Weight in America: Obesity, Eating Disorders, and Other Health Risks

The Economics of Overweight and Obesity

The Economics of Overweight and Obesity

The economic impact of obesity is considerable. According to the American Obesity Association (AOA), in ''Costs of Obesity'' (May 2, 2005, http://obesity1.tempdomainname.com/treatment/cost.shtml), the World Bank estimates the cost of obesity in the United States was 12% of the national health-care budget in the late 1990s. The increasing prevalence of overweight and obesity in the United States has resulted in a corresponding increase in direct and indirect health-care costs. Direct health-care costs are those incurred for preventive measures, diagnostic, and treatment services. Examples of direct health-care costs are physician office visits, hospital and nursing home charges, prescription drug costs, and special hospital beds to accommodate obese patients. Indirect costs are measured in terms of decreased earnings: lost wages and lower productivity resulting from the inability to work because of illness or disability, as well as the value of future earnings lost by premature mortality (death).

There are also personal costs of obesity: obese workers may earn less than their healthy-weight counterparts because of job discrimination. Many insurance companies, particularly in the life insurance sector, charge higher premiums with increasing degrees of overweight. When obesity compromises physical functioning and limits activities of daily living, affected individuals may require assistance from home health aides, durable medical equipment such as walkers or wheelchairs, or other costly adaptations to accommodate disability.


The National Center for Chronic Disease Prevention and Health Promotion (NCCDHP) calculates and compares in Chronic Disease Prevention(August 16, 2007, http://www.cdc.gov/nccdphp/press/index.htm) the economic burden of several chronic diseases including obesity. Table 7.1 shows that the direct health costs resulting from overweight and obesity—$75 billion—are comparable to those resulting from tobacco use. Because obesity has been linked to all the other chronic conditions described in Table 7.1 except tobacco use, it may be argued that some percentage of the costs attributed to arthritis, cancer, diabetes, heart disease, and stroke are also attributable to obesity. For example, Kathleen M. McTigue et al. estimate in ''Screening and Interventions for Obesity in Adults: Summary of the Evidence for the U.S. Preventive Services Task Force'' (Annals of Internal Medicine, vol.139, no. 11, December 2, 2003) that the direct costs of obesity are 5.7% of the total U.S. health care expenditures; however, the lifetime costs of cardiovascular disease increase by 20% with mild obesity, 50% with moderate obesity, and by almost 200% with clinically severe or extreme obesity. The NCCDHP also reports that hospital costs for treatment of overweight and obese children and teens more than tripled from 1983 to 2003.

According to Anne M. Wolf, JoAnn E. Manson, and Graham A. Colditz, in ''The Economic Impact of Overweight, Obesity, and Weight Loss'' (Robert H. Eckel, ed., Obesity: Mechanisms and Clinical Management, 2003), the estimated annual medical spending attributable to overweight and obesity was about $93 billion in 2002. Wolf, Manson, and Colditz estimate the total cost as $117 billion, with an additional $33 billion spent on weightloss products and services. Estimates of the medical care costs, direct and indirect as well as total cost of overweight and obesity in the United States, vary depending on how the conditions are defined, whether overweight and obesity are considered together or separately, and which costs and obesity-related conditions are included in the estimates and projections. For example, Wolf, Manson, and Colditz's total cost is based on epidemiological studies that defined obesity and overweight as a body mass index (BMI) equal to or greater than 29.

