Managing Health Care Costs: Companies put obesity on the front burner
Faced with soaring health care costs and lost productivity, America’s employers are trimming the fat. Obesity is the target as business health insurers draw a straight line between overweight workers and insurance claims for diabetes, hypertension, heart disease, high cholesterol and other conditions.
"Information about obesity programs is our biggest request these days,” says Ann Clark, whose San Diego–based Ann Clark Associates administers employee assistance plans nationwide. “Employers want to know what they can do about it. And, they have a sense of urgency about it.” Clark says a combination of rising health care premiums—up an average 9.2 percent last year and more than 57 percent over the past five years—and a steep run-up in obesity among the nation’s work force has galvanized employers.
Nearly one in three adult Americans is now considered obese, which is more than twice as many as in 1980. Obesity-related costs total an estimated $13 billion a year for U.S. companies and account for 9.1 percent of annual medical expenditures, 39 million lost workdays and an uncalculated amount of lost productivity by those who report to work but are limited by their weight issues.
That’s why most companies look to offer incentives or rewards to motivate employees to adopt healthier lifestyles. Intuit, which develops and markets software for personal finance and tax preparation, offers $350 annual subsidies to workers who want to join fitness clubs. At the same time, it provides an in-house gym and other vehicles that it hopes will engage workers to make better lifestyle choices. It also offers nutritional tips and healthy cafeteria options, educational seminars and special classes for such things as yoga or ballroom dancing. “We are trying to educate our workers so they will be motivated to make lifestyle changes that improve their health. We feel like we are in a partnership with them,” Sarah Wilkins, a benefits analyst for Intuit, says.
Clark says that some companies have given up on experts finding wellness solutions and instead are experimenting on their own with programs that range from nutritional counseling and tips to exercise classes or walking programs.
Cheryl Pegus, medical director for Aetna in Blue Bell, Pa., which provides health care benefits for more than 28 million U.S. workers, says the health care industry has been slow to push employers and workers into wellness programs. “We need to figure out how to communicate the value of these things, how to incorporate it into companies and make sure that people see the benefits of it,” she says.
Carol Harnett of Hartford Financial Services Group, a major insurance and financial services company in Hartford, Conn., says many companies don’t recognize the connection between obesity-related health problems and employee disability claims.
Health issues from preventable diseases account for up to 70 percent of all disability claims, she says. She points out that only 16 percent of those with New Year's resolutions to improve health are still sticking to them by July 1. Individuals who drop 100 calories a day (equivalent to one pat of butter) and exercise enough to burn another 100 calories (a one-mile walk) will make progress over their weight, she notes. “It's really about people doing just one or two things that reduce the risk factors for certain illnesses. If employers would get their employees to do that they would see a positive change in their health care costs,” Harnett says.
A. Getting Bigger
The obesity rate among American adults has been soaring over the past three decades.
YEAR % POPULATION OVERWEIGHT* % POPULATION OBESE
2002 65.2 31.3
1994 56.0 23.3
1980 47.4 15.1
1974 47.7 14.6
* Includes obese
B. Ballooning Costs
While the average per capita cost of health care increased 50.7 percent over a 14-year
period, the costs linked to obesity climbed 357 percent.
YEAR AVERAGE PER CAPITA HEALTH CARE COST COST FROM OBESITY
2001 $3,298 $1,244
1987 $2,188 $ 272
Sources: Centers for Disease Control; Health Affairs Policy Journal