There’s much hand-wringing about obesity in medical and public policy circles. Most cures put forward are reminders of Friedrich von Hayek’s quote: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”
What, many ask, can governments and employers do to combat obesity? The answers elicit frustration.
A while back, one of my students (most of whom are doctors and nurses) cited a paper estimating that an average company with 1,000 employees loses $285,000 annually due to productivity problems associated with obese employees. Therefore, several students opined, it seems worthwhile for employers to establish anti-obesity programs. But is it worthwhile?
One problem is that big dollars applied to groups may really be small numbers applied to individuals. $285,000 sounds like a lot. But if this company’s thousand employees are typical of America’s population, then around one-third (333 employees) are obese. Give the human resources department a $285,000 budget to combat obesity, and it comes out to $886 per obese employee.
Oversimplifying, suppose all you have to do to lose those $285,000 costs is get those 333 employees below a body mass index (BMI) of 30 (the official boundary for obesity). But instead of thinking about $285,000 for 333 employees, think only of $886 to apply to one obese employee who is 5-foot-8 and weighs 230 pounds (a BMI of 35). To get below a BMI of 30, this employee needs to be 196 pounds — a loss of 34 pounds.
Now, think of someone who needs to lose weight. Is there any conceivable way a company can mobilize $886 to get that person to lose 34 pounds? You could buy the employee a one-year membership at a gym, but how many of us already lay out that kind of money for gyms and still struggle to lose five pounds? You could promise to give the employee $886 in cash if he gets below a BMI of 30. (I wrote a somewhat tongue-in-cheek article about this idea in 2006 for Forbes: “A Wealth of Trouble.”) But we have plenty of examples of cash bribes failing to do the trick.
Professional sports teams fine players thousands of dollars per year for failing to hit weight goals — and athletes often just pay the fines. The U.S. military, which has more control over the lives of its employees than any other employer in America, has a big problem with overweight and obese service personnel — with many forced to leave the service.
Also, outside of professional sports or the military, any employer who approaches a specific employee about his or her weight is likely to get a high-decibel earful or a lawsuit.
In this simplified example, the company that spends $285,000 on anti-obesity programs only breaks even if 100 percent of the obese employees cease being obese. Anything less than complete success means the company loses financially on the deal. (Of course, a company may opt for such a program for the good of the employees rather than for its own bottom line, but that’s a different discussion.)
The preceding scenario barely touches the challenges of developing effective anti-obesity programs. For a much fuller look at the economics of weight, you can’t do better than a 2008 book by Eric Finkelstein and Laurie Zuckerman: “The Fattening of America: How the Economy Makes Us Fat, If It Matters, and What to Do About It.”
It’s an outstanding and entertaining read not only because of the specific subject matter, but also because it’s a great window into how economists (and health economists, in particular) think about the world. “The Fattening of America” has both analytical depth and a friendly writing style easily tackled by someone with no background in health care or economics.
The book presents obesity as a serious problem, but one where solutions are hard to come by. Every page reminds me of Hayek’s words and also words from H.L. Mencken: “For every complex problem there is an answer that is clear, simple, and wrong.” Lawmakers and regulators generate a steady stream of clear, simple and wrong ideas about how to stem the complex problem of obesity.
Robert Graboyes is a senior research fellow with the Mercatus Center at George Mason University, where he focuses on technological innovation in health care. He is the author of “Fortress and Frontier in American Health Care” and has taught health economics at five universities. He wrote this for InsideSources.com.