The High Cost of Obesity

It’s a touchy subject—right up there with politics and religion. But obesity reaches high enough numbers and dollars that it can’t be quietly swept under the rug. According to the Centers for Disease Control and Prevention (CDC), 34 percent of U.S. adults aged 20 and older are obese, a looming figure that’s more than doubled since the late 1970s.¹ The figure has recently settled after a quarter-century of steady growth, leaving the majority of U.S. adults—approximately 66 percent—overweight or obese, with health care costs continuing to rise with no end in sight.²

What’s It Costing?

Actual Costs: Health Care Expenses
A healthy workforce often equals a healthy corporate bottom line—and the opposite can also be true. Being overweight, which is defined as having a Body Mass Index (BMI) between 25 and 29.9, or obese, a BMI of 30 or higher, impacts health care costs by nearly $93 billion a year. These actual costs include preventive, diagnostic, and treatment services like doctor’s appointments, medicine, and hospital and nursing home care.³

According to the Conference Board, a New York–based business membership and research organization, obesity has accounted for a 36 percent increase in spending on health care services, surpassing smoking and alcoholism.⁴ It also contributes to health care expenditures that are about one-third above medical costs of otherwise similar people of normal weight.⁵

Why the exorbitant health care costs? Being problematically heavy affects more than just the waistline. “Your body becomes more and more resistant to insulin if you’re obese,” explains Dan Alexander, a physician at the Pauley Heart Center at Virginia Commonwealth University in Richmond, Virginia. It can contribute to significant health problems—notably, cardiovascular disease, some cancers, type 2 diabetes, stroke, high cholesterol levels, coronary disease, gallbladder disease, hypertension, sleep apnea, and many joint and arthritic conditions—all of which require specialized medical attention.

And guess who’s footing the bill? About half the cost of health care related to obesity is spread to taxpayers; the average taxpayer pays about $175 a year toward obesity-related medical expenses for Medicare and Medicaid recipients.⁶ These overwhelming expenses are also driving insurance rates, costing businesses and employees ever-increasing amounts. Health benefit costs rise each year; they increased an average of 6.1 percent from 2006 to 2007, higher than the growth in workers’ earnings and inflation.⁷ Out of necessity, companies are increasingly shifting the burden to employees.

Larry Tucker, director of health promotion in BYU’s Department of Exercise Sciences, says cost shifting makes employees more accountable. “The idea here is, if you’re not taking care of your health, you will pay for it,” he says, acknowledging that while not all health problems are a function of lifestyle, most are.

Tucker—together with Alan Clegg, who earned his graduate degree in exercise sciences from BYU in 1997—conducted a two-year study to compare health care use and costs in employees with different lifestyles. The research team followed 982 employees and their spouses, with a mean age of 32.1.⁸

Their results showed that obese individuals had almost five more health claims than nonobese individuals and were nearly twice as likely to have spent more than $5,000 on health care. Initially, according to Tucker, most of that comes out of the pocket of insurance companies, but it eventually comes back to the employer. This is because prior years’ costs dictate future premiums. The study determined that obesity is actually making an impact, even among young employees.

“We have a challenging environment in which to maintain our weight,” he says. “Food is so convenient, food is good-tasting, and food is easy to prepare.” Consequently, he believes, the prevalence of obesity isn’t likely to decrease any time soon.

Associated Costs: Absenteeism, Loss of Productivity, and Rehiring and Retraining
Unfortunately, actual cost of health care associated with obesity only represents a portion of the epidemic’s price tag. Associated workplace costs—absenteeism, loss of productivity, and the cost of rehiring and retraining—are not cheap either, and depending on the source, could top the price of actual costs.

Those with obesity are more prone to absenteeism due to illness, which is costing $4.3 billion a year in the United States, reports a study in the Journal of Occupational and Environmental Medicine.⁹ The study revealed that obese women were 61 percent more likely to miss work than women at a healthy weight, and the figure spiked to 118 percent for morbidly obese women, defined as those with a BMI of 40 or higher. These percentages applied to missed work across all occupational categories. For men, the possibility of missed work time increased only for morbidly obese men who were managers, office workers, and equipment operators.

