Healthcare savings

We use a 15% healthcare spending reduction based on historical BMI data from our clients. In this section we dive into how we derive that number.

Body Mass Index (BMI): is a simple, low-cost, screening tool used by doctors to estimate body fat and assess potential risks for chronic diseases like diabetes and high blood pressure.

1. Healthcare - BMI Relation: To identify the correlation between healthcare spending and BMI, we use this 2024 NIH study titled "Health Care Spending Associated With Weight Loss in Adults". We take the following steps:
   1. A. Convert reductions in spending from both Employer-Sponsored Health Insurance (Table 2) and Medicare Insurance (Table 3) into percentage terms.
   2. B. Average the two values to provide a balanced estimate of healthcare savings.
   This yields the following table:

   % BMI Reduction	% Healthcare Spending Reduction
   5%	7.67%
   10%	14.74%
   15%	21.26%
   20%	27.27%
   25%	32.82%

2. Healthcare savings formula:
   Using these data points, we plot a chart and fit a linear trendline. The fitted trendline provides the following formula, which allows us to estimate healthcare spending reduction at any given BMI reduction rate (relative to baseline).

   (1.26 % BMI Reduction)

   1.9

   % Healthcare costs saved

   The study reports reductions in healthcare spending across multiple obesity-related conditions. For our calculation, we use only the "≥1 condition" category as a conservative baseline. Actual savings can be significantly higher, but they are highly variable depending on individual health profiles.
3. Calculate healthcare cost reduction:

   From our former Chefshealth clients we got an average starting BMI of 41.95 and an average post-program BMI of 35.79. That's approximately a 15% BMI reduction.

   By plugging that into the trendline formula we get a 20% Healthcare costs saved.

Baseline medical costs

We use a conservative estimate of $8,300 for baseline medical costs. This figure is based on data from the CMS National Health Expenditure by Age and Sex report, which shows that per capita spending for working-age adult males in 2020 was $8,313 (females averaged $9,989). We selected the lower male-based figure to remain conservative.

Historical trends from the CMS NHE Fact Sheet indicate that national health expenditures grew to $14,570 per person in 2023, highlighting that our $8,300 assumption is a cautious baseline well below current averages.

By using this conservative baseline, we aim to avoid overstating costs while still reflecting the significant impact of healthcare expenses on overall employee-related costs.