Health Care Costs

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A RAND study has calculated that the costs imposed on society by people with sedentary lifestyles (i.e., the "external" costs generated) may be greater than those imposed by smokers (Keeler et al., 1989). More recent computations of national health-care expenditures related to obesity and overweight in adults showed large lifetime external costs related to these conditions. After adjusting for inflation and converting estimates to 2004 dollars, the national direct and indirect health-care costs related to overweight and obesity range from $98 billion (Finkelstein et al., 2003) to $129 billion (DHHS, 2001a).6 It has been suggested that overweight and obesity may account for nearly one-third (27 to 31 percent) of total direct costs related to 15 co-morbid diseases (Lewin Group, 2000) and account for 9

6The $98 billion is based on an estimate of $93 billion in year 2002 dollars (Finkelstein et al., 2003) and the $129 billion is based on an estimate of $117 billion in year 2000 dollars (DHHS, 2001a) calculated from the 2004 Consumer Price Index (U.S. Bureau of Labor Statistics, 2004).

TABLE 2-1 Physical, Social, and Emotional Health Consequences of Obesity in Children and Youth

Physical Health

• Glucose intolerance and insulin resistance


• Dyslipidemia

• Hepatic steatosis

• Cholelithiasis

• Menstrual abnormalities

• Impaired balance

• Orthopedic problems Emotional Health

• Negative body image

• Depression

Social Health

• Negative stereotyping

• Discrimination

• Teasing and bullying

• Social marginalization percent of total U.S. medical spending (Finkelstein et al., 2003). Less than a decade ago, by contrast, the estimated direct health-care costs attributable to obesity ranged from 1 to 6 percent of total health-care expenditures, depending on the definition of obesity and the methods of calculation used (Seidell, 1995; Wolf and Colditz, 1998). Annual medical expenditures in the United States related to obesity are estimated at $75 billion (in 2003 dollars) with approximately half of the expenditures financed by Medicaid and Medicare (Finkelstein et al., 2004). California, the most populous state, spent the most in public funds on health care for obese people in that year, a total of $7.7 billion (Finkelstein et al., 2004).

The direct health-care costs of physical inactivity, which contribute to the obesity epidemic, have been estimated to exceed $77 billion annually (Pratt et al., 2000). In addition, there are indirect costs of physical inactivity, such as those associated with dependence on motorized travel. For example, the national cost of traffic congestion in 2002 was estimated at 3.5 billion hours of delay, costing the nation $69.5 billion—an increase of $4.5 billion from the previous year (Schrank and Lomax, 2003).

Additionally, the estimated national health-care expenditures for Americans with diabetes exceeded $132 billion in 2002, and it has been suggested that people with diabetes have health-care costs that are on average 2.4 times higher than those of people without diabetes (ADA, 2003). Obesity-linked type 2 diabetes, by far the most common form of the disease, is largely preventable. The cost of obesity has recently been compared to other health-care costs, and research suggests that it outranks both smoking and drinking in adverse health effects and health-care costs, adding an average of $395 per patient per year to health-care costs (Sturm, 2002).

The direct economic burden of obesity in youth aged 6 to 17 years has been estimated, based on the 1979-1999 National Hospital Discharge Survey (Wang and Dietz, 2002). Obesity-associated hospital costs were determined from hospital discharges that listed obesity as either the primary or secondary diagnosis. Results indicate that the percentage of discharges with obesity-related diseases increased dramatically from 1979-1981 to 19971999. Discharges for diabetes doubled, gallbladder disease tripled, and sleep apnea increased five-fold during this time frame. In 2001 dollars, obesity-associated annual hospital costs for children and youth were estimated to have more than tripled from $35 million (1979-1981) to $127 million (1997-1999) (Wang and Dietz, 2002).

In 2000, the United States spent approximately 14 percent of its gross national product on health care—representing the largest share for any developed country over the past decade—and its per capita health-care expenditures were greater than those of any other nation (OECD Health Data, 2003). But although it is estimated that preventive measures could impact 70 percent of the causes of early deaths in the United States (McGinnis et al., 2002), most of the $1.4 trillion that the United States spends per year on health is used for direct medical care service. The national investment in preventing disease and promoting health is estimated to be only 5 percent of the total annual health-care costs (DHHS, 2001b; Kelley et al., 2004). This imbalance underscores the need for the health-care systems in the United States to establish a greater preventive orientation (Mokdad et al., 2004), particularly for childhood obesity, a largely preventable condition that has been shown to be a major determinant of healthcare costs.

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