“It’s obvious that a healthy workforce is important, as absenteeism is a huge cost and burden on employers,” Tucker observes. He drew similar conclusions from another study he conducted, this time in collaboration with Glenn Friedman, MD, president of the HELP Foundation in Tempe, Arizona. Together they examined the relationship between obesity and missing work due to illness. Their findings revealed that when compared to employees of normal weight, obese employees were more than twice as likely to experience high levels of absenteeism and were about one and a half times more likely to suffer from moderate absenteeism.¹⁰

“If you’re not there, you can’t be productive,” Tucker notes. And even while at work, he adds, obesity can be problematic. He cites jobs where physical work may be required, which is fairly common in an industrial society. There’s more and more employee testing, he adds, to prevent obese people from working in a particular field. “You can’t have an obese fireman trying to go up stairs to put out a fire.”

Not performing at full capacity can be a monetary loss, reports a study that appears in the Journal of Occupational and Environmental Medicine.¹¹ Researchers measuring various aspects of productivity in a random sample of 341 manufacturing employees found that workers with moderate to extreme obesity were costing more because of health-related work restrictions. These include extra time needed to complete work tasks and the lack of ability to meet physical work demands and could be attributed to difficulty moving because of increased body size or weight or because of a higher rate of pain due to other problems like arthritis.

Additional light was shed by a new government study associating too much weight with too little sleep, a possible factor in lower rates of productivity. People who sleep fewer than six hours a night—or more than nine—are more likely to be obese, the study reports.¹²

One study put a price tag on the loss of productivity due to obesity among Americans ages 17–64: an estimated $3.9 billion dollars annually.¹³ Yet another source targets obesity as a principle cause for loss of productivity due to chronic illness. The Milken Institute, a nonprofit group in Santa Monica, California, says American businesses lose $1.1 trillion each year for that reason.¹⁴ The institute reports that lower obesity rates would merit $254 billion a year in productivity gains as well as cut $60 billion a year spent on treatment.¹⁵

As if the excess cost of obesity is not challenging enough, its associated risks land the epidemic near the top of leading causes of preventable death, second only to smoking.¹⁶ Tucker believes it’s just a matter of time before excess weight overtakes smoking as the No. 1 avoidable killer.

About 112,000 deaths a year in the United States are linked to obesity, reveal scientists at the CDC.¹⁷ Individuals with obesity have a 10 to 50 percent increased risk of death, compared with healthy weight individuals (BMI 18.5 to 24.9).¹⁸ Most of the increased risk can be attributed to cardiovascular causes.¹⁹

Additionally, illnesses caused by obesity shorten the average U.S. lifespan more than car accidents, homicides, and suicides combined, reports a study in the New England Journal of Medicine.²⁰ And if obesity doesn’t slow down, it will shorten the average lifespan by two to five years, exceeding the effects of all cancers, and would cause longevity to plateau or fall from its all-time high of 77.6 years. S. Jay Olshansky, a demographer at the University of Illinois who led the study, says, “The take-home message is that obesity clearly needs to be considered in an entirely new light—it is far more dangerous than we ever thought.”

The death or resignation of an employee due to illness associated with obesity generally means the rehiring and retraining of someone new—an inordinate expense. A Rutgers University School of Management study states the average cost associated with the turnover of a management position to be 1.5 times a full year’s salary. For example, a $55,000 position would end up costing an organization $82,500.

The costs associated with employment termination and replacement, along with the training of new employees, can easily cost a small company close to $50,000 annually.²¹ While it may seem wrong to hire or fire employees because of weight, legal experts say it’s not against the law, except in a few jurisdictions with a ban against weight-related discrimination: Michigan; Washington, D.C.; and San Francisco and Santa Cruz, California.²²

Increasing Wellness in Your Workplace

It is possible for employers to help slow the rising costs of insurance and at the same time increase productivity and reduce absenteeism. Tucker says employers can be particularly influential given the amount of contact time they have with employees. “There are a lot of opportunities in the workplace to help people master these lifestyle choices.”

Tucker thinks incentives in the workplace can help employees make lifestyle changes. In 2007 the BYU Wellness Program and BYU’s health insurance carrier, Deseret Mutual Benefit Administrators, initiated an incentive program where university employees would receive $100 at the end of the year for participating in various wellness activities each quarter. This year the incentive jumped to $200, and participation took a gigantic leap as well. They may not do it because it’s healthy, he notes, but they’ll do it for cash, and hopefully, they’ll form good habits.

Management at Orenco Systems, Inc., an Oregon-based company that provides engineering services and manufactures wastewater treatment systems, links health promotion with improving the company’s bottom line. Mary Heilner, director of human resources at Orenco, explains, “You hire the whole person. They need to be happy and as well as they can be in all things. You do things with a cost purpose, as well, when you’re in business.”

