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Life Health > Health Insurance > Health Insurance

The Fat of the Land

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Several years ago, Denny’s Beer Barrel Pub in Clearfield, PA, started running contests that challenged its patrons to consume increasingly large hamburgers within limited amounts of time. As customers managed to polish off three-, four- and even five-pound burgers, the pub responded with the Beer Barrel Belly Buster, a burger consisting of 11.5 pounds of meat, 25 slices of cheese, a head of lettuce, two onions and three tomatoes. It clocks in at 25,000 calories, and for only $34.99, is one of the richest dollar-to-calorie deals one is likely to find. Those who could eat it within six hours got their meal for free, $350, a certificate of achievement, a photo on the pub’s wall of fame, and a t-shirt.

For years, the Belly Buster was the world’s largest hamburger until the Clinton Station Diner in Clinton, NJ topped it with the Mt. Olympus, which consists of 25 pounds of meat, weighs more than 50 pounds total, takes more than an hour to prepare, costs $99 and is meant for a team of five to consume within three hours. The Clinton Station Diner is not far from where I grew up, and I have seen the Mt. Olympus served just once. I asked the waitress on a subsequent visit how the diner fared who tried to eat it. She smirked and said that Mt. Olympus nearly killed the guy.

The Beer Barrel Pub responded with the Beer Barrel Belly Bruiser, which is roughly twice the size of the Mt. Olympus and while it has been submitted to the Guinness Book of World Records, is not really intended for consumption. How could it be? The sandwich is constructed on such a scale that it would require a man approximately 20 feet tall to eat the Belly Bruiser as if it were a normal burger.

Novelty eating contests have long been a part of Americana, from local restaurant challenges to countywide pie-eating contests to a national competitive eating circuit that features events such as the Nathan’s Famous hot dog eating contest on the Fourth of July, which merits coverage by ESPN. They have been, in part, a celebration of the United States’ rich abundance of food, every kind. But ever since the end of World War II, the American public has gotten increasingly heavy, to the point where the country is currently one of the fattest in the world.

According to the Office of Economic Coordination and Development’s (OECD’s) Directorate for Employment, Labor and Social Affairs, nearly 70% of all Americans are currently overweight (having a body mass index, or BMI of 25.0 to 29.9), with nearly 40% being obese (having BMI, of 30.0 or higher). Body mass index is that rough formula for determining how fat one is by dividing their weight by the square of their height. It is not a perfect formula, as many weightlifters classify as obese based on their BMI, but for the vast majority of people, BMI is a fairly reliable indicator of if they are overweight, and by how much.

Our collective weight problem is not the worst in the world; Kuwait, the United Arab Emirates, Saudi Arabia and various Polynesian nations are all worse off. But the U.S. is not far behind, and outweighs every other nation in the G20 as well as most others on the planet. According to the OECD, at our current rate, eight out of every 10 Americans will be overweight by 2050. Nearly half of them, including children, will be obese.

It is not hard to see how we got this way. The average American’s weight has steadily increased since the end of WWII, but it really began to climb here (as well as in other nations) in the 1980s (when, coincidentally, large quantities of government-subsidized high-fructose corn syrup began flooding industrial food production). Concurrently, a decline in home cooking, a rise in restaurant eating, expanding portion size and a bizarre arms race among chain restaurants has made it increasingly difficult for people to maintain a healthy weight.

The New Normal

Americas have known about their collective weight problem for years, but recently, the situation has gotten so out of hand that a culture of obesity is beginning to emerge where being overweight is a new kind of normal, and where obesity is worthy of glorification.

The exemplar of this mindset would be the Heart Attack Grill a restaurant chain with locations in Chandler, Arizona and Dallas, Texas, and it has become notorious for its slogan “Taste Worth Dying For,” The chain features the 1x, 2x, 3x, and 4x Bypass Burger (a quadruple Bypass is aout 8,000 calories), as well as Flatliner Fries cooked in real lard, full butterfat shakes, filterless Lucky Strike cigarettes and candy cigarettes for the kids. Its waitresses, dressed in nurse outfits skimpy enough to make a Hooters girl blush, officially weigh in heavier patrons upon arrival. Anyone over 350 lbs. eats for free.

That last gimmick was thought of by 575-lb. HAG spokesman Blair River, who died in March after contracting flu-based pneumonia. Jon Basso, owner of the Heart Attack Grill said that had Rivers been thin, he would have had a tenfold opportunity to survive the pneumonia. That being said, the Heart Attack Grill has not altered its menu since River’s death and stands by another one of its marketing slogans: “Eating, drinking and smoking toward better health.”

The Heart Attack Grill would be grotesquely laughable, were its mindset not so openly accepted. As obesity rates have risen, so too has the so-called size acceptance movement, typified by groups like the National Association to Advance Fat Acceptance and the International Size Acceptance Association. The primary focus of such groups is to battle size-based discrimination–citing statistics that overweight and obese workers routinely earn less and are promoted less frequently than their normal-weight colleagues. (According to the Council on Size and Weight Discrimination, this can amount to as much as $100,000 in lost wages over a 40-year career.)

But sizism groups also promote concepts more difficult to defend, such as “health at any size,” which promotes the idea that health, not weight, is what people should strive for. Critics note that “health at any size” overlooks a clear correlation between being overweight and having an elevated risk for a number of serious ailments identified by the Centers for Disease Control (CDC), such as heart disease, high blood pressure, diabetes, various cancers, stroke, and musculoskeletal disorders. A harder line suggests that “health at any size” is merely a means of avoiding responsibility for the health consequences of obesity. More importantly, a push for obesity acceptance might even skew our understanding of what obesity really is.

