RTI International - News Release - 5.13.2003
RTI, CDC Study Shows Obesity, Overweight Conditions Contribute as Much as $93 Billion to National Medical Bill
Study Shows Medicare and Medicaid Are Financing Half the Burden
Washington, D.C. -- A study conducted by economists from RTI International and the U.S. Centers for Disease Control and Prevention (CDC) demonstrates that obesity and overweight conditions, which affect more than half of Americans, contribute as much as $93 billion to the nation's yearly medical bill. Public payers -- Medicare and Medicaid -- finance about half of these costs, as reported in a May 14 Web-exclusive article in the journal Health Affairs.
Eric Finkelstein and Ian Fiebelkorn of RTI and Guijing Wang of CDC computed the amount of medical spending associated with being overweight and obese. Their data, based on a nationally representative sample of 9,867 adults aged 19 and older, were derived from the 1998 Medical Expenditure Panel Survey linked to the 1996 and 1997 National Health Interview Surveys.
Funded by CDC, the study is the first of its kind to assess the effect of being overweight and obese on select payers, including individuals, private insurers, Medicare, and Medicaid. Based on individual self-reports, Medicaid recipients had the highest prevalence of obesity, nearly 10 percentage points higher than the national average. The combined prevalence of overweight and obesity averages 53.6 percent across all insurance categories but is largest for those enrolled in Medicare (56.1 percent). Because obesity is associated with chronic diseases such as cancer, heart disease, and diabetes, obesity-related expenditures among seniors are expected to be significantly higher than the costs of obesity among younger populations.
In fact, the analysis shows that the per capita increase associated with obese Medicare recipients is $1,486 annually. Obese Medicaid recipients had the next highest per capita increase, at $864 per person, whereas the increase among the obese with private insurance was $423. The higher prevalence and larger increase associated with obesity among Medicaid recipients may be because low-income individuals who qualify for this program are more likely to engage in riskier behaviors such as lack of exercise, poor nutrition, smoking, or alcohol consumption. The average increase in annual expenditures associated with obesity in the entire adult population is $732 per person, or 37.4 percent.
Finkelstein says the findings reveal the extent to which the public sector is financing obesity-related costs. "There has been a debate about whether obesity is a personal or societal issue and whether the government has any business being involved," he says. "The fact that the government, and ultimately the tax payer, is financing half the economic burden of obesity, suggests that the government has a clear justification to try to reduce obesity rates," he adds.
Annual medical spending associated with being overweight or obese comprises 9.1 percent of what the U.S. spends on medical care, comparable to what is now spent on medical conditions linked to smoking. The authors say that, as with smoking, the findings offer private and public insurers a "clear motivation" to consider strategies aimed at reducing the prevalence of obesity. They note that many health insurers, including Medicaid, offer smoking cessation treatment as a benefit and some private insurers charge smokers higher rates.
"Obesity is as costly to society as smoking, and unfortunately, politically feasible strategies that cost-effectively reduce obesity rates have yet to be identified," says Finkelstein. With the prevalence of obesity increasing by 70 percent over the past decade, Finkelstein says the expenditure estimates should be a wake-up call. "Obesity-attributable expenditures will likely continue to increase unless something fairly drastic is done," he adds.
An op-ed piece by study co-author Eric Finkelstein, "We all pay for obesity," was published in the May 19 edition of The Philadelphia Inquirer. In addition, Finkelstein was interviewed on National Public Radio (NPR). To hear this interview, which aired May 15 on All Things Considered, listen to the following audio file.