The Journal of Healthcare Contracting

The Obesity Epidemic
A public policy opportunity

In 2004, obesity-related illnesses killed more Americans than tobacco, breast cancer, AIDS and fatal car accidents, to name a few. With an estimated 64 percent of Americans overweight or obese, or close to two out of three people, the myriad of associated health and economic problems is staggering. Let’s consider some of the drivers behind these startling figures. The effects of our sedentary-centered society should be of no surprise. More and more time is being spent working on the computer, watching television and playing video games. These factors coupled with labor-saving machinery and a larger reliance on cars contributes to a lack of physical activity and expanding waistlines. Our society is simply immobile, so calories are not being burned.

It has been shown that obesity and being overweight increase the risk of developing diabetes, heart disease, certain types of cancer, arthritis and depression. The most recent data available by the National Institutes of Health (NIH) states, treating these five chronic conditions cost $117 billion in 2000, ranging from missed work to physician visits. Specifically, Medicare and Medicaid programs spend $84 billion in treating these aliments. U.S. companies absorb another $12.7 billion, reports the National Business Group on Health. This is due to an array of factors, including paid sick leave, decreased productivity and increased premiums on health, life and disability insurance. Additionally, a study published this fall by researchers at Emory University and published by Health Affairs, states that obese Americans accounted for over one-quarter of the growth in healthcare spending from 1987 to 2001.

It is evident the societal costs that are associated with obesity are of epidemic proportions. Contributing to this factor is the food industry’s annual advertising and promotions budget of $33 billion. An estimated $40 billion is spent every year on a host of weight-loss gimmicks, including diet books, foods, “magic” pills and exercise programs. In an effort to recoup the costs associated with obesity-related diseases, some have turned to the legal system. A host of lawsuits have been filed against fast food restaurants and dietary supplement companies. Some consider this to be a promising societal response. However, long term, a legal strategy will not be the most prudent choice, as it will not change the course of America’s physical inactivity and poor nutrition choices.

A significant problem of U.S. health policy is that we tend to treat diseases, as opposed to preventing them. U.S. Department of Health and Human Services (HHS) Secretary Tommy Thompson captures it best, “Approximately 95 percent of the $1.4 trillion that we spend as a nation on health goes to direct medical services, while approximately 5 percent is allocated to preventing disease and promoting health. This approach is equivalent to waiting for your car to break down before you take it in for maintenance.”

Obesity’s merciless growth rate, skyrocketing annual costs and backsliding effect on morbidity and mortality rates associated with many of its conditions have propelled this largely preventable disease to the nation’s public health’s agenda. Over the past couple of years, an assortment of legislative proposals detailing preventable treatments were discussed in Congress, ranging from school-based physical education programs and media campaigns, to state and federal-sponsored nutrition and food assistance programs and weight management services. Additionally, in recent years, NIH has sought funding for obesity research and, most recently, requested $440.3 million for fiscal year 2005.

A paramount decision came in July 2004, when Secretary Thompson announced a new Medicare coverage policy that would remove language in the Medicare Coverage Issues Manual stating that obesity was not an illness. The historic change entitles the public to request Medicare to review medical research before determining whether the federal healthcare program would cover specific obesity-related treatments. Changes in federal reimbursement policies, which drive many decisions about private insurance, are only a matter of time.

Findings of an HHS advisory panel are expected shortly, determining if Medicare will cover surgical treatments for obesity. Currently, Medicare covers gastric-bypass surgery but only as a last-resort treatment. Considering Medicare’s role in setting reimbursement policies for 41 million Americans, other public and private payers are anxiously awaiting a decision, since most don’t provide coverage for bariatric surgery. If Medicare approves payment for bariatric surgery, private insurers will be expected to similarly loosen coverage restrictions. Critics argue such a decision would add to the financial strain on the nation’s healthcare system by adding unnecessary surgeries and, ultimately, driving up premiums.

In a promising new development on Jan. 13, HHS and the Department of Agriculture jointly released revised 1980 dietary guidelines (also know as the food pyramid) emphasizing weight loss, in addition to healthy eating and cardiovascular health. The guidelines are updated every five years by a Congressional mandate but, for the first time, it stresses regular exercise, a top prevention for many obesity-related diseases. Fortunately, other preventative initiatives are also under policy consideration.

By redirecting pennies of the current healthcare dollar toward the prevention of obesity, especially in children, it has become the view of many leading health policy experts that quantum leaps in improvements in the health status for 25 percent of the U.S. population are possible. Not all opportunities for improvements in health status are high tech and inordinately costly. Redirecting resources in healthcare regarding the prevention of obesity requires tough policy choices, but it is not hatefully expensive to achieve as a society if placed in the proper context.

About the author:
Robert Betz, Ph.D., is president of Robert Betz Associates, Inc. (RBA), an established federal healthcare policy consulting firm located in the Washington, D.C., area. Additionally, he serves as president and CEO of the Health Industry Group Purchasing Association (HIGPA) and executive director of the American Association of Eye and Ear Hospitals (AAEEH). Betz is also an adjunct professor at The George Washington University, specializing in political science and health policy. For more information about RBA, visit www.robertbetz.com. Carolyn M. Hickey was a contributing author to this article.