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May 2007

APRIL REVENUE (IN MILLIONS):  SALES TAX: $1,743.8  OIL PRODUCTION: $68.6  NATURAL GAS: $145.5  MOTOR FUELS: $267.6
MOTOR VEHICLE SALES: $288.6  TOBACCO: $158.0

Weighing the Costs:
Obesity Affects the Work Force
The Phrase "Everything's Bigger in Texas" Has an Ironic Ring Now that Nearly Two-Thirds of All Texans are Overweight or Obese

A new report from the Texas Comptroller's office, Counting Costs and Calories: Measuring the Cost of Obesity to Texas Employers, examines the economic costs generated by our rapidly expanding waistlines.

"Nearly two-thirds of our state's adult population is currently overweight or obese, and because of the alarming rise in obesity, we decided to communicate what stake Texas businesses have in stemming the obesity crisis," said Comptroller Susan Combs. "The costs are shocking, and the future could be very grim if we don't take action now to reverse this trend. The rise in obesity is avoidable-not inevitable-but we must take action now."

Obesity is one of the most common and most severe health risks Texans face. Being overweight or obese puts you at a significantly greater risk of illnesses such as diabetes, heart disease, hypertension, stroke, arthritis, asthma and certain cancers.

But these private tragedies have a public cost as well. That cost weighs heavily on Texas' businesses, which must cope with spiraling insurance rates and losing money whenever workers are out sick, disabled or simply not functioning up to standard.

Counting Costs and Calories estimates that obesity cost Texas businesses $3.3 billion in 2005, a figure that includes the costs of health care, absenteeism, decreased productivity and disability. And those costs are likely to rise if Texans don't act.

A Spreading Epidemic

Health care experts define excessive weight and obesity primarily by means of the Body Mass Index, or BMI, a ratio calculated by dividing a person's weight in kilograms by his or her height in meters squared. People can be categorized as being underweight, at a normal weight, overweight or obese depending on their BMI.

Text Alternative for Obesity Prevalence Trends in Texas Adults 1990 to 2005

According to data compiled by the U.S. Centers for Disease Control and Prevention (CDC), the share of Texans at a normal weight has plunged in recent years. CDC reports that 12.3 percent of adult Texans were obese in 1990, while 57.1 percent were at a normal weight. By 2005, 27 percent of Texans were obese and only 35.9 percent were at a normal weight.

In 1990, there were 1.5 million obese Texas adults, while in 2005 there were 4.5 million, a nearly 200 percent increase over 15 years. Sadly, the epidemic begins early. A study of Texas children conducted by the UT Houston School of Public Health estimated that 42 percent of the state's fourth graders were overweight or at-risk of overweight.

And overweight children are likely to remain that way. The U.S. Surgeon General has reported that 70 percent of overweight children will become overweight or obese adults.

Overweight Around the State

The majority of adult Texans, men and women alike, are overweight or obese, according to CDC. This is equally true for all ethnic groups and every category of income and educational attainment.

Text Alternative for Projected Adult Obesity Trends in Texas 1990-2025

But some variations can be seen in the pattern. For example, the older you are, the more likely you are to be overweight. In 2005, more than half (53.3 percent) of Texans aged 18 to 29 were overweight or obese, as were 67.3 percent of those aged 30 to 44. Those 45 to 64 were heavier still; 71.3 percent were overweight or obese.

And the more educated you are, the less likely you are to be overweight. In 2005, 67.8 percent of adult Texans with no high school diploma were overweight or obese, versus 59.9 percent of college graduates.

Where you live also plays a role. The Austin-Round Rock metropolitan statistical area (MSA) was the state's "skinniest" in 2005, with "only" 55.1 percent of its adults being overweight or obese; the San Antonio MSA, by contrast, was the least healthy, with 66.4 percent of its adults overweight or obese.

Ethnicity matters, too. In 2005, Anglo Texans were thinnest, and even then 60.1 percent were overweight or obese. Seventy-one percent of Hispanics were overweight or obese, as were 75.7 percent of African-Americans.

Weighing and Paying

The costs of employee obesity and related illnesses are rising sharply. Businesses feel a disproportionate effect in part because most Texas adults with private insurance-nearly nine out of every 10-receive coverage from their employers.

Text Alternative for Costs to Private Businesses and Insurers Attributable to Obesity (in billions)

According to Counting Costs and Calories, the cost of health insurance rose at double-digit rates from 2001 to 2004. Obesity may be one of the largest contributing causes behind these increases; a 2002 study reported in the journal Health Affairs found obesity played a greater role in rising health care spending than either smoking or drinking.

The Comptroller estimates that obesity and related illnesses cost employers $1.4 billion in health care costs in 2005.

Obese employees also cost their companies through greater absenteeism, short-term disabilities and reduced efficiency at work. The Comptroller estimates these factors cost employers more than $1.9 billion in 2005.

In all, obesity and related problems cost private employers an estimated $3.3 billion in 2005.

Projecting these costs and accounting for the current increase in the prevalence of obesity and the projected increase in the working population, obesity could cost Texas businesses $15.8 billion annually by 2025.

Fight Flab, Save Money

If there's a silver lining to this grim picture, it's that Texas' business leaders and policymakers are taking steps to rein in the epidemic. Counting Costs and Calories details a number of initiatives aimed at improving Texans' health and cutting the costs of obesity.

The 2007 Texas Legislature introduced legislation aimed at instituting more physical education in public schools. Many school districts have removed fattening foods with minimal nutritional value from cafeterias and vending machines.

And many Texas companies are shifting their health care focus from disease treatment to prevention in an effort to reduce future insurance costs.

The most successful of these programs offer financial incentives to employees, such as lower insurance deductibles or company-paid gym fees, as well as other initiatives designed to encourage healthy lifestyles. Most such programs take from three to five years to show a return on investment, but the returns can be significant when they materialize.

Ultimately, only the individual can be held accountable for his or her lifestyle choices. But employers can promote wellness and provide workers with incentives and opportunities to make healthy choices in life.

Download and view Counting Costs and Calories: Measuring the Cost of Obesity to Texas Employers at www.window.state.tx.us/specialrpt/obesitycost/.

Bruce Wright

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