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As the federal government rang in a new year trying to figure out how best to dole out a $700 billion safety net, American businesses were embroiled in an ongoing bailout of their own. In a super-sized nation where nearly 70% of the population is overweight - 35% obesely so - U.S. businesses are picking up the tab when it comes to being fat. The financial costs of obesity are drawing streams of research with one of the most recent coming last September, and showing that businesses can fight back.
As the federal government rang in a new year trying to figure out how best to dole out a $700 billion safety net, American businesses were embroiled in an ongoing bailout of their own.
In a super-sized nation where nearly 70% of the population is overweight - 35% obesely so - U.S. businesses are picking up the tab when it comes to being fat.
The Henry J. Kaiser Foundation estimates that health care spending in the U.S. topped $2.8 trillion in 2008, an average of $7,868 per person.
The financial costs of obesity are drawing streams of research with one of the most recent coming last September, and showing that businesses can fight back.
A program to reduce weight and improve health risk factors in obese employees produced a short-term return on investment of $1.17 for every dollar spent, according to a study in the September Journal of Occupational and Environmental Medicine.
LuAnn Heinen is vice president of National Business Group on Health and executive director of the Institute on the Cost and Health Effects of Obesity. She says, compared to five years ago, employees are paying 64% more in health care costs; and employers, a staggering 78% more.
In corporate circles, rising health care costs fall under the term of population health management. Heinen says it plays directly into profit management, as well.
"It's not like any one company has any hope of escaping this," she says. "Two-thirds of our population is challenged by this, and it has a lot to do with genes and things that are out of individual control."
Boardrooms battle the bulge
The overall weight of a company's employees can be seen on the balance sheet.
Heinen says one Fortune 500 CEO admitted a $0.19 drop in earnings per share due to health care expenses exceeding the budget.
It was during a shareholder meeting in 2005 that General Motors CEO Rick Wagoner announced the cost of health care benefits tacked on $1,500 to the price of every new GM car.
GM's health care coverage is famous in the industry, with salaried employees paying 27% of their health care costs, and union workers picking up just 7% with zero-deductible, no-monthly-premium plans that have low copays for doctor visits and prescriptions.
Those costs keep rising for GM and every other company.
Nationally, 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 The Conference Board, a nonprofit group that analyzes trends in business.
It reports that obese employees cost U.S. private employers an estimated $45 billion annually in medical expenditures and work loss.
In the report, "Weights and Measures: What Employers Should Know about Obesity," The Conference Board noted that obesity is associated with a 36% increase in spending on health care services, more than smoking or problem drinking. More than 40% of U.S. companies have implemented obesity-reduction programs, and estimates of ROI for wellness programs range from zero to $5 per $1 invested.
Fat like us
Pam Troup is executive director of Saints Occupational Health Clinic. The St. Anthony program helps businesses and its employees get on a healthy path.
She says the problem of weight is becoming so pervasive that it's getting to the point where hiring managers are nipping it in the bud before it becomes a problem.
"That's discrimination, but I absolutely think it enters into it," Troup says of overweight applicants.
The subject of weight has largely remained a personal issue until it started affecting businesses.
Oklahoma City Mayor Mick Cornett, who put the city on a diet in 2008 after it ate its way onto the top 10 fattest cities list, says being known for being porcine is a strain on the economy.
As a company looking to locate in Oklahoma City, "I'm going to wonder what my health care costs are going to be and what my absenteeism rate is going to be. We need to address that for those reasons," Cornett says. "You cannot be on those obesity lists and think that's not going to have an impact on your ability to create jobs. It's about the cost of doing business and the ease of doing business. That's what job creators are looking for."
With some local businesses reporting spending $10,000 or more on an employee's health care, Cornett says the girth of the state's workforce is glaring.
Paula Price is director of health promotion and community for Norman Regional Health System. Whether it be with the health system's 2,900 employees or the communities it serves, Price stresses physical activity, tobacco cessation and losing weight.
She has a registered nurse who serves as a consultant for area businesses to help them promote health among their employees. The hospital offers a healthy business academy to help businesses develop policies that support healthy lifestyles for employees. She says Cleveland County business owners are routinely requesting help.
"They are very savvy and are beginning to understand it's crucial to the bottom line that they have healthy employees that are productive and aren't missing work," Price says. "[Obesity] is an epidemic across the country and the world. Obesity rates for the state of Oklahoma are almost approaching 70% overweight, and 30 to 35% are obese."
And businesses are taking notice.
"I think people are interested," Troup says of St. Anthony's health promotion business, which has exploded in the last 10 years. "Usually the larger companies have resources to invest in this. Like I've said before, if the person at the top wants it to happen, it will, otherwise it's probably not going to.
"I think [companies] really are trying to help their employees. The ones that are really sincere about it - yes, they want to save money - but I think they really care about their employees. I don't think there's anybody out there who says, 'I'm only doing this to save money.'"
Overweight state, skinny policy
The Oklahoma Turning Point Council - Oklahoma's statewide health initiative - traces its origins back to 1998.
"The mission is building healthy communities through partnerships," says Larry Olmstead, executive director. "Our vision is healthy communities based on the fact that communities have power to change their own health and change policy that affects health."
One of the council's most recognizable endeavors is its Certified Healthy Business Program.
But when your state is ranked near-last in most health indicators, it tends to show in public policy.
"We have no budget," Olmstead says. "I'm director of the state's Turning Point Initiative, but yet I'm the only staff person. The secretaries helped me a lot this year.
"We talk about the economy of Oklahoma being poor, but when the health of our workforce is poor, we're going to have a poor economy. You cannot attract good business when you lose productivity due to illness and injury."
The health care battle rages on for businesses, which Heinen says grasp for victories wherever they can.
"We declare a victory when we hold the line on the year-over-year average adult weight gain of a couple pounds a year," she says. "There are companies that are reporting flat BMI trends, and that's good news.
"I think it's bigger than any one sector, bigger than the corporate sector. It's a culture change that affects schools, communities and workplaces."
Mayor Mick keeping city on a diet
As a general rule, diets are about as successful as government initiatives. So when Oklahoma City Mayor Mick Cornett paired the two with his "This City Is Going on a Diet" campaign in 2008, it was a leap of faith, to say the least.
But coming into 2009, more than 24,000 Oklahomans had lost more than 250,000 pounds. It's a long way off from Cornett's goal of 1 million pounds, but the 2008 tonnage was progress.
"I'm extremely enthused," Cornett says. "My opinion is it's fantastic we have these 24,000 people that have signed up on the Web site, and we know that's a fraction of the number of people who could actually use some help. But I think it's just symbolic of a much larger cultural shift we're seeing in the community. I really sense this community has a much higher sense of the obesity problem and is more likely to be doing something about it."
Fortune Magazine took dead aim at Oklahoma City in April 2007 when it focused on the state capitol in its fattest cities in America feature.
The magazine used data from an industry research firm to show that 55% of Oklahoma City residents ate at fast food restaurants a dozen or more times a month in 2006.
Cornett campaigned on jobs and education to become Oklahoma City's mayor. The city's waistline was quickly getting in the way of the former, so more of the latter was needed.
"The word 'diet' was necessary to get people's attention," Cornett said.
With a slick, informative Web site and plenty of pub - Cornett's been on "Ellen" and featured in Men's Fitness - the government initiative has been golden.
"The reason people across the country are gravitating toward this program is because our program is working," he said. " There is no shortage of government initiatives on health care and obesity, but ours is being singled out as one that has some traction. We've had a number of communities across the country that are doing something similar."