You've heard of the steps companies are taking to cut their health care costs: They're banning smoking, offering yoga and wellness classes, even putting healthy snacks in vending machines.
But what steps do companies take before they even open?
In a trend that might sound extreme, a growing body of evidence suggests that some companies are factoring health into the way they select sites. Among other considerations, companies could be eyeing obesity rates before deciding where to put new plants and offices.
The idea is that by examining obesity rates and avoiding opening where more obese people live, companies can cut their future health care costs. For the Carolinas, that could spell trouble, given that the majority of residents are tipping the scales.
No companies that have recently opened sites in the Carolinas have acknowledged they consider such factors, and state and county economic development officials say companies have not asked them about obesity rates. But site selection consultants say considering the health of the potential work force is something that makes sense given rising health care costs – and that it's likely to become more widespread.
At a presentation to the Charlotte Chamber in June, James Johnson, an entrepreneurship professor at UNC Chapel Hill, said he learned from a company CEO that it considers a community's obesity rate in choosing new locations. In an interview, he later declined to discuss the company's statements, citing confidentiality.
When it comes to where to place new locations or expansions, industry experts say companies would be foolish not to consider potential health care expenses.
“Taken in isolation and all things being equal, if you had a healthier population you are going to have lower absentee rates and lower health care costs,” said John Challenger, chief executive officer for Chicago consulting firm Challenger, Gray & Christmas Inc.
“This is becoming a factor, and this is going to be a big difference.”
The amount companies are paying in insurance costs is reason enough to be targeting healthy employees. Health insurance premiums grew 78 percent between 2002 and 2007, according to the Kaiser Family Foundation, while the share of premiums paid by workers has held fairly steady.
Between 1999 and 2005, the average cost to employers for health insurance per hour for each employee rose from $1.60 to $2.59. In an average 40-hour week, that's $103.20 spent on health care for each employee.
Obese workers make the situation worse for employers. In addition to missing more days of work, researchers from RTI International have found those with high levels of obesity cost $460 to $2,500 per year in additional medical expenses. The cost of obesity at a company with 1,000 workers was pegged at an extra $285,000 a year, RTI's 2005 study found.
And North Carolina does not supply the leanest workers. According to 2006 data from the N.C. State Center for Health Statistics, 63 percent of North Carolinians are overweight or obese. Mecklenburg County fares only slightly better, with 56 percent of its residents falling into the overweight or obese group.
Orange County – home to Chapel Hill – had the state's leanest residents, with a 52 percent obesity rate. Franklin and Nash counties, northeast of Raleigh, had the highest rate at 74 percent.
Health experts classify people as obese or overweight using a formula called the Body Mass Index, which measures the ratio of a person's weight to height. Information on calculating BMI can be found on the Internet and at doctors' offices. A score of 25 or higher is considered overweight, while 30 or higher is obese.
For example, people who are 5-foot-9 are considered overweight if they weigh 169 pounds or more. A person of that height is considered obese at a weight of 203 pounds or more.
Mary Lilly, a partner with Williamston site selection company Greenfield Associates Inc., said she has not seen the state's obesity rates hurting its ability to recruit companies. But she said it could be a determining factor between similar counties.
“Companies are going to being looking at wellness to lower their health care costs if it will cut their premiums,” Lilly said. “I definitely think it's going to be something that we're looking at.”
Obesity is already hurting N.C. residents' health, but the state's economy could soon be affected as well.
Both, analysts say, are reasons for communities to get serious about their health, and especially their weight.
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