Why Health Plans Should Cover Treatments for Obesity  

Table of Contents

1. Obesity is a Major Health Care Problem
2. Why Don't Health Plans Cover Obesity Treatments?
3. Health Care Plans Have Significant Expenses for Diseases Caused by Obesity, which Could be Affected by Treatment

1. Costs Associated with Obesity
2. Do Reductions in Weight Translate into Cost Reductions?

4. Obesity Itself is a Disease
5. Current Treatments are Safe and Effective
6. What About Obesity Surgery?
7. Why is Reimbursement Important?
8. Isn't it Really a Matter of Personal Responsibility?
9. Recent Successes
10. References

1. Obesity is a Major Health Care Problem

Obesity is a serious disease which is well established scientifically as an independent cause of extensive mortality and morbidity. Studies have confirmed and estimated 300,000 premature deaths a year from obesity. Obesity's impact on health is as great as that from smoking, poverty and problem drinking. The diseases caused by obesity, including type 2 diabetes, several cancers, osteoarthritis of the knee and hip, sleep apnea, hypertension, high cholesterol, and heart disease and stroke, are among the most serious and costly in society. More than thirty health conditions are being research for their association with obesity.
Obesity has been recognized as a major health problem by the Surgeon General of the United States, the World Health Organization, the National Institutes of Health and the Centers for Disease Control and Prevention.
In addition, obesity carries psychosocial problems including extensive discrimination in education, employment and health care.

2. Why Don't Health Plans Cover Obesity Treatments?

Over the last twenty years, employers and the insurance industry have tried a variety of cost control innovations. Major innovations were "health maintenance organizations" which were envisioned as a mechanism to keep consumers healthy and thus reduce costs. Unfortunately, throughout this time, managed care, indemnity programs and federal and state health plans excluded almost all treatments for obesity. The rates of obesity increased and the costs of treating the conditions caused by obesity have continued to rise.
There are several possible reasons for the lack of insurance coverage including lack of understanding that obesity itself is a disease, misperceptions of effectiveness of treatment, and beliefs about the role of personal responsibility.
There is little doubt that the public at large and many physicians do not regard weight loss treatments as effective. To some extent, this is a carry-over from previous failures in obesity treatments. But it does not reflect the current picture of obesity treatments across the spectrum of therapies. Obesity treatments are too often held to a higher standard than other medical treatments in terms of effectiveness. Few therapies covered by insurance produce a complete cure or are effective if treatment is suspended. For most chronic diseases, treatments are few and limited. Compared to treatments for other lifelong chronic conditions, obesity treatments demonstrate comparable effectiveness.
Payors do have a legitimate concern about the financial exposure if they cover a treatment for which millions of persons would be eligible. This is a reasonable concern. However, financial control can be exercised by reasonable combinations of limitations on the amount or duration of services, patient selection criteria, co-payments and caps on annual or lifetime payments as long as persons with obesity do not receive second class treatment or reduced access to care.

3. Health Care Plans Have Significant Expenses for Diseases Caused by Obesity, which Could be Affected by Treatment

Few, if any, coverage decisions are made in order to save the health plan or employer or patient money. Cancer, stroke, heart disease all require significant outlays which do not produce a cost savings for the health plan. We do not think that obesity treatment should be held to a higher standard than other coverage decisions. However, we are also mindful that costs are a factor in decision-making on extending coverage for obesity treatments.
Therefore, we want to summarize the literature available at this time in relation to the costs associated with obesity and the cost reductions.

