Arizona’s Obesity Fee: Can It Save Medicaid?

Airlines, in their constant search for new revenue sources, have successfully introduced a wide variety of new fees. A snack, for instance, will now cost you $3 or more on American Airlines. And United will now charge you $25 to check your first bag.

Municipalities, starved for cash, have jumped on the nickel-and-diming bandwagon as well. A participant in a traffic accident in Toledo, Ohio, for instance, will now pay several hundred dollars for a “crash tax” to fund emergency services. And Mayor Michael Bloomberg of New York City recently proposed a similar fee for residents and visitors involved in automobile crashes, regardless of fault.

But a fee for being obese? That’s the latest idea that Governor Jan Brewer has proposed for reinventing the Medicaid system in Arizona. Once each year, under her proposal, physicians would report the names of obese patients to the state; each patient would then receive a penalty invoice of $50.

Can this proposal actually work? How would it change the current system?

The Conundrum of Measurement

One challenge that would be confronted while implementing this policy, of course, involves the need to reach an agreement on the definition of obesity. Most physicians utilize the Body Mass Index (BMI) formula to establish obesity; according to the National Institutes of Health, for instance, a six foot tall man or woman would be considered obese at a body weight of 221 pounds.

The problem with this approach, however, is that it is often misleading to establish a target “healthy weight” on the basis of physical height alone, even though height is the sole criterion that is utilized by the BMI formula. Under such an approach, a large majority of all of the players in the National Football League — a physically fit bunch, indeed! — would be declared obese.

Various private self-help services use waist, hip, and neck sizes to estimate body fat composition percentages. But these are all merely estimates, not the type of precise measurements on which it may be appropriate to base government fees of any kind.

Nevertheless, even if the measurement conundrum is settled, a second question must be considered: how would an obesity fee impact the current system?

Gaming The System

An impact analysis is important because any measurement based reimbursement or fee policy is vulnerable to exploitation and manipulation by individuals who seek to “game” the system. Public education’s No Child Left Behind system, for instance, has been plagued by teachers who “teach to the test,” as well as by schools that simply expel low scoring students.

Similarly, an annual obesity fee based on an annual weight measurement may compel consumers to seek out unhealthy “fad” diets solely to pass an annual weight test. And after each test, such consumers may (as is often the case with “fad” diet followers) go on eating binges, creating drastic weight fluctuations that can actually exacerbate conditions like diabetes.

Furthermore, would physicians shy away from accepting obese consumers of any kind out of concern that they might themselves be confronted with obesity penalty fees as well? And would physicians feel comfortable “snitching” on their patients if they are required to report the obese individuals to the government? Even the slender and fit among us may not want our personal physicians to function as “weight police” for state bureaucrats!

National standards of health care quality, such as the National Committee on Quality Assurance’s HEDIS standards, do indeed define and measure performance measurements regarding weight counseling services that are financed by health insurers and delivered by medical providers to obese and overweight consumers. But a penalty-based system that relies on physicians for reporting purposes is far different than an incentive-based system that emphasizes provider education.

A Question of Human Behavior

Ultimately, of course, there are two reasons why any governmental entity may choose to institute penalty fees on any individual. One, quite simply, is to raise revenues. And two, perhaps with more subtlety, is to attempt to modify human behavior.

It is hard to imagine a more awkward method for raising state revenues than to convert physicians into “weight police” who report obese consumers to government officials. Indeed, Governor Brewer has not emphasized this element of her policy; instead, she has chosen to defend her proposal as an incentive system for encouraging Medicaid patients to “take greater control of their health.”

But will people who are behaviorally inclined to snack on chocolate and pizza be incentivized to climb on a treadmill in February out of concern that they might be charged $50 in December? How many among us — even the most physically fit of us — actually maintain our New Year’s resolutions to lose a few pounds as time progresses beyond the second week of January?

The potential success of this plan may simply come down to a question of human behavior. Unfortunately, though, it was our behavioral failings that led to the very rise of obesity in the first place.