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With Obesity Key Driver of Rising Health Care Costs, National Business Group on Health Urges Tax Code Changes

Posted on: Thursday, 7 May 2009, 14:00 CDT

WASHINGTON, May 7 /PRNewswire-USNewswire/ -- Underscoring the enormous strain that obesity places on our nation's health care system and economy at-large, the National Business Group on Health today released new data from Dr. Kenneth Thorpe documenting the staggering costs associated with obesity and called on Congress to make important tax changes to encourage employees to participate in employer-sponsored health and wellness programs. As part of the briefing, Dr. J. Brent Pawlecki of Pitney Bowes highlighted its innovative and nationally recognized strategies in combating obesity among its 35,000 employees.

"While employers have made great strides in emphasizing prevention, health, and wellness, far too many American workers are still obese and placing great strains on the system," said Helen Darling, President of the National Business Group on Health (NBGH). "Obesity and related complications add hundreds of billions of dollars to our nation's health tab annually and are pushing our health system - and with it, our economy - to the brink. We urge policymakers to take swift action to make common-sense tax code changes that help encourage workers to take greater advantage of workplace health and wellness programs and develop other programs and policies that will accelerate the reduction in obesity, especially among our vulnerable children."

Economic Impact of Obesity

In the past twenty-five years, adult obesity in the United States has doubled and childhood obesity has tripled. In 2007, the Centers for Disease Control and Prevention (CDC) reported that more than one-third of adults in the United States, over 72 million people, were obese. A new study released today, "Weighty Matters: How Obesity Drives Poor Health and Health Spending," and conducted by Kenneth Thorpe, Ph.D., Robert W. Woodruff Professor and Chair, Rollins School of Public Health, Emory University and Executive Director, Partnership to Fight Chronic Disease provides new evidence of the role obesity plays in rising health care costs and rates of chronic disease. Key findings from the study include:

• The prevalence of 11 chronic conditions associated with overweight and obesity grew 180 percent from 1997 to 2005;
• Average per capita health spending increased by 40 percent from 1997 to 2005, but the average for the 15 costliest conditions - all associated in some way with obesity - jumped 55 percent;
• Overall, obesity accounts for 27 percent of the increase in inflation-adjusted health expenditures among working-age adults; and
• If the prevalence of obesity were the same today as in 1987, health care spending in the United States would be about $200 billion less each year.

"These data are fresh evidence of how much obesity contributes to rising health care costs and the crushing burden of chronic disease," said Dr. Kenneth Thorpe. "If policymakers are serious about bending the cost curve, the first place to start is with reducing the incidence of obesity and related complications that drive hundreds of billions of dollars annually in avoidable health care costs."

Case Study: Pitney Bowes' Innovative Strategies for Encouraging Employee Wellness

At the briefing, J. Brent Pawlecki, M.D., Corporate Medical Director at Pitney Bowes, discussed his company's innovative strategies for helping its employees maintain and improve their health and well-being and to combat the incidence of obesity. With 35,000 employees located in 130 countries, the Stamford, Connecticut-based company devotes significant resources to providing health care coverage and wants to ensure value for its spending through forward-looking programs.

"Pitney Bowes considers the Health and Wellness programs to be an investment in the overall health, engagement and productivity of its employees, which is ultimately good for the business," said Dr. Brent Pawlecki.

In 2001, Pitney Bowes created Health University to improve employee health and maintain lower-than-average cost trend. Threatened with an aging workforce and increased health risk and claim costs, Pitney Bowes' executive leadership realized that, left unchecked, health issues could overwhelm the corporation. Pitney Bowes embarked on a clearly defined strategy to focus on preventing obesity, maintain healthy weight, increase physical activity, and to include not only workers, but their families as well.

NBGH Urges Tax Policy Changes to Encourage Health & Wellness

NBGH believes that changes in tax policy are urgently needed to maximize employer adoption and increase employee participation in worksite health and wellness programs. Currently, the tax code treats expenses for medical care and treatment of disease favorably, but not activities and programs designed to prevent disease and maintain health. This treatment of wellness, fitness, health promotion, and weight management programs for employees poses a barrier and disincentive to more comprehensive employer-sponsored wellness programs. The National Business Group on Health is calling on Congress and the Administration to act on the following proposed changes:

• Employer contributions toward employee expenses for health and wellness activities, programs and purchases should be excludable from employees' incomes for tax purposes;
• Employees should be able to use pre-tax dollars (including through Section 125 cafeteria plans, HSAs and FSAs) to pay for their share of health and wellness activities, programs, and purchases including for fitness, nutrition, exercise and weight-management programs; and
• People should be allowed to deduct post-tax out-of-pocket expenses for health and wellness activities, programs, and purchases from their taxes in the same way that they can for medical expenses if their total health care and wellness expenses exceed the 7.5 percent adjusted gross income threshold.

The full report and proposed policy solutions can be found at http://www.businessgrouphealth.org/.

The National Business Group on Health (NBGH) represents 300 large employers - including 64 of the Fortune 100 - which provide health care coverage to over 55 million U.S. workers, retirees, and their families. NBGH is the only national organization focused exclusively on health care issues for large employers and represents all leading sectors of the US economy.

SOURCE National Business Group on Health

Source: PR Newswire

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