1. Costs associated with obesity

The American Obesity Association commissioned a cost study in 1999 by the Lewin Group, a respected health economics consulting firm. The Lewin Group examined the costs of some fifteen (15) conditions causally related to obesity. They included: arthritis, breast cancer, heart disease, colorectal cancer, type II diabetes, endometrial cancer, end-stage renal disease, gallbladder disease, hypertension, liver disease, low back pain, renal cell cancer, obstructive sleep apnea, stroke and urinary incontinence. Utilizing the National Health Interview Survey in 1995 and the NHANES III database, they established prevalence rates of each comorbid condition. For each condition, the percentage of the cost of each disease was determined through the scientific literature or professional associations and were computed according to the percent of the costs attributed to obesity. This method established the direct health care costs of obesity at $102.2 billion in 1999. This study did not examine indirect costs. It should be noted that the study relied on published data on the costs of the specific comorbid diseases. There is probably some amount of double counting in the figure which could not be adjusted.
The Lewin study confirmed other studies in finding a direct correlation between increases in Body Mass Index (BMI) and increases in the prevalence of comorbid conditions, especially type II diabetes, hypertension, heart disease, stroke and arthritis.
Heithoff found that health care expenditures among both underwieght and overweight individuals increased in relation to ideal weight. In 1998, Wolf and Colditz concluded that the total direct costs for attributable to obesity were $51.64 billion in 1994. However, Wolf and Colditz had fewer comorbid conditions with economic data than were available to the Lewin Group.
Wolf and Colditz estimated $47.56 billion in indirect costs in 1994, which included lost productivity, restricted activity days. Their study concluded obesity was responsible for about 5.7% of national health expenditures. Lewin Group figures would equate to about 9.8% of national health expenditures.
David Thompson reported that the cost of obesity to U.S. business in 1994 was $12.7 billion, including $2.6 billion as a result of mild obesity and $10.1 due to moderate to severe obesity. Health insurance expenditures constituted $7.7 billion of the total among, representing 43% of all spending by U.S. business on coronary heart disease, hypertension, type II diabetes, hypercholesterolemia, stroke, gallbladder disease, osteoarthritis of the knee and endometrial cancer. Obesity-attributable business expenditures on paid sick leave, life insurance and disability insurance amounted to $2.4 billion, $1.8 billion and $800 million respectively.
Given methodological differences, these findings are consistent with numerous other studies. (See, Kort, Hughes and Seidell.)
These global studies reflect results from more local settings. In a study of members of a large HMO, Quesenberry found an association between BMI and additional annual inpatient days and costs of outpatients visits, costs of outpatient pharmacy and laboratory and total costs. Tucker found that obese employees were more than 1.74 as likely to experience high-level absenteeism and 1.61 times more moderate absenteeism than were lean employees. This finding is similar to that of Burton and colleagues.
Burton et al found that as Body Mass Index (BMI) increased so do the number of sick days, medical claims and health care costs. The mean annual health care costs were $2,274 for individuals above a BMI of 27 and $1,499 for workers below that level. They suggest, "Employers may benefit from helping employees achieve a healthier weight."

2. Do reductions in weight translate into cost reductions?

While the answer to this question appears straightforward, it has not been studied in detail and assumptions may be mitigated by the difficulties in sustaining weight loss over time.
However, an encouraging model does exist. Oster et al have developed a model of the relationship between body mass index and the risks and costs of 5 obesity-related diseases. They then calculated the lifetime health and economic benefits of a sustained 10% reduction in body weight from men and women, aged 35 to 64 with mild, moderate and severe obesity.They found that a sustained 10% weight reduction would:

• reduce the expected number of years of life with hypertension by 1.2 to 2.9 years, with hypercholesterolemia by 0.3 to 0.8 year, and with type II diabetes by 0.5 to 1.7 year.
• reduce the expected lifetime incidence of coronary heart disease by 12 to 38 cases per 1000.
• reduce stroke by 1 to 13 cases per 1,000.
• increase life expectancy by 2 to 7 months.
• reduce expected lifetime medical care costs of these five disease by $2,200 to $5,300.

Narbro et al studied patients who had gastric bypass surgery in Sweden. They found that before surgery, the number of sick days plus disability pension were similar between controls and subjects. After surgery, the patients had more sick days in the first year but fewer days of sick leave in years 2 and 3. During the fourth year, the surgical group had fewer sick days. They concluded that surgical treatment of obesity results in a reduction of sick leave and disability pension compared to controls.
Weight losses as small as 10% are associated with substantially reduced health care costs, reduced incidence of obesity-related comorbid conditions and increased lifetime expectancy (Goldstein)
Recent research has addressed the cost-effectiveness of drug treatment and surgery for obesity. In 1999, Greenway found that weight losses produced by medications (fenfluramine with mazindol or phentermine) reduced costs more than standard treatment of comorbid conditions. Gastric bypass surgery has demonstrated even more impressive effects, with lower costs and greater long-term weight loss maintenance in comparison to low-calorie diets and behavior modification as well as significant reductions in BMI, incidence of hypertension, hyperinsulinemia, hypertriglyceridemia, and hypo-high density lipoprotein cholesterolemia, and sick days from work compared with matched controls. (Martin)
In 1999 a retrospective study of the effects of weight loss on health care costs was published. A team from Group Health Cooperative of Puget Sound examined utilization and cost for 60 of its HMOs enrollees as compared to a group of 45 equally overweight enrollees. Both groups had similar BMI of about 39 and an average weight of 241 lbs. After a Very Low Calorie Diet for three months, treatment subjects lost about 11% of their weight to a BMI of 35, maintained that weight for 2 years and gradually regained over 7 years to close to their starting weights.
In the first year, health care costs for the treatment group were $317 greater than controls. Thereafter, costs were significantly lower in the treatment group compared to controls in each year. Even including the first year, the average annual difference between the treated and untreated groups was $1,648 ($3,217 versus $4,865) or a total savings over 7 years of $11,536 per person. The average annual costs of health care for the controls was 50% greater than those in treatment, even though most of the weight was regained. (Berkson)

