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Obesity costs U.S. companies
Report: Costs as much as $45 billion
NEW YORK -- The 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 new report from The Conference Board. Thirty-four 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.
In a 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.
"Employers 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:
-- Obesity 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.
-- Estimates 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.
-- Employers 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
company.
-- 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 are unlikely to recoup surgery costs before these employees
have left for other jobs.
-- How 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.
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