That explains Orenco’s flu shot clinic each year. “Obesity is the same kind of thing,” she says. The company recognizes that reducing obesity could mean fewer insurance claims as well as fewer absences, hence the opening of a six-machine gym onsite. Jeff Ball, one of the owners of the 300-employee company, says the gym provides an added convenience. “I know that it has encouraged exercise for some folks where they wouldn’t be nearly as committed if they had to go to a private gym or set up something at home,” he says.

Management at Anthem Blue Cross and Blue Shield, owned by the parent company WellPoint, also strives to create an environment where wellness prevails. As the largest health benefits company in the country, Anthem houses wellness centers in many of its national locations. Approximately 60 percent of eligible employees are members of the free centers, which are highly utilized, says Beena Thomas, WellPoint’s wellness director in Atlanta. Reimbursement for gym memberships is also available to those working in locations without a center. The incentive not only helps attract talented staff, she adds, but also helps with retention.

These companies are not alone. More than 81 percent of U.S. businesses with 50 or more employees have some form of health promotion program in place, believing the cost will pay off in the long run.²³

The bottom line is this: Lifestyle affects health care costs, absenteeism, productivity, and retention. And while obesity may not be an easy conversation topic, there are ways for employers to promote wellness, enhance employees’ awareness of healthy lifestyle choices, and incentivize healthful eating habits and aerobic activity. People left on their own will almost always gain weight, insists Tucker, saying that health problems start to increase when individuals reach a BMI of about 25.

“When people are healthier, they have a higher quality of life,” he says, “and everyone benefits when quality of life goes up.”

Who doesn’t feel good about that?

Running With a Company Perk

Marriott School alum Aaron Smyth took his company’s fitness incentive and literally ran with it. The incentive is one aspect of the National Health and Wellness Program at Deloitte, one of the largest professional services firms in the world. As part of the program, employees receive reimbursement for half the cost of fitness-related expenses up to $500 a year. Virtually everything counts: personal training, weight-loss programs, home equipment, yoga, and Smyth’s personal favorite, race registration fees.

Smyth, an audit assistant for Deloitte in Washington, D.C., took advantage of the perk and purchased workout clothing and started entering races. “I would already be doing the exercising, even without the incentive,” he says, “but I do believe it helps me do more actual races instead of just training.” This year, the 2007 MAcc graduate plans to use the full amount to spring for a cutting-edge road bike.

Mandy Sigmund, health-fair manager at Deloitte in Chicago, says the incentive creates a win-win situation: “It’s important our employees stay healthy and have balanced lifestyles,” she says. “People are more productive, and in the long run, we hope insurance costs will be lower.”

Body Mass Index

More About BMI:

Although not a perfect scale, Body Mass Index (bmi) is often used to diagnose obesity as a medical condition. While bmi correlates with the amount of body fat, it does not directly measure body fat. Therefore, some individuals, like athletes, may have a bmi identifying them as overweight even though they may not have excess body fat. Other methods used to estimate body fat are skinfold thickness and waist circumference measurements; calculation of waist-to-hip circumference ratios; and procedures like ultrasound, computed tomography, and magnetic resonance imaging. Oh, and don’t forget the bathroom scale.

Use the above table to learn your adult bmi. A bmi between 18.5 and 24.9 is within the healthy weight range; a bmi between 25 and 29.9 indicates the overweight range; and a bmi of 30 or above falls in the obese range.

—Adapted from “Clinical Guidelines on the Identification, Evaluation, and Treatment of Overweight and Obesity in Adults: The Evidence Report,” by the National Heart, Lung, and Blood Institute, 1998; and “About bmi,” by the Centers for Disease Control and Prevention, May 2007.

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Article written by Jennifer Mathis
Illustrations by Arthur E. Giron

About the Author:
Jennifer Mathis is a freelance writer and editor living in Mechanicsville, Virginia. She earned her bachelor’s degree in 2000 and her master’s degree in mass communications in 2002 from BYU. Tips For a Healthier Workforce Have friendly competitions. Offer healthier snacks in vending machines, healthier catering options, and healthier choices in cafeterias. Carve time out for and promote lunchtime or afternoon walks. Create after-work athletic leagues. Educate employees about the benefits of eating wisely and exercising regularly. Schedule brown-bag lunches with motivational speakers who will instill lifestyle changes. Launch a wellness program where prizes can be earned for participation. Offer a discount on insurance premiums for employees who actively participate in wellness programs. —Suggestions supplied by Larry Tucker, professor and director of health promotion in BYU’s Department of Exercise Sciences; Mary Heilner, human resources director for Orenco Systems, Inc; and Beena Thomas, WellPoint’s wellness director in Atlanta.

