Wellness Programs are Winners—for Everyone!
A half century ago, Merle Travis wrote a song that Sollie “Tex” Williams recorded; it became Capitol Record’s first million-seller. The song? “Smoke! Smoke! Smoke! (That Cigarette).”
Although that song is no longer heard on the airwaves, the sentiment with smokers remains, and the fallout from smoking and other unhealthy lifestyle choices is costing us hundreds of billions of dollars. In fact, the choices a number of us are making are killing us—literally!
Some of the most difficult health care problems and diseases are linked to chronic, preventable medical conditions and lifestyle choices associated with nutrition and exercise, excess weight, alcohol consumption, and smoking. Indeed, cigarette smoking is the leading cause of preventable disease and death in the US. On average, smoking reduces adult life expectancy by approximately 14 years.
Poor health not only affects the quality of life for those who smoke, but it also costs individuals, families, companies, and government entities hundreds of billions of dollars. As the population continues to expand and age, these effects will become even more pronounced unless concerted efforts are made to change underlying behaviors.
According to the Centers for Disease Control and Prevention (CDC), the cost of managing chronic diseases appears to be a major contributing factor to the growing price tag of health care, which is rising at the fastest rate in US history—some three times the rate of inflation. The CDC estimates that 32% of Americans suffer from chronic disease, but their medical costs account for more than three-quarters of the nation’s $1.8 trillion annual health care expenditures.
While residents of the Lone Star State have seen their median earnings climb by almost 11% over the 2000-2006 timeframe, at the same time, the average family’s health care premiums shot up some 80%. Companies are finding it ever more difficult to provide health care coverage, and the percentage of Texans without insurance is larger than in any other state. Illness is, thus, also a devastating financial blow for many families, and the resulting losses in productivity are even greater to the economy than the out-of-pocket outlays for medical expenses.
So, is anyone doing anything about this matter? Certainly. Many businesses and other institutions have established wellness and prevention programs that include exercise (the CDC indicates that less than half of us meet the recommended levels of physical activity), weight loss, stress reduction, health assessments/management, nutrition enhancements, and smoking cessation. There is strong evidence that these kinds of endeavors can be instrumental in reducing the cost of health care and increasing productivity.
Since the US Surgeon General’s 1964 report on smoking which first brought to light the dangers of the habit, there has been a significant decline in smoking, but today almost one out of every five Americans still light up several times a day—slightly more men than women.
The CDC considers smoking cessation programs the most cost-effective health care benefit as they cost about $1.20 to $4.80 per person per year compared to $1,623 per smoker per year in excess medical expenditures.
The Texas House and Senate are both considering legislation that will reduce preventable health-related costs of State programs. Such measures would involve wellness and prevention programs (including smoking cessation) for State-funded employee insurance and Medicaid. Although all the particulars have not yet been fully developed, the implementation of such endeavors would certainly prove highly beneficial, and Texas would see a net gain in economic activity of billions of dollars. In addition, thousands of jobs would be created.
In a recent study performed by my firm, The Perryman Group, we discovered that a comprehensive program for State employees offers notable economic returns on the State’s investment in both absolute and relative terms, with gains in business activity of about $343.4 million in annual spending and nearly 2,500 jobs even after removing the State’s spending required for the programs and accounting for the fact that the money was diverted from other purposes.
Moreover, we found that a comprehensive wellness program for Texas’ Medicaid recipients could be expected to add more than $2.7 billion in annual spending to the economy, generate over $2.5 billion in fiscal resources for the two-year budget cycle, and create 20,000 permanent jobs on a net basis.
Most illuminating is the fact that these programs more than pay for themselves, with net annual fiscal revenues to the State of comprehensive wellness and prevention programs of almost $169.3 million for State employees. Net fiscal revenues for Medicaid recipients for a comprehensive program would be almost $1.3 billion per year. These effects could be realized within a few years of implementation, and studies have shown that wellness programs can pay for themselves quickly; there is every reason to believe a well-crafted program could be revenue-neutral for the State within the first two years.