4. Obesity is itself a Disease

The American Obesity Association (AOA) believes that obesity is a disease. We want obesity understood by the health care community and patients as a serious disease of epidemic portions.
Why do we think obesity is a disease?
First, let’s define our terms. Dictionaries agree: obesity is excess body fat. It is not defined as a behavior. However, many people use the term obesity as a short-hand for overeating or lack of exercise. But that is not its definition.
Consider this: most people can distinguish between smoking and lung cancer. One is a behavior and one is a disease. Or problem drinking of alcohol and liver disease. One is a behavior and one is a disease. Sunbathing without protection is a behavior; skin cancer is a disease.
Second, obesity — the excess accumulation of body fat — fits all the definitions of "disease". How is "disease" defined? Most dictionaries, general as well as medical, define a disease and an interruption, cessation or disorder of a bodily function, organ or system. Obesity certainly fits this definition.
Some dictionaries have a more precise definition. Steadman’s Medical Dictionary says that to be a disease it should have at least two of the following three features:
1. recognized etiologic agents,
2. identifiable signs and symptoms, and,
3. consistent anatomical alterations.
The "recognized etiologic agents" for obesity include social, behavioral, cultural, physiological, metabolic and genetic factors.
The "identifiable signs and symptoms" of obesity include an excess accumulation of fat or adipose tissue, an increase in the size or number of fat cells, insulin resistance, increased glucose levels, increased blood pressure, elevated cholesterol and triglyceride levels, decreased levels of high-density lipoprotein and norepinephrine and alterations in the activity of the sympathetic and parasympathetic nervous system. One is also likely to find shortness of breath and back pain.
The "consistent anatomic alteration" of obesity is the increased in body mass. Therefore, obesity meets all three of the dictionary criteria for disease.

5. Current Treatments are Safe and Effective

Weight loss interventions work and will result in the reduction of many of the comorbid diseases associated with obesity. Weight loss involves more than a choice of foods. Research indicates that effective weight loss interventions, including surgery and pharmacology, use behavior modification to promote healthier lifestyle.
In 1998, the National Institutes of Health issued comprehensive Clinical Guidelines on the Identification, Evaluation, and Treatment of Overweight and Obesity in Adults. The National Institutes of Health recommended treating overweight and obesity based "not only on evidence that relates obesity to increased mortality but also on RCT (randomized clinical trials) evidence that weight loss reduces risk factors for disease. Thus weight loss not only may help control diseases worsened by obesity, it may also help decrease the likelihood of developing these diseases."
Based on exhaustive reviews of numerous studies, the NIH made several recommendations including the following:

• "Weight loss is recommended to lower elevated blood pressure in overweight and obese persons with high blood pressure."
• "Weight loss is recommended to lower elevated levels of total cholesterol, LDL-cholesterol and triglycerides and to raise low levels of HDL-cholesterol in overweight and obese persons with dyslipidemia."
• "Weight loss is recommended to lower elevated blood glucose levels in overweight and obese persons with type 2 diabetes."
• "The combination of a reduced calorie diet and increased physical activity is recommended, since it produces weight loss, decreases abdominal fat, and increases cardiorespiratory fitness."
• "Behavior therapy is a useful adjunct when incorporated into treatment for weight loss and weight maintenance."
• "Weight loss drugs approved by the FDA for long-term use may be useful as an adjunct to diet and physical activity for patients with a BMI of 330 with no concomitant obesity-related risk factors or diseases, and for patients with a BMI of 327 with concomitant obesity-related risk factors or diseases"

A study of primary care physician practices in Michigan (Noel) confirmed that "a modest weight loss of 15 pounds per person would markedly reduce the prevalence of overweight in our patients from 53% to 37 and from 28% to 18%, respectively."

