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Appendix 1
Method To Calculate Costs

Method to Calculate Health Care Cost

Health Expenditures 2004 2005 Percent Increase
U.S.1 $1,858,888,000,000 $1,987,689,000,000 6.9%
Texas2 $106,774,000,000 $114,172,292,944 6.9%


U.S. Expenditures by Age3 Percent Health Expenditures Percent Private Insurance Percent Combined
Age (19-64) 51.4% 46.5% 23.9%
Age (65+) 36.3% 14.5% 5.3%
Total 87.7% 29.2%


Employment-Based Insurance4 Percent of Total
U.S. 59.5%
Texas 52.4%
Texas Percent of U.S. 88.1%


Texas Reduction Fraction Percent
U.S. Adult Private Ins. Percent 29.2%
Texas Percent of U.S. 88.1%
Texas Adult Private Ins. Percent 25.7%


Level of Analysis(Texas) Estimated Expenditures
Total Expenditures $114,172,292,944
Percent Adult Private Insurance 25.7%
Adult Exp. Private Insurance $29,324,430,032
Obesity Attributed Percent5 4.7%
Obesity Attributed Costs $1,378,248,211

Method to Calculate Absenteeism Cost

Areas of Costs Estimated Costs Percent
Health Care $1,378,248,211 70%
Absenteeism6 $590,677,805 30%
Total Costs $1,968,926,016 100%

Method to Calculate Presenteeism Cost

Areas of Costs Estimated Costs Percent
Absenteeism $590,677,805 32.2%
Presenteeism7 $1,246,503,897 67.8%
Total Costs $1,837,181,702 32.2%


Areas of Costs Estimated Costs Percent
Health Care $1,378,248,211 42.9%
Absenteeism $590,677,805 18.4%
Presenteeism $1,246,503,897 38.8%
Total Costs $3,215,429,914 100.0%


Method to Calculate Disability Cost

Areas of Costs Estimated Costs Percent
Health Care $1,378,248,211 92.3%
Disability8 $115,628,578 7.7%
Total Costs $1,493,876,790 92.3%


Summary of Costs

Areas of Costs Estimated Costs Percent
Health Care $1,378,248,211 41.4%
Absenteeism $590,677,805 17.7%
Presenteeism $1,246,503,897 37.4%
Disability $115,628,578 3.5%
Total Costs $3,331,058,492 100.0%
  1. National Health Expenditure Data, 2005 (U.S. health care costs increased 6.9% from 2004 to 2005).
  2. National Health Expenditure Data, State-Level, 2004 (applied 6.9% increase to 2004 Texas health care cost).
  3. National Health Expenditure Data, Personal Health Spending, 1999 (most recent data breaking out payer of health care costs by age) 87.7% of all health care expenditures were by ages 19 and older, with private insurance paying for 46.5% of the cost of ages 19-64 and 14.5% of ages 65+.
  4. U.S. Census Bureau, Current Population Survey, 2006 (2005 data). Fewer adults in Texas have employment-based insurance. As a result, CPA reduced adult expenditures paid by private insurance (29.2%) by the difference in U.S. adults and Texas adults covered by employment-based insurance.
  5. Finkelstein, Eric, et al., National Medical Spending Attributable to Overweight and Obesity, 2003 (4.7%).
  6. Finkelstein, Eric, et al., Cost of Obesity to Full-time Employees, 2005; findings concluded that when the universe of costs is health care and absenteeism, health care accounts for 70% of the cost and absenteeism 30%.
  7. Ricci, Judith, Elsbeth Chee, Lost Productive Time Associated with Excess Weight in the U.S. Workforce, 2005; findings concluded that when the universe of costs is absenteeism and presenteeism, absenteeism accounts for 32.2% of the cost and presenteeism 67.8%.
  8. Goetzel, Ron, et al., The Health and Productivity Health Burden of the Top Ten, 2003; based on CPA calculations of obesity related diseases, CPA findings concluded that when the universe of costs is health care and disability, health care accounts for 92.3% of the cost and disability 7.7%.
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