Health Care Plan Cost Variation by Obesity Classification & Age Group
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Health Care Plan Cost Variation by Obesity Classification & Age GroupJoseph W. Thompson, MD, MPHSurgeon General, State of Arkansas
Director, Arkansas Center for Health Improvement
Associate Professor, University of Arkansas for Medical Sciences
AcademyHealth ARM 2008: Costs & Consequences
of Adult Obesity
June 10, 2008
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Who is the CEO of the largest employer-based health insurance plan in your state?
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Arkansas Public School Employees / State Employees Health Insurance Plan• Largest state-based insurance plan
(~ 120,000 employees)• Major influence in the state on plan design,
payment structure, network development• Self-insured plan with traditional benefit structure
– no preventive coverage in 2003• Aging work force with chronic illnesses• Escalating health insurance premiums• Lack of risk-management strategies
($1600/yr for smokers)• Decisions based on annual actuarial experience –
no long-term strategy
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Arkansas Public School Employees / State Employees Health Insurance PlanCharge to the plan:
• Incorporate long-term management strategy for disease prevention/health promotion
Three phases undertaken:1) Awareness – Health Risk Appraisal (2004)
• Tobacco, obesity, physical activity, seat belt use, binge drinking
2) Support – New benefit incorporation (2005)• first dollar coverage of evidence-based clinical preventive
services• Tobacco cessation – Rx and counseling
3) Engagement – Healthy discounts (2006)
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Obese32%
Daily Cigarette Users12%
Physically Inactive
21%
No Risks11% O+P
9%
C+P1.5%
C+O2%
C+O+P1%
HRA Respondents Eligible to Incur Claims (N=43,461)
O = ObeseP = Physically
InactiveC = Daily
Cigarette Use
C7%
O20%
P 10%
Self-Reported Risks (2006)
Other Risks39%
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Obese$3,679
Daily Cigarette Users$3,081
Physically Inactive$3,643
No Risks$2,382 O+P
$4,158
C+P
$3,257
C+O
$3,529
C+O+P
$4,432
C
$2,690
O
$3,441
P
$3,169
Average Annual Total Cost by Risk Factor
O =ObeseP =Physically
InactiveC =Daily
Cigarette Use
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Average Annual Total Costs Linked to Obesity
$1,597
$2,441
$785
$1,238
$0
$1,500
$3,000
$4,500
No Risk Obese
Pharmacy
Medical
Total costs Include medical (inpatient and outpatient) and pharmacy costs for 18-84 year old state employees.
No risk = normal weight, physically active, non-smoker. Obese = BMI≥30.
Total difference
$1,297 (54% higher)
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Average Annual Total Costs Linked to Obesity compared with Cost for No-Risk Group by Age Group
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
18-24 25-34 35-44 45-54 55-64 65-74
$1,3
82
$1,8
57
$1,9
91
$2,4
09 $3,2
66 $4,3
38
No Risk$1
,230 $2
,160
$2,8
01 $3,7
65
$5,3
91
$8,8
60
Obese
$4,522 (104%)
Total costs include medical (inpatient and outpatient) and pharmacy costs for state employees.
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1998
Obesity Trends* Among U.S. AdultsBRFSS, 1990, 1998, 2006
(*BMI 30, or about 30 lbs. overweight for 5’4” person)
2006
1990
No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%
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Conclusions and Policy Implications• Obesity-related costs increase with age
and represent a major opportunity for cost containment and health improvement
• Costs dramatically increase with age and are differentially higher for those who are obese.
• Cumulative costs stratified by age and obesity classification may inform future actuarial projections for the plan and justify programmatic development.
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Implications• Current health care financing constructs prevent
support for early screening, prevention, and treatment– Fragmented child, adult, senior support
– Onset of risk in child/adolescent period; cost impact as adults (maximum for Medicare)
– Congressional House Pay-Go rules; Congressional Budget Office 10-year window for cost-projections
• Without attention and a nationwide strategy to prevent and address precipitating behaviors known to cause disease, the financial viability of the health care financing system, particularly Medicare, is at risk.
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Acknowledgements
• ACHI staff and co-authors– Paula Card-Higginson, BA, ELS
– Rhonda Jaster, MPH
– Jennifer L. Shaw, MAP, MPH, DrPH
– Sathiska D. Pinidiya, MEd, MS
• Arkansas Employee Benefits Division