Notes:

1. Centers for Disease Control and Prevention, “Overweight and Obesity.” (4 March 2008). Retrieved April 2008 from www.cdc.gov/nccdphp/dnpa/obesity/.
2. National Center for Health Statistics, “New CDC Study Finds No Increase in Obesity Among Adults; But Levels Still High.” (28 November 2008). Retrieved May 2008 from www.cdc.gov/nchs/pressroom/07newsreleases/obesity.htm.
3. Weight-Control Information Network, “Statistics Related to Overweight and Obesity.” (May 2007). Retrieved April 2008 from win.niddk.nih.gov/statistics/index.htm#econ.
4. The Inside Training Newsletter, “Skinny on Workplace Obesity.” (16 April 2008). Received April 2008 via email.
5. Yale University Rudd Center for Food Policy and Obesity, “FAQ.” (2007). Retrieved May 2008 from www.yaleruddcenter.org/what/economics/faq.html#seven.
6. Eric A. Finkelstein, Christopher J. Ruhm, and Katherine M. Kosa, “Economic Causes and Consequences of Obesity,” Annual Reviews Public Health 26 (2005): 248.
7. The Kaiser Family Foundation and Health Research and Educational Trust, “Employer Health Benefits 2007 Annual Survey.” (September 2007).
8. Larry A. Tucker and Alan G. Clegg, “Differences In Health Care Costs and Utilization Among Adults with Selected Lifestyle-Related Risk Factors,” American Journal of Health Promotion 16:4 (March-April 2002): 225–33.
9. John Cawley et al., “Occupation-Specific Absenteeism Costs Associated with Obesity and Morbid Obesity,” Journal of Occupational and Environmental Medicine 49 (12) (December 2007): 1317–24.
10. Larry A. Tucker and Glenn M. Friedman, “Obesity and Absenteeism: An Epidemiologic Study of 10,825 Employed Adults,” American Journal of Health Promotion 12 (3) (January–February 1998): 202–207.
11. Medical News Today, “Obesity Linked to Reduced Productivity at Work.” (9 January 2008). Retrieved June 2008 from www.medicalnewstoday.com/articles/93402.php.
12. Mike Stobbe, “Lack of, Too Much Sleep Linked to Obesity, Study Shows.” Retrieved June 2008 from www.ysun.com/national/lack-of-too-much-sleep-linked-to-obesity-study/76048/.
13. Weight-Control Information Network, “Statistics Related to Overweight and Obesity.”
14. Ross DeVol et al., “An Unhealthy America: The Economic Burden of Chronic Disease—Charting a New Course to Save Lives and Increase Productivity and Economic Growth.” (October 2007). Retrieved April 2008 from www.milkeninstitute.org/publications/publications.taf?function=detail&ID=38801018&cat=ResRep.
15. Ibid. Retrieved June 2008.
16. National Heart, Lung, and Blood Institute, “Clinical Guidelines on the Identification, Evaluation, and Treatment of Overweight and Obesity in Adults: The Evidence Report.” (1998). Retrieved May 2008 from www.nhlbi.nih.gov/guidelines/obesity/ob_gdlns.htm.
17. Centers for Disease Control and Prevention, “Quick Facts: Economic and Health Burden of Chronic Disease.” (8 April 2008). Retrieved May 2008 from www.cdc.gov/nccdphp/press/.
18. Weight-Control Information Network. “Statistics Related to Overweight and Obesity.”
19. Ibid.
20. Rob Stein, “Obesity May Stall Trend of Increasing Longevity.” (17 March 2005). Retrieved May 2008 from www.washingtonpost.com/wp-dyn/articles/A41324-2005Mar16.html.
21. Lianne Larson, “Employee Turnover.” (2008). Retrieved May 2008 from www.usga.org/turf/green_section_record/2002/sept_oct/employee.html.
22. Erica Duecy, “Fat Fight Looms Larger as Weight Figures Heavily in Hiring Process,” Nation’s Restaurant News 39:12 (21 March 2005): 1147–48.
23. Healthy Achievers, “The Cost/Benefit of Worksite Wellness.” (2008). Retrieved June 2008 from www.healthyachievers.com/healthy-achievers/research.cfm.