Growing Waistlines Costing Economy in Large Proportions

Measurements of the cost of obesity to the U.S. economy, as well as the workers’ compensation system are growing, becoming an “epidemic,” according to recent research.

The studies show that the total economic cost of an overweight and obese population in the United States and Canada approaches $300 billion per year, with 90 percent of the total — $270 billion — attributed to the United States. Furthermore, a workers’ compensation claim with an obese diagnosis can be 30 times to 60 times more expensive than a comparable claim incurred by a non-obese person.

The Society of Actuaries (SOA) recently looked at the economic costs of overweight (body mass index between 25.0 — 29.9) and obesity (BMI of more than 30) caused by increased need for medical care, and loss of economic productivity resulting from excess mortality and disability.

In the study, the SOA also divided the $300 billion finding into specific causes of economic costs. The Society broke down the figure into the following economic costs per year:

• Total cost of excess medical care caused by overweight and obesity: $127 billion
• Economic loss of productivity caused by excess mortality: $49 billion
• Economic loss of productivity caused by disability for active workers : $43 billion
• Economic loss of productivity caused by overweight or obesity for totally disabled workers: $72 billion

Researchers and actuaries Don Behan and Sam Cox reviewed nearly 500 research articles on obesity and its relation to mortality and morbidity, focusing primarily on papers published from January 1980 to June 2009.

“We found substantial evidence that overweight and obesity are becoming worldwide epidemics, and are having negative impacts on health and mortality,” said actuary Don Behan, an independent consulting actuary. “As actuaries, we are working with the insurance industry to help incentivize consumers through their health plan design to focus on health and wellness, which will hopefully help curb the weight and health problems we face today.”

Going one step further, the SOA broke out the economic cost of overweight versus obesity for the United States and for Canada. Dividing up the $270 billion economic cost in the United States, obesity cost the U.S. economy $198 billion and being overweight cost $72 billion in 2009.

The SOA said it also uncovered, through an online survey of 1,000 Americans 18 years and older, that the majority of consumers (83 percent) would be willing to follow a healthy lifestyle, such as participating in a health and wellness program, if provided incentives through their health plan.

Meanwhile, the National Council on Compensation Insurance Inc. found that:

• Twelve months after the date of an employee injury, the aggregate medical costs of obese claims were three times greater than the comparable costs of the matched non-obese claims;
• Medical costs of the obese claims continued to grow at a faster pace than the non-obese; at 36 months they were four times more costly, and by 60 months the difference was more than five times greater.
• Claims of injured obese workers, on average, cost more than claims of matched injured non-obese workers. Moreover, the spreads typically appears to be greater for those diagnoses with higher shares of permanent partial injuries; that is, obese workers tend to require more costly medical treatment than do matched non-obese workers across virtually all diagnoses and injury types.

The dramatically higher medical costs suggest that the types and nature of injuries sustained by obese workers, especially the “morbidly obese,” are more likely to result in permanent disabilities, NCCI said. Furthermore, there is greater risk that injuries will create permanent disabilities if the injured worker is obese.

For its report, NCCI sampled more than 7,000 claims with “obesity” as a secondary diagnosis and another 20,000 claims with virtually identical characteristics — primary diagnosis, gender, industry group, year of injury, state, and approximate age — but no obesity diagnosis. For the case studies examined, treatment categories that tended to be the primary cost drivers included physical therapy, complex surgery, and drugs and supplies, NCCI said.

“The implications [of obesity] on workers’ compensation are disturbing,” NCCI said.

Overweight and obesity have been shown to increase the rate of several common adverse medical conditions, resulting in this extraordinary economic cost to society,” Behan added. “We can’t stand back and ignore the fact that overweight and obesity are drivers of cost increases and detrimental economic effects. It’s time for actuaries, the employer community and the insurance industry to take action and help consumers make smart, healthy decisions.”

Topics USA Claims Workers' Compensation