Financial Impact - Lesson 2
$8.65 BILLION! Obesity attributed absenteeism among American workers cost the nation an estimated $8.65 billion per year in 2012.
A number of studies have measured the impact on employer health care expenditures due to an increase of US employees who are overweight or have obesity. On top of that, researchers have demonstrated the association of BMI with absenteeism and presenteeism, as well as WC costs related to injuries and illnesses.
Aside from the obvious health related cost that are likely to be associated with obesity. There’s a lot more indirect cost caused by obesity. Obesity has been cited to have an enormous economical strain. With nearly two-thirds of the U.S population being overweight and one-third being obese, there is no mystery why that impact is so far reaching. Some major cost identified by researchers are as follows: direct medical cost, productivity cost, transportation cost, and human capital cost.
With the development of our society in areas such as technology and economical structure, while we’ve been extremely progressive in these areas other areas such as disease care are suffering drastically. The state of health in this country is deteriorating. By 2002 roughly 500 million people were overweight nationwide. Since 1970, rates of obesity has doubled.
Direct Medical Cost
Direct medical spending is cited as one of the most impactful on the economy. Due to the numerous conditions and diseases caused by obesity. Direct medical spending on management, diagnosis, and treatment of those conditions is predicated to increase with rising obesity levels. How are we sure the impact of direct medical cost are so alarming? Numerous studies estimate these costs, using a variety of methodologies including: cohort studies, case studies, dynamic models, nationwide representative surveys, regression analyses, and simulation forecasting. There is widespread agreement across this literature that the medical costs associated with obesity are substantial; however, there are important differences between the studies.
While this program is directed to the adult working population I believe it’s worth stating. Obesity-related medical costs occur not only in adult populations, but in children as well. The annual direct costs of childhood obesity in the US are estimated at about $14.3 billion.19,20 In addition to these immediate costs, current childhood obesity implies future direct costs given that overweight children and adolescents may become obese adults.21 These cost affect EVERYONE. Children and adults alike. If you’re a parent of an obese child it’ll cost you sooner or later. Results suggest that currently existing levels of adolescent overweight will result in close to $45 billion in direct medical costs over this period (2020 – 2050), affecting young as well as middle-aged adults. Researchers argue that these costs may be unavoidable, with currently existing technologies unable to reduce significantly the likely future consequences of current adolescent overweight.
Productivity Cost
We’ve briefly discussed absenteeism and presenteeism throughout this program. We’ll dissect those topics and more in this section. The productivity costs of obesity have been well-documented in a variety of studies, with widespread consensus that such costs are substantial, but with important differences in magnitude between the individual estimates. We’re going to discuss the direct impact of obesity and the cost associated due to obesity. Just because you’re “doing your job” doesn’t mean you’re doing it to the best of your abilities.
Absenteeism:
‘Absenteeism’ (first-order productivity costs due to employees being absent from work for obesity-related health reasons). Absenteeism is quite easy to track. The largest category of productivity cost is attributed to absenteeism. Despite the variations in methodologies, studies consistently found a correlation between obesity and higher rates of absenteeism.
Studies:
Researchers utilized the National Health and Nutrition Survey database of the US civilian, non institutionalized population to study obesity and absenteeism. The authors reported that obesity was associated with a significant increase in lost workdays. Interestingly, obesity was found to account for 6.5% to 12.6% of total costs of absenteeism in the workplace, with results almost identical to the data on obesity in health care expenditures. Researchers: Andreyeva Et Al.
Researchers also reported a J-shaped association with BMI and a variety of metrics including health care expenditures, sick days, WC (Workers Compensation) , and STD (Short-term Disability) absences. They studied 29,699 employees from a variety of employers who had HRA data linked to their health claims and productivity data. Normal-weight employees cost an average of $3,830 per year in combined medical, sick days, STD, and WC claims whereas employees with a BMI > 40 kg/m2 cost more than double that amount ($8,067) in 2011 dollars. The nadir of health care costs and lost productivity was associated with a BMI of 25 kg/m2. Researchers: Van Nuys et al.
Studies also revealed an indirect association between excess body weight and workplace safety.40 Rates of WC claims were twice as high, medical claims costs seven times higher, and indemnity claim costs 11 times higher among the heaviest employees vs employees of average weight.15 Compared with normal-weight employees, those with a higher BMI requested more WC days: 2.92 versus 8.59.12
Obesity among workers has adverse occupation-related consequences (work absence, impairment, limitation, and workplace injury) and increased health care and disability costs. Between a BMI of 25 and 45 kg/m2, medical and drug costs increased $119.7 and $82.6 per BMI unit increase adjusted for age and gender.11 Estimated mean annual per capita health care expenses attributable to obesity are $1160 for men and $1525 for women.44 Workers who were obese had more than double the work limitation of those who were of normal weight.16