Obesity Weighs Heavy on Workers’ Compensation Claims
It’s time to face facts about our nation’s fat. About a quarter of our nation can be characterized as obese, according to the Centers for Disease Control and Prevention (CDC). And while that presents health implications for those who are overweight, it also presents serious implications for the workers’ compensation insurance industry.
According to the National Institutes of Health (NIH), the term “overweight refers to body weight that is at least 10 percent over the recommended weight for a certain individual. Recommended weight standards are generated based on a sampling of the U.S. population or by body mass index (BMI), a calculation that assesses weight relative to height.” In common terms, “overweight” refers to an individual with a BMI of more than 25. Obesity typically refers to any individual with a BMI of more than 30. BMIs of 30-34.9 are considered Class I moderately obese; 35-39.9 are considered Class II severely obese; and BMIs of 40 and above are considered Class III morbidly obese.
Obesity currently results in an estimated 400,000 deaths a year in the United States and costs the national economy nearly $122.9 billion annually, according to ObesityinAmerica. org. Childhood obesity affects more than 15 percent of the population under 18 years old that is classified as overweight. And the numbers that tip the scales are growing.
Obesity impacts lifestyle and can lead to lower self-esteem, depression and discomfort in social situations, and significantly diminish quality of life. Obesity increases a person’s risk for developing serious health conditions such as diabetes, heart disease, hypertension, metabolic syndrome, and polycystic ovary syndrome. Obesity also raises blood cholesterol and triglycerides, and heightens the possibility of stroke. Other diseases associated with high BMI levels include various forms of cancer, end-stage renal disease, low back pain, sleep apnea and incontinence. In 2004, the CDC ranked obesity as the No. 1 health risk facing America.
The National Council on Compensation Insurance (NCCI) said “obesity is a matter of increasing concern, with the percentage of the population reported as obese increasing from 12 percent in 1990 to more than 26 percent in 2007. By the year 2020, 40 percent of men and 43 percent of women are predicted to be obese, with more than 70 percent of both men and women predicted to be overweight.”
NCCI is concerned about this trend’s effect on workers’ compensation, as obese workers are at risk for many diseases and health conditions — and have poorer job performance. “From a workers’ compensation perspective, claims involving obesity are seen to have markedly higher indemnity and medical costs.”
There have been a number of recent studies that document the workers’ compensation effects of obesity, NCCI noted. As expected, obesity can impact mortality rates. The studies also showed that obesity reduces productivity and increases the percentage of reported impaired activity when associated with comorbidities of type 2 diabetes, high cholesterol and hypertension.
“The presence of all three comorbidities among overweight or obese persons was associated with more days of hospitalization, more visits to the emergency room and medical providers, and a generally poorer quality of life,” NCCI stated.
Duke University Medical Center researchers observed “dramatic” workers’ compensation-related differences between people with normal BMIs and those with BMIs in the obese range, NCCI said. “For example:
- Claims: Morbidly obese workers filed 45 percent more claims than workers with a normal BMI. The differential was 21 percent for workers in the Class I obese range (BMI of 30-34.9) and just 9 percent for those classified as overweight (BMI of 25-29.9).
- Lost Workdays: Morbidly obese workers had eight times the number of lost workdays versus workers with normal BMIs . Those classified as overweight or Class I obese had roughly 3.5 times as many lost workdays.
- Medical Claim Costs: Morbidly obese workers had 5.4 times the medical claims costs versus normal BMI workers. The differential was a bit less than two times for Class I obese workers and 1.5 times for overweight workers.
- Indemnity Claim Costs: Morbidly obese workers had nearly eight times more indemnity claims costs than normal sized workers. The differential was nearly three times for those with BMIs in the Class I range, and nearly twice for those in the overweight range.”
The Duke study also looked at BMI impacts on the body, nature of injury and occupational group. The strongest BMI relationships were seen for sprain or strain, contusion or bruise, and pain and inflammation categories. Claims caused by lifting, falls and slips, and exertion had the largest BMI effects, NCCI said. Persons in physically demanding jobs, such as skilled craft workers, also tended to have higher BMI-related effects than those in lower-risk occupations.
In a Johns Hopkins Bloomberg School of Public Health study, researchers found that the odds of injury for workers who were morbidly obese (in the highest obesity category class III) were significantly higher when compared with those with a normal BMI. The odds ratio was 2.21 for those in the highest obesity category, 1.26 for those in the overweight category, and 1.54 for those in the obesity I and II categories.
“When data was examined by body part injured, the analysis showed that a substantially higher portion of injuries occurred to the hand, wrist and finger among employees in the highest obesity group,” NCCI said.
In a California Department of Health Services study, obesity (BMI of 30 or higher) resulted in nearly $18 million in increased direct workers’ compensation costs per year (measured in year 2000 dollars) and nearly $71 million in indirect costs.
The NCCI is conducting its own study on the effects of obesity on the cost of medical claims. The study is expected to be available in early 2010, but preliminary results indicate:
- Obese claims are about three times more expensive at the 12-month maturity, and five times more at the 60-month maturity.
- Added treatments related to obesity can balloon cost differences by as much as 30 times or more in a claim.
- The percentage effect of obesity on claim costs is lower in states where mandatory utilization review and mandatory bill review stipulations are in place.
“Obesity and its related effects have markedly increased the costs to the workers’ compensation system, especially in terms of indemnity and medical severity (i.e. cost per claim),” NCCI said. “Unfortunately, the continued increase in obesity rates — in the face of substantial mitigation efforts by both government and business — suggests that the issues relating to obesity will continue to be a major issue well into the future.”
“Because obesity is trending upward, it will no doubt contribute to additional workers’ compensation costs,” said Harry Shuford, practice leader and chief economist for NCCI. “… But at this present time, there’s not much the workers’ compensation insurance industry can do. Changing the trend in obesity relates to the decision of wellness programs and lifestyle. And [in my opinion I] believe it’s inappropriate for a workers’ compensation insurance company to have an opinion on people’s lifestyles.”
For more information, visit www.ncci.com.
2007 State Obesity Rates
Source: CDC. (For this chart, obese is defined as greater than or equal to a BMI of 30.)
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