpopular stance among some Georgia legislators.

“State representatives cannot avoid issues of preventive health care,” she said, “and [Rep. Stephens] as a pharmacist and someone who works in the health care profession, understands the potential financial and health benefits of raising tobacco prices, even if that means supporting a tax.”

Gov. Deal has said that raising the tobacco tax would harm convenience stores near the border with other states.

Unable to make any headway with the governor and legislative leaders, Stephens has temporarily shelved his campaign to increase the tobacco tax.

“There is no need to waste my energy and the energy of other representatives if leadership support isn’t there,” said Stephens. “It’s going to take a shift in mindset, and an understanding that we are subsidizing Medicaid on behalf of the working public. Until that point is made, no one will touch it.”


What about retailers?

Some blame the prevailing attitudes in the Legislature on Big Tobacco.

The millions of dollars given each year to the Republican National Committee by tobacco companies keep Georgia Republicans from cutting ties and implementing a harsher tax, said Eric Bailey, Georgia grassroots advocacy manager for the American Cancer Society.

But for tobacco-tax opponent Jim Tudor, president of the Georgia Association of Convenience Stores, it’s not a matter of loyalty to tobacco companies. It’s all about loyalty to small retailers.

“Legislators are well-meaning people, but they are not retailers and they don’t have to compete with other stores,” Tudor said.

Raising the tobacco tax by a dollar may drive Georgians living in border counties to cross state lines to stores where cigarettes would then be about 20 cents cheaper, he said.

“It’s a pennies business, and we can’t afford to lose any business for reasons of tax policy,” Tudor said. “This may not affect states without a large border population, but that’s certainly the case in Georgia, and it will hurt small businesses.”

Culling agrees with Tudor, calling the tobacco tax an “unstable” method to raise revenue because of cross-border sales.

Convenience stores rely on tobacco sales for a third of their yearly profit, so a tax increase that helps competitors will certainly hurt Georgia’s small business owners and the economy, he said.

Culling also cited an ATR-funded study that found Georgia’s cigarette sales increased by nearly 1.3 million packs six months after South Carolina raised its excise
tax rate in July 2010.

But Balog said Culling’s and Tudor’s argument doesn’t hold up.

“This fear of cross-border sales is the biggest boogeyman in the argument against raising the tobacco tax,” she said. “The idea that someone is going to drive across the border to save pennies on cigarettes when the gasoline prices are so high just doesn’t make sense.”

Evidence from four neighboring states – South Carolina, Tennessee, Alabama and Florida – shows that sales in counties that border Georgia have not taken a hit even though their tobacco prices currently exceed those in Georgia, Bailey said. A report from the economic consulting firm Orzechowski and Walker illustrates that Georgia’s tobacco tax revenue actually declined 5 percent after Florida raised its tax by $1 in 2009 to match the national average, he said. At the same time, Florida saw a 193% increase in revenue, collecting $1.2 billion in 2010 versus $429 million in 2009.

Advocates for the tax in Georgia are not giving up despite recent setbacks.

Raising the tobacco tax, and hopefully encouraging some people to stop smoking, will not only benefit the state financially but also help its image, Balog said.

“Georgia is known for so many things – great golf, sports, music, food, beaches,” said Balog. “Do we really want to make cheap cigarettes and high incidence of smoking-related illnesses one of them? I don’t think so.”



This article is the latest in a series developed by the Public Health News Bureau, a project funded by Healthcare Georgia Foundation. The bureau is staffed by graduate students from the Health and Medical Journalism Graduate Program of the University of Georgia’s Grady College of Journalism and Mass Communication.

Robyn Abree earned her undergraduate degree in journalism and master’s in health and medical journalism at UGA’s Grady College.

Premature birth: State, hospitals aim to reduce rates

A baby carried to full term -- 39 weeks -- is more likely to be born healthy.  Photo courtesy of Northside Hospital

A baby carried to full term — 39 weeks — is more likely to be born healthy. Photo courtesy of Northside Hospital

Southeastern states got poor grades last year in a report card on their rates of premature births, with Mississippi, Alabama and Louisiana earning F’s.

Georgia scored a D, coming in 45th among states in the “preterm” birth report card, based on 2009 data presented by the March of Dimes.

According to the most recent data, though, the state’s percentage of babies born too soon has been reduced from close to 14 percent to 12 percent.