Wellness and smoking cessation programs in the private sector have been very successful. Texans are generally less healthy than national norms and could clearly benefit from prevention and wellness programs. Such programs dramatically improve the quality of life of those involved. They also have the potential to reduce medical care costs. In addition, their impact on the economy can be highly positive. Wellness programs are a “win-win” and, as such, they are certainly worthy of substantial support.
posted @ 08:02 AM CST [link]
Friday, April 20, 2007
Tourism in Texas
To Texans, the award winning advertising campaign with the theme: Texas. It's Like A Whole Other Country® says it all. Texas is home to over 20 million people, more than 4,959 square miles of fresh water, 624 miles of coastline, 191,000 miles of streams and rivers, the largest concentration of bats in the world, the world’s largest livestock auction, and three of the nation’s ten largest cities (not to mention my personal favorite – the meteor crater in Odessa). It is no wonder that Texas is known for its variety of travel and leisure activities. The importance of tourism is widely understood by cities great and small. May 13-21, 2006 was recognized as Texas Tourism Week to remind people of all the opportunities for travel as well as highlight the Texas travel industry and its contribution to the state economy.
In 2005, total travel spending in Texas reached $49.2 billion, a 10.8% increase over 2004 spending. While this growth was due in part to higher room rates and gasoline prices, in (inflation-adjusted) dollars, travel spending was still 4.8% higher in 2005 than the previous year. In addition, total travel spending resulted in local and state tax revenues of $3.4 billion. Among the top regions traveled in the state were the Metroplex with over $16 billion in total spending and the Gulf Coast with more than $12 billion. The least amount spent occurred in Northwest Texas which still brought in over $724 million. In 2005, travel spending in Texas of $14.6 billion directly supported 514,000 jobs. The bulk of these jobs were in food services (143,800); arts, entertainment, and recreation (108,500); and accommodations (97,000). However, travel spending also supported jobs in other industries such as professional services; government; construction; and finance, insurance, and real estate through re-spending of travel-related revenues. It is estimated that the spillover of travel spending amounted to an additional 452,000 jobs and $14.6 billion in earnings. Therefore, travel-generated earnings, direct and secondary, came to $29.1 billion in 2005.
Texas was the destination for more than 202 million visitors in 2005 (business and leisure), a 5.2% increase from 2004 and a 15.9% rise since 2000. While growth in business visitors (17% over the previous year) contributed to the overall climb in visitors, leisure travelers also grew (0.9%) from 2004 and have seen substantial increases since 2000. In fact, the majority of Texas visitors (70%) travel for leisure purposes. Non-residential travel to Texas rose from 39.4 million in 2004 to 44.8 million in 2005. Residential travel also grew from 153.5 million in 2004 to 158.1 million in 2005. The average spending per day per person was slightly above $100, and half of all travel spending was done by Texas residents. Other US residents contributed about 40.4% of total spending, and international visitors provided another 9.5%. Many international visitors frequent Texas with the largest number (over 6.5 million) coming from Mexico. The top 10 countries represented by international visitors to Texas were Mexico, Canada, the UK, Germany, France, Japan, China/Hong Kong, Brazil, Korea, and Australia.
So where are these people headed? Good weather and myriad options make Texas a prime destination for outdoor activities. Texas Parks and Wildlife Department (TPWD) maintains 81 state parks and natural areas, 34 state historic sites, 52 wildlife management areas, 8 state fish hatcheries, and the Parrie Haynes Ranch drawing approximately 500,000 visitors a month. While many Texans take advantage of these amenities, they are also common destinations for non-Texans as well. For example, the TPWD 2007 Plan of Action report indicates that roughly 60,000 non-residents bought licenses to hunt in Texas and 96,000 out-of-state anglers traveled to Texas to fish.
