Benefits September 19, 2003

HHS Puts Price Tag on the Battle of the Bulge

September 19, 2003 (PLANSPONSOR.com) - In the day and age of double-digit health-care increases, the Department of Health and Human Services (HHS) has pointed its finger at a one of the players responsible for the rising costs: obesity.
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Overall, the direct health care costs of obesity represent a significant portion of total annual US health care expenditures, with estimates ranging from 4.3% of total spending to as much as 9.1%.In fact, obesity-related health problems cost the nation as a whole between $69 billion and $117 billion per year, the HHS report found.

Feeling a sizeable portion of the weight are employers, primarily in terms of lost productivity and the increased costs in health and disability insurance. As evidence, HHS points to data from 1994 that showed employees lost 39.3 million workdays, made 62.7 million visits to physicians’ offices and logged 239 million days where their activity was restricted because of conditions linked to obesity.

The reason for the higher costs is that as body mass increases, so too do health-care utilization and costs, the HHS report found. In fact, in 1994 obesity-related health problems ended up costing US business $13 billion. Broken down, the costs were spread among:

  • $8.0 billion health insurance expenditures
  • $2.4 billion for sick leave
  • $1.8 billion for life insurance
  • close to $1 billion in disability insurance.

Contributing to this accumulation is obesity accounting for as much as a 36% increase in costs for inpatient and ambulatory care for individuals. In fact, obesity-induced costs are greater than that attributed to aging 20 years, smoking, or problem drinking. Also, obese individuals have high annual costs for medications, particularly those for diabetes and cardiovascular disease (CVD). One researcher estimated that obese individuals might pay as much as 77% more for medications compared to non-obese individuals, the HHS report found.

Healthy Lifestyles

On the other side, the report points to evidence that patients who lose weight reduce their use of these kinds of medications, and even modest sustained weight loss – a reduction of 10% in body weight – may reduce expected lifetime health care costs for major obesity-related diseases by $2,200 to $5,300, depending on age, gender, and initial body mass index (BMI).

It is the reduction in costs that has HHS pointing to the possible effectiveness of wellness and work/life programs. In fact, spotlighted in the HHS report are programs at Motorola. These implementations at the communication company have culminated in saving almost $4 for every $1 it invests in its wellness benefits. Included at Motorola are programs such as:

  • disease management
  • flu immunizations
  • cancer screenings
  • smoking-cessation programs
  • 24-hour nurse telephone line.

A copy of the full report can be found at http://aspe.hhs.gov/health/prevention/prevention.pdf .

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