NASHVILLE - A report released Wednesday says that cutting the state's number of high school dropouts in half would result in annual savings of $127 million in TennCare, the state's Medicaid health care program for many of Tennessee's poor.
In Georgia, the cost savings would be $111 million, according to the Alliance for Excellent Education.
The group's report, Well and Well-Off: Decreasing Medicaid and Health-Care Costs by Increasing Educational Attainment, examines Medicaid spending in all 50 states as a result of alcoholism, heart disease, obesity and smoking, then makes assumptions about Medicaid savings based on educational attainment.
Support for the report was provided in part by State Farm as part of a series of documents that demonstrates the economic benefits from improving high school graduation rates.
"An educated citizen is a healthy, productive and happier citizen," said Alliance President Bob Wise, a former governor of West Virginia, in a news release. "And, as this report shows, healthier citizens are also a great benefit to Tennessee's economic health."
According to the report, the $127 million in annual Medicaid savings breaks out to $16 million in preventive costs related to heart disease, $33 million linked to obesity, $25 million related to alcoholism and $34 million associated with reduced smoking and tobacco use.
The Alliance worked with Dr. Peter Muennig of Columbia University to make the connection between high school graduation and health.
Muennig's research shows that a high school graduate is about 50 percent less likely to use Medicaid compared to a high school dropout.
Using that finding, he incorporated each state's specific contribution to Medicaid to produce an estimate of what would be saved for each additional high school graduate.
TennCare Director Darin Gordon said he hasn't seen the full report but noted "it isn't a complete shock. The concept of higher education attainment, raising education and having positive effects and better health and lower demands on your entitlement programs is not a new concept."
What he hasn't seen before were dollar estimates on savings.
Contact staff writer Andy Sher at email@example.com or 615-255-0550.