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Fiscal Notes

Fiscal Notes

A Review of the Texas Economy from the Office of Susan Combs, Texas Comptroller of Public Accounts · July 2011

Gaining Costs, Losing Time

Costs Growing Along with Waistlines

“An obese and unhealthy work force may be viewed as a huge negative when businesses consider the pros and cons of moving their operations to Texas.”

— Comptroller Susan Combs

By Mark Wangrin

Obesity continues to cost Texas billions of dollars annually, and the tab is skyrocketing, according to a recent follow-up to a landmark 2007 report from the Comptroller’s office.

Gaining Costs, Losing Time: The Obesity Crisis in Texas, issued in February 2011, builds on the research reported in Counting Costs and Calories, which first drew national attention to the potentially crippling economic effects of unchecked obesity.

Like the previous report, Gaining Costs, Losing Time focuses on the cost of obesity to Texas employers. And the updated data show that the crisis is gaining momentum.

Overweight Nation

Data from the Centers for Disease Control and Prevention (CDC) show that, while obesity is a nationwide problem, its incidence varies considerably from state to state. In 2009, Texas fell into CDC’s second-worst category, for states with obesity rates of 25 to 29 percent. Nine states (those in dark red) fared even worse, with 30 percent or more of their residents clinically obese.

refer to notes

Obesity costs to Texas employers reached
$9.5
Billion
in 2009

In 2009,
Two Thirds
(66.7 PERCENT)
of Texans were
OVERWEIGHT
or clinically
OBESE.

Obesity Costs

Obesity is a national crisis, of course. U.S. health care costs related to obesity have doubled in less than a decade and account for 9.1 percent of annual health costs, or $147 billion.

But Texas, unfortunately, suffers disproportionately.

In 2009, more than two-thirds (66.7 percent) of Texans were overweight or clinically obese, compared with 63.2 percent nationally. About 29.5 percent of Texans were clinically obese. And the prevalence of obesity among Texas adults more than doubled in the last two decades, from 12.3 percent in 1990.

Portion Sizes

1982

8 ounces 45 calories
(with sugar)

2002

16 ounces
350 calories
(with mocha syrup)

Portion sizes for many common food and drink purchases have increased greatly in recent years.

Obesity Prevalence Trends in Texas Adults, 1990-2009

In Texas, our share of adults who are obese more than doubled from 12.3 percent to 29.5 percent. According to the CDC, U.S. adult obesity rates rose from 11.6 percent in 1990 to 27.1 percent in 2009.

refer to notes

Source: U.S. Centers for Disease Control and Prevention

The resulting costs to Texas employers reached $9.5 billion in 2009, due to direct health insurance expenditures as well as absenteeism, reduced productivity at work and disability.

Total Projected Obesity Costs to Texas Businesses, 2009-2030 (in billions)

If obesity rates and the Texas work force continue to increase as expected, these direct costs could reach nearly $32.5 billion in 2030. The total estimate includes cost burdens beyond just direct health care costs.

see obesity notes

Texas
Business costs
(by area)
Attributable
to Obesity,
2009

Obesity imposes costs on business ranging from direct health care expenditures to the more subtle effect of reduced efficiency while at work, or “presenteeism.” The Comptroller estimates that these direct and indirect costs totaled nearly $9.5 billion in 2009.

Area of CostsEstimated CostsPercent
Health care
$4,022,324,92942.5%
Absenteeism
$1,643,955,36317.4%
Presenteeism
$3,469,229,33336.7%
Disability
$321,813,7193.4%
Total Costs
$9,457,323,345100.0%

Source: Texas Comptroller of Public Accounts.

The next generation of Texas workers will be affected as well. Today, 20.4 percent of Texas children aged 10 to 17 are obese, 4 percent more than the national average. If current trends continue unchecked, by 2030 an estimated 36.4 percent of Texans will be overweight and 36.7 percent will be clinically obese. The effects on worker health could cost the state’s businesses $32.5 billion annually.

Excessive weight also carries significant costs for the individual. Children who stay obese through adulthood can expect the condition to cost them thousands over their lifetimes for obesity-related reasons such as disease, lower wages, diet plans and the wage loss inherent in shorter lifespans.

The Cost to A Child

Obesity is rising faster in children than adults. According to the U.S. Centers for Disease Control and Prevention, the rate of obesity among U.S. children aged six to 11 tripled from 1980 to 2008, from 6.5 percent to 19.6 percent. Among adolescents aged 12 to 19, obesity rates rose even faster, from 5.0 percent to 18.1 percent.

·

Excessive weight puts children at risk of type 2 diabetes, high blood pressure, gallbladder disease, depression, anxiety and lower self-esteem, while increasing their risk of chronic disease in adulthood.

·

The 2007 National Survey of Children’s Health (NSCH) found that 20.4 percent of Texas children aged 10 to 17 were obese, compared with 16.4 percent for all U.S. children.

·

According to successive editions of the NSCH, between 2003 and 2007 the number of states with childhood obesity rates at or above 18 percent doubled, from six states to 12 in 2007.

SLIMMING Down

While Gaining Costs, Losing Time details problems and costs, it also offers a series of policy recommendations as solutions, including:

  • returning physical education as a high school graduation requirement and making it mandatory in all semesters of of middle school;
  • adding nutrition courses to the public school curriculum;
  • limiting or eliminating the eligibility of soft drinks, candy, cookies and ice cream from the Supplemental Nutrition Assistance Program (formerly known as “food stamps”);
  • offering a $1,000 federal tax credit to Americans who pass an annual wellness exam and physical; and
  • encouraging restaurants to list nutrition information on menus.

The report also includes sections on the demographics of obesity in Texas, factors contributing to obesity and the value of worksite wellness programs, which can reduce business heath care expenditures and absenteeism costs by 25 to 30 percent.

·

And an unfit work force ultimately may harm Texas’ reputation as a great place to do business, according to Comptroller Susan Combs.

“Today, businesses want to come to Texas because we’re seen as a great place for them to operate and grow,” Combs says. “An obese and unhealthy work force may be viewed as a huge negative when businesses consider the pros and cons of moving their operations to Texas.” FN

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