Management Report: Obesity Costs U.S. Companies as Much as $45 Billion a Year
rate of obesity in the United States has doubled in the last 30 years,
and those extra pounds weigh on companies’ bottom lines,
according to a report by the Conference Board. Today, 34 percent of
American adults fit the definition of "obese." Obese employees cost
U.S. private employers an estimated $45 billion annually in medical
expenditures and work loss, the report said.
new report, "Weights and Measures: What Employers Should Know about
Obesity," The Conference Board examines the financial and ethical
questions surrounding whether, and how, U.S. companies should address
the obesity epidemic.
need to realize that obesity is not solely a health and wellness
issue," says Labor Economist Linda Barrington, research director of The
Conference Board Management Excellence Program and co-author of the
report. "Employees’ obesity-related health problems in the United
States are costing companies billions of dollars each year in medical
coverage and absenteeism. Employers need to pay attention to their
workers’ weights, for the good of the bottom line, as well as the
good of the employees and of society."
Among the report’s findings:
is associated with a 36-percent increase in spending on healthcare
services, more than smoking or problem drinking. More than 40 percent
of U.S. companies have implemented obesity-reduction programs, and 24
percent more said they plan to do so in 2008.
of ROI for wellness programs range from zero to $5 per $1 invested. ROI
aside, these programs may give companies an edge in recruiting and
retaining desirable employees. Meanwhile, some say it may be more
effective just to award employees cash and prizes for weight loss
rather than devote resources to long-term wellness programs.
need to weigh the risks of being too intrusive in managing obese
employees against the risks of not managing them. There is evidence
that as weight goes up, wages go down. Employers should be fully aware
of any potential discrimination risk before addressing employees’
weight, whether for the employee’s own good or that of the
jury is still out on the costs and benefits of paying for
employees’ weight-loss surgeries. While obese employees medically
eligible for bariatric surgery (about 9 percent of the workforce) have
sharply higher obesity-related medical costs and absenteeism, some say
companies areunlikely to recoup surgery costs before these employees
have left for other jobs.
employers communicate a wellness or weight-loss program is as important
as how they design it. Companies should involve employees in planning
health initiatives, rather than working from the top-down, and should
make sure personal privacy is protected.
report includes three case studies: Public Service Enterprise Group
(PSEG), a large self-insured utility with high BMI and low turnover,
targets obesity as a major plank in its multifaceted wellness
initiatives. H-E-B, a Texas-based retail chain, believes retail’s
high turnover can make it all the more important to catch employees,
from checkout clerks to executives, under the wellness umbrella. And
Aetna Inc. says that adding incentives increased participation in its
wellness programs and produced major savings.
Source: Weights and Measures: What Employers Should Know about Obesity
For more information on The Conference Board, visit www.conference-board.org.