Economics of Obesity to Employers

Obesity Management Toolkit

Economics & Employer Impacts

Obesity is a high-cost disease. Employees with obesity are disproportionately represented among an employer’s high-cost claimants, largely due to expenditures associated with the management of multiple associated chronic conditions. The economic impact of individuals who are overweight or have obesity with related comorbidities is significant, accounting for an estimated $480 billion in direct health care costs in the U.S. According to the Obesity Medicine Association, there are at least 60 comorbidities associated with obesity. These conditions can result in a significant economic burden for employers.

Determining the Cost of Obesity to Your Organization

To better manage obesity-related costs, employers first need to determine how many members have a diagnosis of obesity and/or common related comorbidities, which can be a flag for obesity. Because obesity does not often appear as a primary diagnosis in claims data, it is important to look at a variety of sources in addition to claims data for this information. Employers can use one or more of these sources:

Biometric screening data:

  • BMI Measurement (not self-reported): Require onsite screening vendor, lab vendor and/or physician to verify height and weight measurement.
  • Health Risk Assessments (self-reported): Verify that BMI is part of an annual workforce health risk assessment.
  • Ask vendors, onsite clinics and health plans to identify individuals with obesity using this data.

Medical/pharmacy claims:

  • You may not see obesity in your claims data as it is rarely a primary diagnosis, and many comorbid conditions are documented before a provider includes obesity on a list of diagnoses.
  • Use the ICD-10 codes associated with obesity below to determine the number of members with obesity-related chronic conditions.
7-ICD-10_Codes_for_Common_Comorb-01.png

Short-term and long-term disability and workers’ compensation claims:

  • The impact of lost productivity, including absenteeism, presenteeism, short-term disability and workers’ compensation, are a significant burden on health care costs.
  • The following chart provides insight into missed days of work for an employee with normal BMI versus one with a high BMI.

Obesity & Comorbidities

By itself, obesity is not a major driver of health care costs. Substantial expense can be generated by the significant number of other chronic conditions found in greater frequency among individuals who have obesity. These conditions include, and are not limited to type 2 diabetes, hypertension, high cholesterol, coronary artery disease, non-alcoholic fatty liver disease (NAFLD), cancer and osteoarthritis. In addition, 43% percent of adults with depression have obesity.

Because of the clinical significance of obesity-related comorbidities, obesity is often not the primary diagnosis given to patients who seek care from their health care provider. Clinicians are typically more comfortable treating comorbid diseases that have a physiologic basis where medications are readily available and have demonstrated efficacy. Educating physicians about treating and coding for obesity is a critical aspect of any obesity management initiative.

The following chart shows the relationship between obesity and its impact on the relative risk of developing the most common obesity-related chronic conditions. For example, for an adult who is overweight, the likelihood of developing diabetes is 1.52 times greater than an individual with a weight in the normal range – and for an individual with obesity, the likelihood increases to 3.43 times greater. Each of these comorbid conditions can be associated with a significant increase in health care expenditures.


When considering the impact on an employer’s workforce, it becomes important to understand the increase in health care costs associated with obesity. The graph below shows the incremental increase in the number of cases of different obesity-associated chronic conditions.

Acme Widgets – 10,000 workers (Hypothetical Model)

The light blue portion of the bars in this chart indicate the number of individuals with weight in the normal range that are expected to have various chronic conditions. However, because workers at Acme Widgets have a higher prevalence of obesity, the dark blue portion of the bars indicates the actual number of individual cases is significantly greater. This difference will likely drive considerable increases in condition-specific health care costs.

Barriers to Obesity Management

Because obesity is a chronic condition with multiple contributing factors, it is not surprising that management is complex, requiring both physiological and psychological interventions. Barriers exist in both areas that can present significant challenges for those with obesity. These include individual struggles such as negative body image, eating to cope with stress and depression, interpersonal experiences (blaming or shaming) with friends and family and significant societal stigma and bias. In addition, there can be a lack support from health professionals for those who do seek help. To overcome these challenges, individuals living with obesity must be supported in both their physical and mental well-being, and effective obesity care must include access to this support.

The Awareness, Care, and Treatment In Obesity MaNagement (ACTION) study is the first in the U.S. to explore the barriers to effective obesity care from the perspective of individuals with obesity, health care professionals and employers. The results of this study emphasize the need for employers to assess their obesity management efforts and align them with the needs and interests of their specific population. This can be accomplished by eliciting input directly from employees via focus groups, interest surveys or other means. The researchers identified five key barriers:

  1. Challenges to maintaining weight loss: Individuals with obesity reported making an average of seven serious weight loss attempts in their adult lifetime; only 10% were able to maintain the weight loss for a year.
  2. Reluctance to seek help: Despite recognition of obesity as a disease, most individuals with obesity view weight loss as solely their personal responsibility.
  3. Inadequate diagnosis: Among the 71% who had a conversation about weight with their provider, just 55% reported being diagnosed with obesity.
  4. Insufficient dialogue and follow up: 71% percent of those with obesity say they have spoken with their health care provider about their weight in the past five years; only 38% of clinicians have discussed a weight loss plan with them.
  5. Misaligned perceptions of wellness offerings: The value of wellness programs is perceived differently by employers and individuals with obesity; 72% of employers perceived wellness programs as helpful in contrast to just 17% of those with obesity.

Fortunately, the economic losses are reversible. In a recent review of interventions designed to reduce obesity, it was concluded that for individuals with a body mass index (BMI) of 40 or greater, a 5% weight reduction would yield $2,137 in medical cost savings annually. For individuals with a BMI of 35, a 5% reduction would result in an annual savings of $528.

Impact of Treatment on Obesity-Associated Comorbidities

Effective obesity management can yield significant benefits. Weight loss of as little as 5% can yield clinical improvements in many obesity-related comorbidities, along with likely health care cost savings.

In a study of nearly 21,000 working-age adults with obesity who lost 5% or more of their body weight, researchers were able to estimate the average annual health care cost savings for seven common chronic conditions (see graphic below):

  • Cost savings were calculated by comparing annual condition-specific costs before and after weight loss.
  • Condition-specific costs decreased in association with weight loss, with greater loss resulting in greater cost reductions.
  • Diabetes-related costs decreased the most following weight loss (likely due to reduced medication use), with arthritis-related costs also declining significantly (likely due to reduced need for surgery).

The most significant finding from this analysis is that health care cost savings occurred as patients achieved weight loss. Effective weight management programs can result in cost savings from reduced severity of obesity-associated comorbid conditions.