A study done by D.K. Shifflet & Associates, Ltd., indicated that the overall top attraction in Texas in 2005 was the Alamo, which has held this ranking since 2003. It was followed by the River Walk (Paseo del Rio), San Marcos Outlet Malls, Sea World of Texas, and Six Flags Over Texas. The study also revealed that non-Texans and Texans top travel destinations differed slightly. While the Alamo was the top attraction for non-Texans, San Marcos Outlet Malls was the number one travel destination for Texans. However, both ranked the River Walk as number two. Also, among the top five for both Texans and non-Texans was Sea World of Texas, and the state capital was sixth on the list of attractions for both groups. Texans, however, also listed Ameriquest Field and Cabela’s (Buda) among the top 30 attractions in Texas while non-Texans listed JFK assassination-related sites. For both Texans and non-Texans, the LBJ and George Bush presidential libraries made the list of top 30 travel destinations.
Large cities in Texas are not the only locations receiving economic benefits from tourism. Small towns across America have been hard hit by large-scale businesses and industrial farming replacing local-owned stores and family farms. Many of these towns in the state have developed creative ways to attract visitors and boost their economies through tourism. Paris, Texas, for example, draws visitors with its 65-foot replica of the Eiffel Tower that is “Texanized” by donning a cowboy hat. The much smaller city of Albany has a highly acclaimed art museum in a building that was once a jail in another era.
All in all, Texas tourism is a thriving contributor to the state economy. The state actively tries to keep the tourism industry expanding with advertisements as well as other public relations efforts both nationally and internationally. Indeed, the campaign theme, Texas. It's Like A Whole Other Country®, with its little bit of everything including historical districts, the feeling of the old West, long stretches of open plains, flowing rivers, ranches as large as some eastern states, sophisticated urban centers, and award winning restaurants, seems to be right on the money.
posted @ 07:42 AM CST [link]
Friday, April 13, 2007
Agriculture
Sometimes, things happen so automatically that we fail to recognize their complexity or importance. Take, for instance, each time you sit down for a meal or visit a drive through to pick up something to eat. How often do you consider the various elements required to provide the food? Moreover, how often do you think about the producers of life’s other necessities such as clothing and shelter? For most of us, I suspect, the answer would be “seldom.”
However, every time we purchase such items, we’re involved in an extremely complex system of production, distribution, and marketing. While Texas has diversified way beyond the days when cotton or cattle were “king,” agriculture is still an important part of the economy of the Lone Star State.
Texas is the second-largest agricultural state in the nation and is also one of the most diverse. Operations from the Gulf Coast to the Panhandle generate about 7% of the nation’s total agricultural income. Approximately 80% of Texas’ 262,000 square miles of land area is in some form of agricultural production, and about nine out of every 10 agricultural endeavors are operated by individuals or families.
In terms of cattle and calves, Texas ranks first in the nation. The state is also the leader in the number of cattle operations and is the top producer in the US of cotton and hay as well as sheep, wool, goats, mohair, and horses. The one million horses in Texas represent about 11% of the total number across America. Additionally, the Lone Star State is the nation’s third largest horticultural producer.
While less than 2% of Texans are involved in day-to-day farming or ranching, each farmer in the state produces enough food and fiber for 129 people.
About 74% of the state’s agriculture products are consumed in the US; the remainder is shipped around the world. In fact, Texas is the third-largest exporter of agricultural commodities, particularly live animals and red meat, cotton and cottonseed, hides and skins, wheat and products, and feeds and fodder.
In terms of real gross product (RGP or output), the agriculture industry (including farming, forestry, fishing, logging, hunting, trapping, and related support activities) accounts for $7.77 billion of the state’s overall output. It is projected to realize a compound annual growth rate of 2.74% over the next five years.
Numerous other industries link to agriculture including transportation, equipment, processing, marketing, wholesale and retail sales, education, seed, fertilizer, and licensing, and myriad others. The economic impact of the agriculture industry on the state’s economy is thus sizable.
While the percentage of individuals directly involved in agriculture production is not as large as it was a few years ago, the importance of this industry cannot be minimized.
