The Truven Health Blog

The latest healthcare topics from a trusted, proven, and unbiased source.

An Overwieght US Workforce Costs Employers

By Jill Faulkner Bogdan/Monday, November 21, 2011
A recent Thomson Reuters press release identified an overweight and obese workforce as having the largest impact on employer health care spending. The Thomson Reuters Workforce Wellness Indextakes into account each year how body mass index, blood pressure, cholesterol, blood glucose, tobacco use and alcohol use influence employer healthcare spending.  Unhealthy behaviors among the US workforce cost employers a total of $623 each year, costs linked to obesity account for nearly 70% of that expenditure. Medical costs associated with obesity were reported as costing employers $425 per employee annually in 2010.
But despite the ever present goal to reduce health care costs for employers and employees alike, statistical data from over the years indicates that pant sizes won’t be the only thing going up if we continue on our current trajectory. A graph included in theCDC obesity trend report shows a steady increase in the obesity population since the late 1980’s. In 2007, the CDC reported that 34% of the American population over the age of 20 suffered from obesity. Respectively, Mississippi, South Carolina, Kentucky, Louisiana, and Michigan top the list of the most obese states in 2010, all weighing in with over 30% of the total state population suffering from some form of obesity. Raymond Fabius, chief medical officer of Thomson Reuters, is quoted in the press release, “Obesity continues to be a prevailing problem, one that will continue to plague employers and insurers alike until we find a way to stem this epidemic.”
In a feeble attempt to stop the progress of what is widely considered an obesity epidemic, the government has set a national goal to lower the percentage of obese individuals in each state to under 15%.  As of 2010, even the state with the lowest obesity percentage, Colorado, missed the mark by 6%.
It appears that cutting health care costs may be as simple as shedding a few pounds…

Employers Cut Coverage as Healthcare Costs Climb

By Jill Faulkner Bogdan/Monday, November 7, 2011
Wal-Mart Stores Inc. announced a cut in health insurance benefits on Friday, October 21st, according to by Reuters’ journalist, Jessica Wohl. Wal-Mart will be joining the ranks of Wells Fargo & Co. and General Electric, who have also announced upcoming cuts to their employee health care benefits in 2012.
Walmart image
As the United States largest private employer, Wal-Mart employs 1.4 million people in the United States and insures more than 1 million employees and their families. The benefit reduction as laid out in the original article on Reuters.com, will only affect new, part time employees (working less than 24 hours per week) and workers that admittedly use tobacco. Part time employees (working less than 24 hours per week) will no longer be eligible for corporate insurance benefits with Wal-Mart and tobacco users will be looking at higher costs (basic plans will cost tobacco users $25 per pay period while non-tobacco users would pay only $15 per pay period).
In light of a separate article published by Reuters fromEntrepenaurer.com, corporate insurance hikes should come as no surprise. In late September, Reuters chronicled the results of an annual healthcare survey by the Kaiser Family Foundation and the Health Research and Education Trust. According to the survey, the average annual premium for family coverage sponsored by an employer rose 9% from 2010 to 2011 and individual plans of a similar nature rose by 8% from 2010 to 2011. Over the course of the last ten years, there has been a 134% increase in the cost of health care premiums.
In a statement from Wal-Mart spokesman Greg Rossiter, he looks to the United States government to ease the burden of increasing healthcare costs, “Our country needs to find a way to reduce the cost of healthcare, particularly in this economy.” However, according to some small business owners, some of the new health care laws are actually creating the dramatic increases in healthcare costs. According to the study by the Kaiser Foundation and the Health Research and Education Trust, 1.5 percentage points of the 9% increase in healthcare premiums can be retraced to elements of health care laws.
While it remains to be seen how many other businesses or corporations may or may not be cutting healthcare benefits in 2012, a survey conducted by Mercer projects only 5.4% increase in health benefits costs for 2012.