Obesity Costs U.S. Companies as Much as $45 Billion a Year
KANSAS CITY (kansascityfrontpage.com), April 14, 2008 - 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. 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.
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. The report was featured today on Marketplace, public radio's popular business program.
"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.
The 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.
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Workers Show Record Drop in Retirement Confidence, Health Care and Economy Are Major Concerns
KANSAS CITY (PRNewswire), April 14, 2008 - Reflecting the growing concern over health care costs and economic issues, American workers' confidence in being able to afford a comfortable retirement decreased over the past year by a rate unmatched in the 18 years of the Retirement Confidence Survey(R)(RCS), according to results released today.
The percentage of workers very confident about having enough money for a comfortable retirement decreased sharply, from 27 percent in 2007 to 18 percent in 2008, the biggest one-year drop in the 18-year history of the survey. Retiree confidence in having a financially secure retirement also decreased, from 41 percent to 29 percent, a drop of 12 percentage points. Decreases in confidence occurred across all age groups and income levels but was particularly acute among younger workers and those with lower income.
RCS results indicate health costs in particular have become a big concern for retirees: Among retirees who left the work force earlier than planned, more than half (54 percent) say they did so because of health problems or disability. Almost half of retirees (44 percent) say they have spent more than expected on health care expenses. More than half of retirees (54 percent) say they are now more concerned about their financial future than they were right after they retired, a 14 percentage-point increase from a year ago (40 percent in 2007).
"In the nearly two decades we have been conducting the RCS, this year's results show a very dramatic reduction in the public's confidence about having a comfortable retirement. The economy and health costs are major concerns," said Dallas Salisbury, president of the nonpartisan Employee Benefit Research Institute (EBRI), which conducted the survey with Mathew Greenwald & Associates. "If there is a silver lining, it's that Americans finally may be waking up to the realities of being able to afford retirement."
In addition, the survey found that about half of workers (47 percent) say they and/or their spouse have tried to calculate how much money they will need for a comfortable retirement, up considerably from the low point of 29 percent measured in 1996. As before, the 2008 survey finds that doing a retirement savings calculation is particularly effective at changing worker behavior: 44 percent who calculated a goal changed their retirement planning, and of those almost two-thirds (59 percent) started saving or investing more.
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U.S. High-Tech Industry Adds Jobs for Third Year in a Row
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