The advent of new and innovative technology and the enhancement of telecommunications infrastructure continue to transform agriculture into a high-tech business. New advances in research, production, and marketing are also proving highly advantageous for producers. In fact, the use of technology to generate more goods while using fewer resources over a period of several decades makes agriculture the ultimate high-tech industry. Moreover, many of the advances in biotechnology which change our lives in fundamental ways have their origins in efforts to produce more and better crops and livestock.
For individuals seeking careers, the agriculture industry offers many opportunities beyond farming or ranching. Among them are communications, engineering, processing, research, animal health, livestock pharmaceuticals, and bio-fuel programs.
And thanks to the Internet, rural communities across Texas can now compete on a global basis. As a result, the industry’s potential for the years ahead continues to rise.
We frequently take for granted the important role the agriculture industry plays in our state’s economy and almost nonchalantly accept our abundant and reliable supply of food, clothing, and shelter, all of which are dependent to a large extent on this dynamic sector.
posted @ 08:15 AM CST [link]
Friday, April 6, 2007
Engineering and Computer Science Graduates
Economic growth and development is dependent on numerous variables. In many cases, the availability of engineering and computer science talent is a major determinant.
With the complexity and sophistication of operations in most industries—ranging from manufacturing to oil and gas exploration to construction—there is a corresponding rise in the need for engineers and computer science specialists. Securing sufficient numbers of these kinds of skilled professionals in emerging sectors projected to dominate the business landscape of tomorrow is critical.
Those geographic areas that are able to meet the escalating demand for engineers and computer scientists are not only likely to reap the rewards of their services and leadership, but will undoubtedly be highly attractive to corporations seeking the best locations for their operations.
In fact, a substantial supply of scientific and engineering personnel is frequently cited as the most important factor in drawing new business activity into a region, especially since technology centers tend to cluster around locales with a plentiful supply of these types of workers. The capacity, efficiency, and productivity of the economy of such a location is significantly enhanced.
Therefore, it is easily understood that stimulating the number of engineering and computer science students and, hence, the quantity of these science professionals available to enter the workforce, can produce significant positive effects.
Across the US, hundreds of thousands of new engineering and computer science jobs are predicted to be created over the next 10 years. About half of the employment in these fields is forecast to fall within the professional, scientific, and technical services sector; other significant sources of jobs include government and manufacturing.
Industrial engineering is projected to see growth in the range of 20% over this timeframe, closely followed by civil and environmental engineering. Computer-related professions are also expected to continue to experience significant expansion.
Moreover, the availability of engineers and computer scientists is a primary factor in capturing emerging technology sectors. These professions typically involve relatively high wages (compared to other four-year college degrees) and high value-added occupations.
Unfortunately, Texas currently lags most of its key competitor states in the number of engineering and computer science degrees earned each year. Of the 10 most populous states, Texas ranks ninth in the number of science/engineering degrees awarded per thousand college-age residents. In fact, over the past decade or so, the rate has remained fairly constant, while other states have achieved noteworthy gains.
The evolution of the US business environment is generating a significant demand for engineers and computer scientists. An initiative from state universities in Texas to improve the graduation rates of students majoring in engineering and computer science would have remarkably positive impacts on business activity. In a recent study, my firm estimated that adding 25% to the pool of engineering and computer science graduates would lead to job gains across the state of more than 29,000 in 10 years and over 65,000 in 15 years. These enhanced opportunities would be spread through both large and small Texas communities.
As noted, a concentration of engineers and computer scientists improves the ability to attract emerging, high-growth sectors, thereby substantially benefiting economic development. If Texas were to generate a 1% increment of the US market share of these industries, the aggregate gains to the state economy would total almost $17 billion in annual output and more than 174,000 permanent jobs.
Increasing the number of engineering and computer science graduates enhances both the productivity and the capacity of the workforce. Efforts in this regard are vitally important to our state’s long-term prosperity and are certainly worthy of considerable support.
posted @ 08:02 AM CST [link]