Obesity-related Costs Measured and Reported by Business Sector

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Study shows obesity cost $3.55 per member per month (PMPM) for men and $5.71 for women

Obesity as a major cause of death in the U.S. may still be in dispute, but one thing is certain: it costs American employers millions of dollars each year in higher employee health costs.

In the wake of recent studies disputing the Centers for Disease Control and Prevention’s earlier finding that obesity causes 400,000 deaths a year, a new study published in the March Journal of Occupational and Environmental Medicine (http://www.newswise.com/articles/view/518830/) finds obesity is responsible for 2.1 percent of all diagnosed medical claims dollars for men and 2.8 percent for women. Of ten lifestyle health risks considered, obesity was by far the most costly—accounting for approximately 14 percent of lifestyle-related health costs for men and 25 percent for women.

The study was undertaken by three researchers from Gordian Health Solutions, Inc., the leading national provider of population health management services headquartered in Nashville, Tenn. Authors D. Adam Long, PhD, Roger Reed, FNP, PA, BSN, RN and Gregg Lehman, PhD used Gordian’s proprietary retrospective claims analysis (RCA) process to estimate obesity costs. The sophisticated analysis considered more than 1,600 diagnosis codes related to 10 different lifestyle health risks—although not double-counting cost-estimates related to multiple risks--compared to just four to nine specific diseases that are typically considered in epidemiologically-based cost-of-illness studies.

“Obesity-related expenses mirror total medical expenses in their rise with age (peaking around $12 per member per month at ages 55-64), Long said. “However, women’s obesity related costs are, on average, 161% that of men’s. Moreover, as a proportion of all lifestyle related costs, obesity costs for women tend to spike in childbearing and menopausal years.”

While employers have shown interest in national and global health care costs and drivers of health care costs, understanding their own health care costs as it relates to the "the national cost of obesity" has not been as easy.

The study, for the first time, benchmarked obesity related expenses by business sector and by age and gender, providing hard data for making the case for population health management initiatives with their captive employee/member bases.            

“Employers want information they can use and take action on. They also want to understand how they compare to their peers in their own market segments. This paper for the first time addresses those concerns - it brings evaluation of the cost of obesity down to the employer sector level,” Reed said.

The ability to gather data is important to employers, but historically they have not been able to look at data which shows, for example, that the highest obesity-related costs from employees and their dependants are in the health care sector, while the lowest are in the finance/consulting sector.

“This study brings the problem of obesity straight to employers, who shoulder most of the cost for the nation’s high rate of obesity,” Long said. “It clearly underscores the need for weight management programs as a cost-saving step within employer health benefit plans.”

The researchers analyzed five years' worth of data from 61 employer health plans to estimate diagnosed claims-level medical costs attributable to obesity. The new study is first in a planned series on the costs associated with lifestyle-related health risk factors.

When total costs to the health plan were analyzed, obesity cost $3.55 per member per month (PMPM) for men and $5.71 for women. Since these figures did not include all prescription drug costs, the true PMPM cost was likely even higher.

“These cost estimates are conservative, yet still represent millions that could be saved every year in employer health costs,” John Shull, chief executive officer of Gordian Health Solutions said. “Employers looking for relief from increasing medical costs should engage in population health management services now to address changes that could help employees avoid chronic disease and the obesity-related costs.”

About Gordian Health Solutions, Inc.

Gordian is a national population health management company based in Nashville, Tennessee. The company offers a comprehensive suite of products and services such as population health risk analysis, telephonic counseling, online products, health education hotlines, on-site health education/fitness center management and lifestyle and disease management programs. Gordian works with employers, health plans and hospitals to identify, control and manage health risk factors and their associated costs. Through targeted and tailored programs, and sophisticated tracking, monitoring and reporting capabilities, Gordian works with clients to measure program progress and cost savings. For more information about Gordian Heath Solutions, visit http://www.gordian-health.com.

This press release was distributed through eMediawire by Human Resources Marketer (HR Marketer: http://www.HRmarketer.com) on behalf of the company listed above.

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