Recently public health officials in Georgia and 47 other states have agreed to accept a national challenge to reduce their preterm rates by 8 percent.

“If each state meets the 8 percent challenge, it would give 40,000 more babies a healthy start in life,” said Dr. Jennifer Howse, national president of the March of Dimes Foundation. “Meeting this goal would lower the nation’s preterm birth to about 11 percent, and save about $2 billion in health care and socioeconomic costs.”

The challenge – issued by the Association of State and Territorial Health Officials’ president, David Lakey, and backed by the March of Dimes, a leading nonprofit organization for pregnancy and baby health – would lower Georgia’s preterm birth rate to 11.2 percent.

Premature births are a major health problem, and a costly one. These births are the leading cause of newborn death. Babies who survive an early birth often face the risk of lifetime health challenges, such as breathing problems, cerebral palsy and mental retardation.

“They may be at higher risk for chronic medical conditions and delays in academic achievement,’’ said Dr. Seema Csukas,  director of the Maternal and Child Health Section of the Georgia Department of Public Health. “Preventing an early birth gives that child the best opportunity for a healthy and happy life.’’

A 2005 Institute of Medicine report found that preterm births and associated complications had cost the United States at least $26.2 billion that year.

The causes of preterm births are not fully understood. But the risk factors include a lack of prenatal care, as well as alcohol consumption, drug use and smoking by pregnant women.

Another factor is the high number of early Caesarean-section births that are not medically necessary.

Many women schedule C-sections before their pregnancies are at full term (the 39-week mark) and as a result, many have preterm births (those before 37 weeks of gestation), says the March of Dimes.


Some hospitals draw the line


The March of Dimes is working with hospitals to reduce the incidence of early elective deliveries (EEDs), which are medically unnecessary inductions and C-sections scheduled before 39 weeks of pregnancy.

The Georgia Hospital Association (GHA) and its member hospitals, as well as the Georgia Department of Public Health, are also partnering in this effort.

Overall, Georgia hospitals reduced the occurrence of EEDs from 8.83 percent in March 2012 to 3.58 percent in August 2012, representing a 57 percent decrease, GHA said. Thirty-two percent of the hospitals that submitted data achieved a complete elimination of EEDs. This reduction represents a cost savings of $2 million, assuming that at least a quarter of those babies would have gone to the neonatal intensive care unit after delivery.

Northside Hospital in Atlanta, which for years has had the most births in the state, implemented a “hard stop” on C-sections without medical indication in early 2011 and a “hard stop” on inductions without medical indication in early 2012. In other words, the hospital won’t do these procedures unless there’s a valid medical reason.

The average rate of elective delivery prior to 39 weeks reported by the Joint Commission is 15 percent, according to Northside. The Atlanta hospital’s most recent rate of early elective delivery without a medical indication was 7.3 percent, said Russ Davis, a Northside spokesman.

The hospital has joined in the GHA initiative to reduce early elective deliveries in Georgia. Northside Atlanta reports that its preterm birth rate declined from 12.8 percent  in 2010 to 11.2 percent through June 2012. This compares to a national average of 11.99 percent, Northside said.

“We don’t know everything about premature birth, but we know there are steps that can make a difference, such as improving access to health care, helping women quit smoking and ending early elective deliveries,’’  said Sheila Ryan, Georgia state director for the March of Dimes.

State health officials are conducting an educational campaign with the March of Dimes to let pregnant women and their medical providers know that “Healthy Babies Are Worth the Wait.”  Women will be advised that if their pregnancy is healthy, it’s best to wait for labor to begin on its own rather than scheduling an induction or C-section.

In addition, the Georgia Department of Public Health and the March of Dimes have targeted high-risk areas across the state – Atlanta, Columbus and Savannah – and have scheduled stakeholder meetings with health officials in those communities.  The goal is to identify specific populations with the highest incidence of preterm birth and infant mortality and determine how these problems can be addressed.

Dr. Paul Browne, head of maternal-fetal medicine at Georgia Health Sciences University, said the South’s higher rate of preterm births comes from the region’s higher percentages of poor people, minority patients, and mothers with hypertension problems.

Browne noted that the state’s preterm rate has been declining, a sign of progress. He said cutting funding for Public Health, part of the 3 percent statewide budget reductions ordered by Gov. Nathan Deal,  is not what is needed now.

“We’re at the point where if we reduce more, we’ll increase bad outcomes,’’ Browne said.

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