6. What About Obesity Surgery?

In 1991, the National Institutes of Health published a Consensus Statement on surgery for the treatment of morbid obesity. It cited studies showing that following bariatric surgery, most patients lost weight rapidly and continued to do so for 18 to 24 months. Patients may lose up to 50% of their excess weight in the first six months and 77% of excess weight in one year. Patient were able to maintain 50 to 60% of their weight loss 10 to 14 years after surgery.
In 1998, the National Institutes of Health issued Clinical NIH Guidelines on the Identification, Evaluation, and Treatment of Overweight and Obesity in Adults makes the following Recommendation:
"Surgical intervention is an option for carefully selected patients with clinically severe obesity (a BMI > 40 or >35 with comorbid conditions) when less invasive methods of weight loss have failed and the patient at high risk for obesity-related morbidity and mortality."
This recommendation was based on a review of 14 randomized clinical trials of different surgical interventions. Weight loss ranged from 110 pounds to as much as 200 pounds over a period of six months to one year. Comorbidity factors associated with weight loss showed improvement after surgery. One study showed that medical illnesses either improved (47%) or resolved (43%) in all but four patient (9%) and these four had unsatisfactory weight loss. The Adelaide Study showed that 60% of the patients who initially had obesity-related comorbidity were free of medication for these comorbidities 3 years after surgery.
An article in Obesity Surgery in June of 2000 by Wittgrove and Clark show that 96% of certain obesity-related health conditions (back pain, sleep apnea, high blood pressure, diabetes and depression) were improved with surgery.

7. Why is reimbursement important?

First, there are more people in need of services than are currently receiving services. For many of these persons, the costs of services are a deterrent to receiving care. They simply do not have the funds to pay out of pocket. From the point of the view of the person with obesity, everything that it takes to become overweight in our society is cheap and plentiful. Everything it takes to manage one's weight effectively costs time or money, and usually both. Health insurance is designed to help persons improve or restore their health without personal improvishment.
Second, it makes little sense for employers, taxpayers, and insured persons to pay (either through premiums of taxes) into a health insurance system which pays for treating conditions like type 2 diabetes but not for addressing the cause - obesity. In addition, most health plans cover numerous conditions which have neither the mortality or morbidity of obesity. Take, for example, coverage of Viagra™ for male erectile dysfunction. Most health plans cover the drug as does Medicaid. Yet, few could argue that the mortality and morbidity of male erectile dysfunction compare to that of obesity.

8. Isn't it Really a Matter of Personal Responsibility?

Beliefs about the role of personal responsibility and weight control are perhaps the most significant obstacle to health insurance reimbursement. A great many health care conditions involve personal behavior. Hypertension, diabetes, sexually transmitted diseases, including HIV/AIDs, and sports injuries all involve as much if not greater personal behavior than obesity. Some thirty-percent of all cancers, are reportedly due to diet, nutrition and physical inactivity. Skin cancer may be do to persons who are genetically susceptible exposing themselves to the sun without proper personal protection. But their skin cancer costs are reimbursed.

9. Recent Successes

However, the situation can improve and has over the last several years. The American Obesity Association (AOA), as an advocacy organization, is committed to expanding insurance coverage for obesity treatment. Success has been obtained in expanding recognition of obesity as a disease and in working on obtaining reimbursement.
Under the Internal Revenue Service (IRS), expenses for weight loss had not allowed as a medical expense. Earlier instructions to taxpayers had stated, "You cannot deduct the cost of weight loss treatment even if your doctor prescribes it."( IRS Publication 502 for 1999 tax year)
In August of 1999, AOA put together a coalition of organizations in a petition to the IRS to change this interpretation of the Internal Revenue Code. A year later, the IRS changed its Instructions to read, "You can include in medical expense the cost of weight loss program undertaken at a physician’s direction to treat an existing disease (such as heart disease). But you cannot include the cost of a weight-loss program if the purpose of the weight control is to maintain your good health." (IRS Publication 502 for 2000, 2001 tax years)
Subsequently, AOA asked the Internal Revenue Service for a letter of public information as to whether treatment for obesity (defined as a Body Mass Index 330) alone qualified for the deduction. The IRS responded on June 1, 2001.
In the letter, the IRS stated, "We are aware that there is considerable scientific and regulatory authority that obesity is, in and of itself, a disease…If obesity is a disease, then expenses for the diagnosis and treatment of obesity may qualify as expenses for medical expense. There are, however, certain limitations on the medical expense deduction that may apply to expenses for treating obesity. Expenses for medicines and drugs to assist in weight loss can be for medical care only if the medicine or drug is a prescribed drug or insulin…Additionally, while many obese individuals may follow special diets as part of their treatment, the cost of food is not an expense for medical care to the extent the food is a substitute for the food that an individual would normally consume to meet nutritional requirements. If a special diet is directed as treatment for a disease, only the excess cost of the special diet over the cost of a regular diet could be an expense for medical care."
The IRS decision applies not only to individuals who itemize their deduction. It also applies employees who participate in a medical savings account.

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