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    Columns

    Weighty Matters: Implications for Repeal of the Affordable Care Act

    Based on current trends, obesity-related medical costs could increase to $256 billion by 2030.

    Weighty Matters: Implications for Repeal of the Affordable Care Act
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    Greg Stephens, Windrose Partners, & Sheila Campbell, PhD, RD04.03.17
    We’ve heard the startling statistics—more than one-third of U.S. adults are clinically obese. And we are aware of the obesity-related health conditions: heart disease, stroke, Type 2 diabetes, certain types of cancer, etc. These conditions are among the leading causes of preventable death in the U.S. The medical costs of obesity and associated conditions amount to an astounding $190 billion. That’s over 20% of total U.S. healthcare costs. It’s not just private insurance companies footing the bill, Medicare and Medicaid are spending nearly $62 billion annually on obesity-related costs.

    According to researchers at Columbia University, if current trends don’t change, these obesity-related medical costs will increase to $256 billion by 2030. A Brookings Institution study calculated that obese Americans pay 105% more for prescription drugs than non-obese individuals. Considering this, it’s not surprising that prevention may not be a priority for the pharmaceutical industry.

    Employers, on the other hand, are extremely concerned. Actuaries estimate that U.S. employers lose $164 billion in productivity each year due to obesity-related issues. Further, the Robert Wood Johnson Foundation predicted these productivity losses will hit $580 billion by 2030 unless the situation changes.

    Of course, the commercial weight loss and management industry remains big business. The global market is expected to reach $206.4 billion by 2019, from $148.1 billion in 2014, reflecting a CAGR of 6.9%.

    In 2015, the value of the U.S. market was $59.8 billion, declining slightly from 2014 due to slumping diet soft drink sales and flat performance in weight loss centers. At the same time, medical weight loss programs and the meal replacement market continued to thrive.

    Weight-Loss & the Affordable Care Act (ACA)
    The American Medical Association, the American Society for Metabolic and Bariatric Surgery, and the American Heart Association define obesity as a disease. Obesity, therefore, can be classified as a pre-existing condition. Nearly 53 million Americans are obese and fall under this pre-existing condition category.

    Before enactment of the Affordable Care Act (ACA), also known as ObamaCare, insurance companies could deny healthcare coverage to people who had pre-existing conditions. These denials potentially affected a total of 50 million people, including 17 million children.

    The ACA increased the number of people who currently have healthcare insurance, which covers pre-existing conditions, including obesity. Figure 1 shows that the number of Americans without health insurance dropped significantly from about 17% three years prior to enactment of the ACA, to just below 11% in the fourth quarter of 2016. Repeal of the ACA may mean that many of these people will again be without health insurance. Loss of coverage for pre-existing conditions is likely to also encourage other healthcare insurers to deny coverage for pre-existing conditions, including obesity.

    ACA Repeal and Replace
    As of March, the latest version of the House replacement bill includes these provisions: (At this point, the provision to cover pre-existing conditions is retained.)
    • Tax credits based on age, but it wouldn’t allow wealthier Americans to qualify for the tax credits. No specific cut-offs have been proposed yet.
    • Eliminating many of ObamaCare’s taxes.
    • Extending the lifetime of health plans that pre-dated ObamaCare and don’t meet many of the law’s requirements.
    • Creating a “reinsurance” fund for states to help shore up the individual health insurance market. The bill would grant states the ability to reimburse insurance companies from the fund if medical claims of covered individuals are between $50,000 and $350,000.
    AND Opposition
    The Academy of Nutrition and Dietetics, the world’s largest organization of food and nutrition professionals, announced its opposition to the American Health Care Act on March 13.

    In a letter to the chairmen and ranking members of the House Ways and Means Committee and the Energy and Commerce Committee, Academy President Lucille Beseler, RDN (Registered Dietitian Nutritionist) wrote, the current version of the bill “fails to improve the health of all Americans” and will “worsen patient care and public health.”

    Moving Forward: Dietary Supplements & Medical Weight Loss
    The Office of Dietary Supplements (ODS) in the National Institutes of Health supports that the use of weight loss supplements in the U.S. is a common practice. About 15% of U.S. adults have used a weight loss dietary supplement at some point in their lives, with more women reporting use (20.6%) than men (9.7%). We often think weight loss is predominantly a market that targets women, but 73% of men in the U.S. are overweight, compared to only 63% of women. In addition to higher supplement use for weight loss, memberships in weight loss programs are dominated by women—an estimated 90% of Weight Watchers members are women. The discussion about why can be long and varied, but the fact remains that men are overweight and have still barely been touched by weight loss services.

    Consumers spend about $2 billion a year on weight loss dietary supplements in pill form (e.g., tablets, capsules, and softgels), and to lose weight is one of the top 20 reasons why consumers report using dietary supplements. In addition to dietary supplements, medical weight loss products and services have been available for decades. Not including bariatric surgery and pharmaceuticals, medical weight loss is a $1+ billion market, primarily operated by hospitals, clinics and physician’s offices.

    Conclusion
    Should preventive care measures remain in the new version of the ACA, the opportunity for weight loss supplements and programs in the health practitioner channel should be ripe for expansion. There are three mega-trends currently affecting the U.S. weight loss market, according to Marketdata Enterprises’ report “Medical Weight Loss Programs: A Growth Market.”
    • Medical weight loss programs are increasing in importance, taking share from commercial programs.
    • There is a paradigm shift with less emphasis on diet food and more on behavior modification, physical activity and related services.
    • Programs are shifting to non-traditional sites.
    Currently, the ACA preventive health benefits mandate coverage for obesity screening and counselling in 23 states by qualified weight loss providers. This mandate requires insurers pay for weight loss programs for people with BMI of 30+ and to be counseled by “qualified weight loss professionals,” (e.g., MDs, RDs, nurses).

    Adding weight loss to a qualified health practitioner’s site is a logical extension of services. Patients have a trust in their practitioner, the practitioner has a customer base, and qualified professionals should be better able to treat obesity and the comorbidity conditions than the commercial chains.


    Gregory Stephens
    Windrose Partners

    Greg Stephens, RD, is president of Windrose Partners, a company serving clients in the the dietary supplement, functional food and natural product industries. Formerly vice president of strategic consulting with The Natural Marketing Institute (NMI) and Vice President of Sales and Marketing for Nurture, Inc (OatVantage), he has 25 years of specialized expertise in the nutritional and pharmaceutical industries. His prior experience includes a progressive series of senior management positions with Abbott Nutrition (Ross Products Division of Abbott Laboratories), including development of global nutrition strategies for disease-specific growth platforms and business development for Abbott’s medical foods portfolio. He can be reached at 267-432-2696; E-mail: gregstephens@windrosepartners.com.

    Sheila Campbell
    Sheila Campbell, PhD, RD, has practiced in the field of clinical nutrition for more than 30 years, including 17 years with Ross Products Division of Abbott Laboratories. She has authored more than 70 publications on scientific, clinical and medical topics and has presented 60 domestic and international lectures on health-related topics. She can be reached at smcampbellphdrd@gmail.com.
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