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Obesity costs have been underestimated: What should be done?

Kathleen Blanchard's picture
Obesity costs underestimate, find researchers.

Using new calculation methods, researchers found the amount of money spent on healthcare as the result of obesity has been underestimated. They suggest it’s time for the government to step in and consider the high costs when deciding whether to fund, and how much is needed for obesity prevention programs. According to the new findings, obesity accounts for 21% of healthcare dollars spent, which double the amount found in previous estimates.

The study, published in the January issue of the Journal of Health Economics used the method of instrumental variables (IV) to find obese people spent $2,741 in healthcare dollars in 2005 than they would if they were not obese, or $190.2 billion per year, which is 20.6 percent of national health spending.

Lead author John Cawley, Cornell professor of policy analysis and management and of economics said in a press release, “Obesity raises the risk of cancer, stroke, heart attack and diabetes. For any type of surgery, there are complications with anesthesia, with healing [for the obese]. … Obesity raises the costs of treating almost any medical condition. It adds up very quickly.”

He adds we’ve been underestimating how much obesity really costs. The researchers point out obesity varies among individuals.

Previous estimates showed obesity costs $85.7 billion or 9.1 percent of national health expenditures because previous research just reported the difference between lighter and heavier people.

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Last year the journal Lancet published a series of articles focusing on obesity. Estimates suggested 50 % of the population would be obese by the year 2030, potentially bankrupting societies.

The question from many in response to the articles was does the government have a right to step in? Tim Worstoll of Forbes thinks it’s a person’s right to be obese.

But Cawley and Chad Meyerhoefer of Lehigh University who also authored the study say previous estimates were misleading and the problem is worse than it has appeared.

Cawley gives the following scenario, “For example, I could have injured my back at work, and that may have led me to gain weight. The injury could have led to a lot of health care costs that are due to my back, not my obesity.”

The problem is obesity raises the cost of treating any medical condition, as well as leading to heart disease, diabetes, stroke and cancer. When you factor in complications from obesity the cost is higher than previously shown. The Cornell researchers think it’s time for the government to think about intervening to reduce obesity.

The Journal of Health Economics
"The medical care costs of obesity: An instrumental variables approach"
John Cawley.Chad Meyerhoefer

Image credit: Morguefile