Of Actuaries and Obesity

I knew a guy who was studying to become an actuary. It can be a very high-paying and lucrative career because — as he told me — “your job is to figure out when everyone dies.”

An extremely simplified explanation, perhaps, but it does catch your attention. These are the folks — part MBA, part statistician, part accountant and part magician — that conjure the numbers that determine insurance premiums, and all aspects of pensions and annuities and related financial products.

Surveys rank actuaries as among the top jobs with a bright future, and for good reason: The pay is phenomenal, the hours good and, as long as there are funerals, job security all but guaranteed.

Kidding aside, actuarial science is pretty exacting, so when a professional actuary throws out numbers, it’s best to take them seriously. A new study from the Society of Actuaries has put a pricetag on the obesity epidemic in the United States. According to the SOA’s research, the total economic cost of overweight and obesity is costing the country $270 billion. The study gauges excess mortality and disability based on the increased need for medical care and loss of economic productivity.

"As actuaries, we are working with the insurance industry to help incentivize consumers through their health plan design to focus on health and wellness,” said Don Behan, an SOA member who helped conduct the study, “which will hopefully help curb the weight and health problems we face today.”

Just this week Refresh profiled the latest partnership between food retailers and the healthcare sector. Already, the food industry seems to be institutionalizing certain aspects of health management, namely, through the pharmacy and through arrangements like the one announced by Food City and the University of Tennessee, or Harris Teeter’s ongoing yourwellness program in conjunction with Carolinas HealthCare System.

These are more than just short-term promotions or club-card discounts. These are full-fledged initiatives designed for a serious role in the managed care system that’s evolving out the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. Diagnosis is best left to the doctor’s office, but the new emphasis on prevention opens up a wide range of possibilities, particularly for a business that already has pharmacists and dietitians on hand. The same goes for maintenance.

Indeed, many retailers have developed strategies that augment a doctor’s visit, with programs focusing on medication therapy management, or family health assessments. These are endeavors that go far beyond the supermarket’s basic role as food purveyor.

SOA researchers also polled 1,000 people online as part of their report, and found that 83% “would be willing to follow a healthy lifestyle, such as participating in a health and wellness program, if incentivized through their health plan.”

This kind of number should motivate supermarket retailers to work more closely with their own insurers to benefit company employees, and to develop new partnerships with regional healthcare providers to assist customer wellness.

And, with this deepening, broadening scope of healthcare options, actuaries are going to find it more difficult to come up with their magic numbers.

[Photo credit: Le Petit Poulailler]