According to the American Heart Association (AHA) while two-thirds of adults–and one-third of children–are overweight or obese, people are increasingly likely to see their excessive weight as normal. This comes from a recent AHA study of 222 mostly Latino mothers and children at an urban children’s health clinic. Two thirds of the mothers were overweight or obese. Some 40% of the children were as well. The AHA noted that the study group was too small to make any definitive claims, but that similar studies yielded similar results. Enough, by any rate to get some broad indicators of where perceptions are shifting. And they are not going anywhere good.

The study found that 82% of the obese women interviewed underestimated their own weight, compared to just 43% of overweight women and only 13% of normal weight women. Likewise, 86% of overweight or obese kids undershot their weight, versus just 15% of normal weight children. Half of mothers with overweight children thought their child’s weight to be normal. Conclusion: as subjects became more overweight, the larger their misperception of true body weight.

Living Large

Obesity is not just an individual’s problem. Collectively, this epidemic imposes massive additional health care costs on the larger economy. One set of figures from McKinsey & Company puts the annual total at $450 billion.

Individual costs account for $140 billion each year, between $90 billion in incremental food expense to maintain obesity (except for those dining at the Heart Attack Grill, obviously), $30 billion in plus-size clothing, and $20 billion in weight loss programs. (Incidentally, it is this expenditure on weight loss that the size acceptance movement routinely cites as a reason to embrace size acceptance).

Payer costs include $20 billion on out-of-pocket health costs (namely for the various weight-related health problems cited above by the CDC), $60 billion in additional Medicare and Medicaid expenses and $80 billion in claims costs to commercial payers (health insurers). As a point of reference, the $60 billion in Medicare/Medicaid costs is six times the entire science, space and technology budget for Federal Fiscal Year 2011–which includes the mothballed Space Shuttle program.

The cost to employers is $30 billion in increased levels of absenteeism. ( notes that extremely women with BMIs over 40 lose on average 22.7 additional days of work each year, while obese women with BMIs under 35 lose just 6.3 additional days per year. Extremely obese men lose an additional 21.9 work days on average while obese men lose an additional 2.3.) An additional $70 billion is lost to decreased productivity, or “presenteeism,” wherein employees not feeling 100% healthy report to work anyway. Another $30 billion is lost to weight-related short-term disability.

Another $20 billion racks up in miscellaneous costs. For example, some $10 billion a year is spent in extra fuel costs for overweight and obese passengers. Billions more are also spent on additional funeral costs, which include oversized, reinforced caskets and double-wide cemetery plots.

In total, the $450 billion in obesity-related costs to the economy is somewhere between what the federal government will pay in 2011 for Medicare ($498 billion) and Medicaid ($381 billion). Put another way, obesity-related costs are a self-imposed tax upon the American people that is equal to the gross domestic product of Sweden.

For insurers, the most troubling component of this is the $80 billion in commercial payments. To give a sense of how big a number that is, that $80 billion would wipe out every dime of the nearly $36 billion in premium income UnitedHealth Group made in 2009, with enough left over to wipe out the $25 billion in premium income that MetLife made that year as well as the $17 billion Prudential made.

That is not just incremental cost. That is industry-shaking cost at a time when the life and health world is reeling from tough market conditions and the passage of the Patient Protection and Affordable Care Act (PPACA), which its many critics contend focuses entirely on delivery of health insurance without doing anything to reduce the cost of the insurance itself. That criticism is duly noted, but it rings hollow coming from an industry that so far, has shown relatively little effort in fighting a cost driver so large that it could swallow the entire total 2009 individual life premiums for the 20 biggest life insurers in the industry.

Gut Check

So where does this leave the insurance industry? On its own, as the food industry has shown no serious interest in either reducing portions or revising the nutritional values of the food it serves. Burger King introduced its sliced “apple fries” the day after California law forced all fast food restaurants to display the nutritional information of its food items at the point of purchase. As for why Burger King never rolled out apple fries before, it said that the product had spent years under development before introduction. Years of development. For a frybox of sliced apples.

A common refrain by industry analysts since the passage of PPACA has been that health care reform itself–despite various efforts to repeal it, defund it or defeat it in court–is likely to stick around. This, as a result, will force insurers to redouble their efforts to contain costs wherever they find them and however they can.

The USDA, in a report written jointly by Stanford University and the RAND Corp. noted that among the overweight, lifetime medical costs can be reduced by as much as $5,300 following a mere 10% reduction in body weight–or just 20 lbs. on a 200 lb. individual. Elsewhere, industry figures cite a return on investment of 3:1 for programs that incentivize or encourage proactive good health, weight loss and weight maintenance.

In recent years, corporate wellness programs that incentivize good health by paying cash bonuses for lowering weight or maintaining a healthy weight have joined traditional offerings such as subsidized health club memberships, free health food on site and online health education. Insurers typically offer educational materials as well, but as obesity costs show, it clearly is not enough.

The average smoker pays from 33% to 75% more for their life policy, but at present, no such underwriting leeway exists for health insurers, especially in a post-PPACA world. And yet, for all of the lobbying the industry has done to champion the industry’s interests regarding medical loss ratios or state insurance exchanges, little has been done to grant insurers the leverage to use their most powerful tool–pricing–as a lever against policyholders that so far, have shown little interest in their own self-preservation. As the cost of obesity to insurers continues to rise, the question to the industry then becomes not when will people become responsible for tackling their collective weight problem, but when will insurers themselves start to give obesity the same kind of attention and cost containment that it has given to agent commissions, fraud and other cost drivers.


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