Disease/risk factorsMorbidity (illness)Mortality (death)Direct cost/indirect cost
ArthritisArthritis affects 1 in 5, or 46 million, US adults, making it one of the most common chronic conditions. Over 40%, or nearly 19 million, adults with arthritis and other related rheumatic because of their arthritis. By 2030, nearly 67 million (25%) of U.S. adults will have doctor-diagnosed arthritis. In addition, adults with arthritis-attributable activity limitation are projected to increase from 16.9 million (7.9%) to 25 million (9.3% of the US adult population) by 2030.From 1979-1998, the annual number of arthritis are limited in their activities conditions (AORC) deaths rose from 5,537 to 9,367. In 1998, the crude death rate from AORC was 3.48 per 100,000 population.The total costs attributable to arthritis and other rheumatic conditions (AORC) in the United States in 2003 was approximately $128 billion ($80.8 billion in medical care expenditures and $47 billion in earnings losses). This equaled 1.2% of the 2003 U.S. gross domestic product.
CancerAbout 1.3 million people in the U.S. are diagnosed with cancer each year.Cancer is the second leading cause of death in the United States. In 2003, an estimated 556,000 people died of cancer.NIH (National Institutes of Health) estimates that the overall costs for cancer in the year 2006 at 206 billion: of this amount, $78 billion for direct medical costs and more than $128 billion for indirect costs such as lost productivity.
DiabetesMore than 20.8 million Americans have diabetes, and about 6.2 million don't know that they have the disease.Diabetes is the sixth leading cause of death. Over 200,000 people die each year of diabetes-related complications.The estimated economic cost of diabetes in 2002 was $132 billion. Of this amount, $92 billion was due to direct medical costs and $40 billion to indirect costs such as lost workdays, restricted activity, and disability due to diabetes.
Heart disease and strokeMore than 79 million Americans currently live with a cardiovascular disease.More than 1.4 million Americans die of cardiovascular diseases each year, which amounts to one death every 36 seconds.The cost of cardiovascular disease and stroke in the United States in 2007 is projected to be $431.8 billion including direct and indirect costs.
Overweight/obesityIn 2003-2004 over 66 million adults, or 32% of the adult population, were obese. Over 125 million or 17.1% of children and adolescents 2-19 years of age are overweight.The latest study from CDC (Centers for Disease Control and Prevention) scientists estimates that about 112,000 deaths are associated with obesity each year in the United States.Direct health costs attributable to obesity have been estimated at $52 billion in 1995 and $75 billion in 2003. Among children and adolescents, annual hospital costs related to overweight and obesity more than tripled over the past two decades.
TobaccoAn estimated 45.1 million adults in the United States smoke cigarettes even though this single behavior will result in death or disability for half of all regular users.Tobacco use is responsible for approximately 438,000 deaths each year.The economic burden of tobacco use is enormous: more than $75 billion in medical expenditures and another $92 billion in indirect costs.

In ''State-Level Estimates of Annual Medical Expenditures Attributable to Obesity'' (Obesity Research, vol. 12, no. 1, January 2004), an analysis of medical spending attributable to obesity, Eric A. Finkelstein, Ian C. Fiebelkorn, and Guijing Wang estimate that in 2003 Medicare and Medicaid spent $75 billion treating obesity-related diseases. In this study the researchers calculated statelevel estimates of total, Medicare, and Medicaid obesity-attributable medical expenditures.

According to the press release ''Obesity Costs States Billions in Medical Expenses'' (January 21, 2004, http://www.cdc.gov/od/oc/media/pressrel/r040121.htm) by the Centers for Disease Control and Prevention (CDC), the 1999-2000 National Health and Nutrition Examination Survey indicates that among Medicare recipients, obesity prevalence ranges from 12% in Hawaii to 30% in Washington, D.C. The percentage of annual medical expenditures in each state attributable to obesity ranges from 4% in Arizona to 6.7% in Alaska. Medicare expenditures connected to obesity range from 3.9% in Arizona to 9.8% in Delaware. For Medicaid recipients, the percentages are considerably higher due to the higher prevalence of obesity among Medicaid recipients—from 7.7% in Rhode Island (where 21% of Medicaid recipients are obese) to 15.7% in Indiana (where 44% of Medicaid recipients are obese).

State-level estimates range from totals of $87 million in Wyoming to $7.7 billion in California. Obesity-attributable Medicare estimates range from $15 million in Wyoming to $1.7 billion in California, and Medicaid estimates range from $23 million in Wyoming to $3.5 billion in New York. (It is important to remember that state-level spending is largely a function of population, so it is reasonable that a less populous state such as Wyoming will spend less state and federal dollars than a population-dense state such as California or New York.)

Obesity Costs in New Mexico

Eldo E. Frezza, Mitchell S. Wachtel, and Bradley T. Ewing developed an economic model intended to assess the impact of obesity on a state's economy. They evaluated the cost of obesity in terms of lost business output, employment, and income for the state of New Mexico and reported their findings in ''The Impact of Morbid Obesity on the State Economy: An Initial Evaluation'' (Surgery for Obesity Related Diseases, vol. 2, no. 5, September-October 2006). The investigators find that obesity cost the state more than seventy-three hundred jobs and its economic effect exceeded $1.3 billion-the impact on labor accounted for nearly $200 million and reduced state and local tax revenues totaled more than $48 million—accounting for 2.5% of New Mexico's gross state product.

Obesity Increases Health Expenditures

In ''Differences in Disease Prevalence As a Source of the U.S.-European Health Care Spending Gap'' (Health Affairs, vol. 26, no. 6, October 2, 2007), Kenneth E. Thorpe, David H. Howard, and Katya Galactionova examine spending in the United States and Europe for the ten most costly medical conditions. Their analysis reveals that nearly twice as many adults in the United States are obese compared to those in Europe—33% of Americans, compared to 17% of people in ten of the largest European countries—which results in higher numbers of Americans being afflicted with cancer, diabetes, and other chronic conditions. The treatment of obesity-related chronic diseases adds $100 billion to $150 billion to U.S. annual health expenditures.


