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Obesity Costs

By November 5, 2010Commentary

If you are overweight, you have to be asking yourself “why is everybody always pickin’ on me” in regard to health care costs.  Another report, this time from the National Bureau of Economics Research, examines the costs attributable to obesity.  (NBER Report) These authors use a new method of calculating the costs, called an instrument variable approach, that results in an estimate that the annual cost of treating obesity is $168.4 billion and that it raises per capita annual medical costs by $2,826, compared to other estimates of a $676 increase.

As is well known now, the rate of obesity has increased dramatically over the last thirty years and being obese is associated with a variety of health conditions.  While the authors use MEPS data, they applied a different technique to try to identify true causation versus correlation and to correct for potential bias from self-reported weight.  It appears that the self-reported obesity rate is about 4% lower than the measured one.   One of the findings was that a few very overweight individuals account for a lot of the excess costs of obesity.  The increase in medical costs as weight status rises is significantly greater for women than for men.

One consequence if the researchers’ finding of a higher cost stemming from obesity is that the payoff from weight reduction or obesity prevention programs should be higher than previously believed.  While there undoubtedly is an effect of obesity on health spending, it appears to be largely due to a small percent of people that are grossly overweight, so it should be possible to target interventions more efficiently and with greater return on those individuals.  Care needs to be taken in all these efforts not to stigmatize being overweight any more than it already has been, because that only makes it harder for people to take the actions necessary to improve their health.

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