Background of the study
Obesity is a health complication associated with the excessive deposition of fats in adipose tissue. Relative to the body mass index (BMI), obesity is a term used to refer to persons with a BMI of 30-40. Conversely, obese individuals can be grouped into three categories, which include severe obesity (60 pounds of body weight), morbid obesity (100 pounds of body weight), and super obesity (200 pounds of body weight).
Moreover, statistical studies show that the average number of obese individuals in the United States was about 44 million as of 2001 (Clifton, 2007). Unfortunately, the number has been increasing steadily contrary to the objectives of Healthy People 2010. As a result, about one out of five individuals in the United States are obese.
Consequently, the U.S spends about 9% of the total health care cost in providing direct medical care to persons with obesity-related complications and inactivity. That is, the country spends more than $ 117 billion per year to cater to the needs of the obese population (Clifton, 2007).
In addition, obesity claims approximately 300,000 lives annually. At the workplace, obesity contributes to an average loss of 39 million workdays annually and an additional 239 million days in terms of restricted activities for obese employees. Moreover, approximately 90 million days and an additional 63 million days per year are lost when obese employees take bed rest and physician visits respectively (Clifton, 2007, p. 1).
As a result, obesity costs U.S. Companies more than $ 13 billion per annum. These costs cater for workers’ comp claims, medical costs associated with those claims, lost work days, and work-related injuries. Therefore, there is the need for these companies to implement various health promotion programs for their employees to reduce cases of obesity-related injuries and complications at the workplace, the number of lost work-days, medical expenses, and improve productivity.
This essay assesses the financial feasibility of establishing a workout gym at the workplace in an effort to promote health, reduce cases of obesity, and improve the welfare of workers and the financial status of the Company. Therefore, the essay presents the basic budget for establishing the gym and explores the benefits of this project using the cost-benefit analysis method. Finally, the essay presents discussions on the importance of carrying out the project based on the results of the cost-benefit analysis.
The Operating Budget
|ITEM/EXPENSE||COST (in USD)|
|Fixed Expense ||10,000 |
|Total Fixed Expenses||56,320||12,000||12,000||12,000|
|Variable Expenses ||240 |
|Total Variable Expenses||3640||3480||3405||3320|
|Controllable Expenses ||22,360 |
|Total Controllable Expenses||90,360||39,500||38,000||36,000|
|Unrecoverable Expenses ||60,000 |
|Total Unrecoverable Expenses||60,720||60,720||60,720||60,720|
The Cost-Benefit Analysis
This pilot project aims at establishing a work-out gymnasium that caters for more than 300 employees at the workplace. Therefore, the gym provides all the basic services offered by a standard fitness facility such as on-site exercise classes, fitness assessment, provision of healthy meals, nutrition counseling, medical evaluation, and other health promoting activities, which are designed to meet the personal health goals of each member (Blais et al., 2006; Finkler & McHugh, 2007).
Moreover, all employees within a particular organization will be given free membership in the gym for a period of two years. Therefore, the total cost incurred in establishing the gym amounts to $ 552,905 per annum.
According to Clifton (2007, p. 1), the medical claims made by obese employees are twice the claims filed by non-obese workers. Therefore, the study shows that the expenses incurred in providing direct medical care to obese workers add up to about $ 51, 019 per 100 workers per annum (or approximately $ 5,100 per worker per annum). Conversely, the average medical cost for non-obese workers is approximately $ 7,503 per 100 workers per annum (or approximately $ 75 per worker per annum).
Therefore, the health promotion project presented in this essay aims at serving approximately 200 obese and 100 non-obese workers at a total cost of $ 552, 905. Relative to earlier discussions, if the 300 employees were to remain inactive, a particular organization could spend up to $ 1,027,500 in direct medical claims per annum.
Therefore, initiation of regular physical exercises and health assessment activities in a group of 300 employees could benefit both the workers and their respective organizations in terms of reducing the total medical cost by a margin of $ 474,595 per annum ($ 1,027,500- $ 552,905). In addition, there will be fewer sick days and lost work-days, increased productivity, and low absenteeism.
The importance of establishing a Gymnasium at the Workplace
From the discussions above, it is notable that establishing a gymnasium at the workplace presents inactive workers with the opportunity of carrying out regular physical activities and other personalized exercises that promote health, prolong life, and increase productivity. In addition, the services offered by the gym especially the provision of healthy meals encourage obese employees to change their lifestyles and eating habits (Teitelbaum & Wilensky, 2007).
Therefore, considering the above-mentioned benefits, it is worth carrying out the proposed project because it enables a particular organization employing obese workers to save on the cost incurred in direct medical claims filed by the workers.
Furthermore, the cost-benefit analysis shows that the proposed project is financially feasible. That is, for each dollar spent, approximately two dollars are saved ($ 552,905: $1,027,500). In addition, any particular organization that undertakes such a project will experience reduced sick-days among its workers, which then follows that the workers will be productive and economically stable. Overall, the company would not only improve its revenues by paying less for workers’ medical expenses, but it will also contribute to the reduction of the national annual medical expenses on obesity by as much as $ 76.6 billion (Clifton, 2007).
The essay presents discussions on the benefits of establishing a workout gymnasium at the workplace with the aim of promoting health and increasing productivity among inactive workers. Therefore, the essay assesses the financial feasibility of the proposed project through the cost-benefit analysis method.
From the discussions above, it is worth noting that the availability of a standard gym at the workplace provides workers with the opportunity of engaging in regular physical activities that promote their health, reduce cases of obesity, and increase their productivity. As a result, healthy and active workers contribute to the growth of their respective organizations through reduced medical claims, sick days, work-related accidents, and increased productivity.
Blais, K., Hayes, J., Kozier, B. & Erb, G. (2006). Professional Nursing Practice Concepts and Perspectives. Upper Saddle River, NJ: Prentice Hall.
Clifton, J. (2007). The heavy, heavy burden of obesity: Obesity increases the cost of workers’ compensation claims and the risk of traumatic workplace injuries, new survey show. CBS Interactive Inc. Web.
Finkler, S. & McHugh, M. (2007) Budgeting Concepts for Nurse Managers. St. Louis, MO: Saunders Elsevier.
Teitelbaum, J. & Wilensky, S. (2007). Essentials of health policy and law. Sudbury, MA Jones and Bartlett.