Besides estimates of total direct and indirect costs of overweight and obesity, the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK), the U.S. government's lead agency responsible for biomedical research on nutrition and obesity, specifies in Statistics Related to Overweight and Obesity(June 2000, http://www.medhelp.org/NIHlib/GF-367.html) the portion that obesity-related diseases contribute to these costs. In 2000 heart disease related to overweight and obesity generated direct costs of $6.9 billion (17% of the total direct cost of heart disease, independent of stroke), and the total cost of Type 2 diabetes was $63.1 billion (direct cost, $32.4 billion; indirect cost, $30.7 billion). A significant contribution to increasing diabetes-related costs is hospitalization. Table 7.2 shows hospital discharges in 1990, 2000, and 2004 that were attributable to diabetes. Increases were registered among men aged sixty-five to seventyfour and among both men and women aged seventy-five years and over.

In contrast, the total costs of overweight and obesity in 2000 that were related to other types of diseases were: osteoarthritis, $17.2 billion (direct cost, $4.3 billion; indirect cost, $12.9 billion); hypertension (high blood pressure), $3.2 billion (17 percent of the total cost of hypertension); colon cancer, $2.8 billion (direct cost, $1 billion; indirect cost, $1.8 billion); breast cancer, $2.3 billion (direct cost, $840 million; indirect cost, $1.5 billion); and endometrial cancer, $790 million (direct cost, $286 million; indirect cost, $504 million).

According to the Weight-control Information Network (WIN), in Statistics Related to Overweight and Obesity(June 2007, http://win.niddk.nih.gov/publications/PDFs/stat904z.pdf), the cost of lost productivity related to obesity among Americans aged seventeen to sixty-four is about $3.9 billion annually. This dollar figure translates into $239 million in days of restricted activity, $89.5 million in bed-days (days when people remained in bed rather than performing their activities of daily living), $62.7 million in physician office visits, and $39.3 million in lost workdays related to obesity.

In another study, Roland Sturm of the RAND Corporation compares in ''The Effects of Obesity, Smoking, and Problem Drinking on Chronic Medical Problems and Health Care Costs'' (Health Affairs, vol. 21, no. 2, March-April 2002) the effects of obesity, smoking, heavy alcohol consumption, and poverty on chronic health conditions and health expenditures. Sturm finds that obese individuals spent more on both health-care services and medication than daily smokers and heavy drinkers. For example, obese individuals spent about 36% more than the general population on health-care services, compared to a 21% increase for daily smokers and a 14% increase for heavy drinkers. Furthermore, obese people spent 77% more on medications. The only variable with a greater effect on health-care expenditures was aging—and aging trumped obesity only on expenditures for medications. Sturm concludes that obesity generates significantly higher health-care expenditures and affects more individuals than smoking, heavy drinking, or poverty.

Even though it is well documented that obese people incur higher health-care costs at a given point in time, until recently the effects of rising rates of obesity on spending growth had not been quantified. Kenneth E. Thorpe et al. find in ''The Impact of Obesity on Rising Medical Spending'' (Health Affairs, October 20, 2004) that health-care spending was about 36% higher for obese adults under sixty-five. Furthermore, they seek to estimate the share of spending growth attributable to three obesity-related comorbidities (the coexistence of two or more diseases): diabetes, hyperlipidemia, and heart disease including hypertension. Their analysis reveals that increases in the proportion of, and spending on, obese people relative to people of normal weight accounted for 27% of the increase in per capita spending between 1987 and 2001. This increase was attributable to spending for heart disease (41%), diabetes (38%), and hyperlipidemia (22%). Increases in obesity prevalence alone accounted for 12% of the growth in health-care spending. Thorpe et al. conclude that future cost-containment efforts should address the increasing prevalence of obesity and the institution of effective approaches to weight loss for people who are obese.

[Data are based on a sample of hospital records]
DischargesDays of care
Sex, age, and first-listed diagnosis199020002004199020002004
Both sexes Number per 1,000 population
Total, age adjusteda, b125.2113.3118.4818.9557.7568.7
Total, crudeb122.3112.8119.2784.0554.6574.1
All agesa, b113.099.1102.6805.8535.9541.1
Under 18 yearsb46.340.943.6233.6195.6201.5
Injuries and poisoning6.
       Fracture, all sites2.
18-44 yearsb 57.945.046.5351.7217.5225.6
HIV infection**3.0*5.43.9
Alcohol and drugc3.
Serious mental illnessd3.4*5. …