Overweight and Obesity
Economic Consequences

Overview

Overweight and obesity are an important health issue in the United States. The prevalence of obesity has increased substantially over the last 2 decades. In 1999–2000, an estimated 31% of U.S. adults aged 20 years and older — nearly 59 million people — were obese, defined as having a body mass index (BMI) of 30 or more (NHANES 1999–2000). Research studies have shown that obesity increases the risk of developing a number of health conditions including type 2 diabetes, hypertension, coronary heart disease, ischemic stroke, colon cancer, post menopausal breast cancer, endometrial cancer, gall bladder-disease, osteoarthritis, and obstructive sleep apnea.

Overweight and obesity and their associated health problems have a significant economic impact on the U.S. Health care system (USDHHS, 2001). Medical costs associated with overweight and obesity may involve direct and indirect costs (Wolf and Colditz, 1998; Wolf, 1998). Direct medical costs may include preventive, diagnostic, and treatment services related to obesity. Indirect costs relate to morbidity and mortality costs. Morbidity costs are defined as the value of income lost from decreased productivity, restricted activity, absenteeism, and bed days. Mortality costs are the value of future income lost by premature death.

National Estimated Cost of Obesity

 According to a study of national costs attributed to both overweight (BMI 25–29.9) and obesity (BMI greater than 30), medical expenses accounted for 9.1 percent of total U.S. medical expenditures in 1998 and may have reached as high as $78.5 billion ($92.6 billion in 2002 dollars) (Finkelstein, Fiebelkorn, and Wang, 2003). Approximately half of these costs were paid by Medicaid and Medicare. The primary data sets used to develop the spending estimates for this study included the 1998 Medical Expenditure Panel Survey (MEPS) and the 1996 and 1997 National Health Interview Surveys (NHIS). The data also included information about each person’s health insurance status and sociodemographic characteristics.

Table 1, Aggregate Medical Spending, in Billions of Dollars, Attributable to Overweight and Obesity, By Insurance Status and Data Source, 1996–1998

Note: Calculations based on data from the 1998 Medical Expenditure Panel Survey merged with the 1996 and 1997 National Health Interview Surveys, and health care expenditures data from National Health Accounts (NHA). MEPS estimates do not include spending for institutionalized populations, including nursing home residents.
Source: Finkelstein, Fiebelkorn, and Wang, 2003

As shown in Table 1, in 1998 aggregate adult medical expenditures attributable to overweight and obesity is estimated to be $51.5 billion using MEPS data and $78.5 billion using 1998 National Health Accounts (NHA) data. For obesity alone, the estimated costs are $26.8 billion and $47.5 billion, respectively. The inclusion of nursing home expenditures in the NHA estimates causes most of the difference between the MEPS and NHA results.

State-level Estimated Costs of Obesity

A more recent study focused on state-level estimates of total, Medicare and Medicaid obesity attributable medical expenditures (Finkelstein, Fiebelkorn, and Wang, 2004). Researchers used the 1998 MEPS linked to the 1996 and 1997 NHIS, and three years of data (1998–2000) from the Behavioral Risk Factor Surveillance System (BRFSS) to predict annual state level estimates of medical expenditures attributable to obesity (BMI greater than 30).

State-level estimates range from $87 million (Wyoming) to $7.7 billion (California). Obesity-attributable Medicare estimates range from $15 million (Wyoming) to $1.7 billion (California), and obesity-attributable Medicaid expenditures range from $23 million (Wyoming) to $3.5 billion (New York). The state differences in obesity-attributable expenditures are partly driven by the differences in the size of each state’s population.

These state-level estimates can assist state policymakers to determine how best to allocate public health resources and provide information concerning the economic impact of obesity in a state. However, these estimates should not be used to make comparisons across states, or between payers within states. In addition, these state-estimated data are limited to direct medical costs, as defined above, and not indirect costs (example: absenteeism and decreased productivity) attributed to obesity.

Table 2 shows the estimated percentage of total, Medicare, and Medicaid adult medical expenses that are attributable to obesity.

Table 2, Estimated Adult Obesity-attributable Percentages and Expenditures by State (BRFSS 1998 to 2000)

*Estimates based on fewer than 20 observations.
Source: Finkelstein, Fiebelkorn, and Wang, 2004

References

(NHANES) National Health and Nutrition Examination Survey 1999–2000

Finkelstein, EA, Fiebelkorn, IC, Wang, G. National medical spending attributable to overweight and obesity: How much, and who’s paying? Health Affairs 2003;W3;219–226.

Finkelstein, EA, Fiebelkorn, IC, Wang, G. State-Level Estimates of Annual Medical Expenditures Attributable to Obesity. Obesity Research 2004;12(1):18–24.

U.S. Department of Health and Human Services. The Surgeon General's call to action to prevent and decrease overweight and obesity. [Rockville, MD]: U.S. Department of Health and Human Services, Public Health Service, Office of the Surgeon General; [2001]. Available from: US GPO, Washington.

Wolf AM, Colditz GA. Current estimates of the economic cost of obesity in the United States. Obesity Research.1998;6(2):97–106.

Wolf, A. What is the economic case for treating obesity? Obesity Research. 1998;6(suppl)2S–7S.
 

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