Obesity puts a burden on so many aspects of life that the socioeconomic cost is almost inevitably enormous—as well as very difficult to accurately pin down. At the individual level, there is the lower quality of life, days missed from work, decreased wages, premature retirement, potentially unemployment, and the medical costs of related illnesses, which may include depression, cardiovascular disease, joint and arthritic problems, diabetes, stroke, etc. At the societal level, there is the mounting healthcare bill, as well as the increased costs falling upon employers due to missed work days. The healthcare bill would increase even if no one in the US was obese, because of the wave of aging baby boomers. But add to this wave the additional costs of treating the co-morbidities of obesity, and the magnitude of the wave increases significantly.
Direct costs are commonly defined as the costs of treating obesity and the diseases that can be associated with it. This includes but is not limited to the relative portion of the costs of treating hypertension, depression, cardiovascular disease, several types of cancer and osteoarthritis which can be attributed directly to obesity; prescription drugs for weight loss; and bariatric surgery. It also includes the cost of visits to physicians and clinics, hospital admissions and outpatient treatments.
Indirect costs include the cost of earnings lost due to absence from work because of illness associated with obesity. Indirect costs also include the cost of premature mortality. As can be imagined, these costs are much more difficult to estimate, as the methodologies and the statistics may vary from country to country, and, within a country, from agency to agency and from year to year. Of course, it is impossible to put a price on the loss of a life, but statistics allow an approximation of various ‘business’ aspects of the cost. For example, if someone dies from obesity before the age of retirement, then the cost of lost years of employment should also be factored in.
Difficulty of Calculating Costs and Morbidity
In 2004, the media reported that the annual cost of all treatments of obesity in the US tipped the scales at $117 billion, and that over 400,000 people died every year from causes directly related to obesity. These numbers appeared everywhere, and took on an air of veracity due both to the solid reputation of the source (the Centers for Disease Control and Prevention) and the repetition. Unfortunately, these numbers were wrong.
The source of the numbers was a 1999 report in the Journal of the American Medical Association by David B. Allison and others. Allison apparently made unreasonably huge extrapolations from a relatively small sample of actual measurements, and concluded that some 300,000 deaths per year could be attributed to obesity. Then in March 2004, the CDC produced a paper which put this number even higher, to over 400,000. Scientists who had criticized the Allison results became even more vociferous after publication of the CDC paper; under a storm of criticism, the CDC finally revised their study nearly a year later (January 2005), bringing the number of annual deaths down to 365,000. The debate continues, though, as different analysts and scientists use different sets of numbers; the current ‘guestimate’ for the number of deaths attributable to obesity ranges from 7,000 to around 122,000 per year.
There is also the argument, put forth by groups such as the Center for Consumer Freedom (CCF) in the US, which says that the entire so-called ‘obesity epidemic’ is being grossly over inflated. They accuse pharmaceutical and medical device companies of catastrophizing the situation so as to incite the government to improve insurance coverage for treatment drugs and devices.
Real Costs, Real Morbidity
The costs and the morbidity from obesity are real, though. One medical journal, Obesity Research, estimates that US obesity treatments, which may range from clinic visits ($10-$50 per visit) to gastric bypass operations ($20,000-$35,000), cost each adult in the US about $350 per year. Over 50% of this cost is borne by taxpayers through the Medicare and Medicaid programs. The World Bank has estimated that the cost of obesity in the US is about 12% of the US national healthcare budget, or about $70 billion—per year. Whatever the exact figures, it is apparent that, left unchecked, there will be costs hitting many healthcare systems worldwide which most are ill prepared to absorb.
Impact on Businesses/Economies
Much research continues to take place into the theoretical and real costs of obesity and how these costs impact national economies. The obvious implication is that the greater the costs, the greater the negative impact on the national economy, and the more urgent the need to address the issue earlier rather than later. The exhibit below shows estimates of annual costs for several major economies. Even given the caveat that calculations of estimates vary by country, year and data used, the picture does not look encouraging. The majority of the studies of the economic impact of obesity has been conducted using the US population; hence, much of the data which follows looks at the US information.
Examples of Annual National Costs of Obesity (US$ Millions)
Estimated number of premature deaths due to obesity
Estimated Direct Cost of Obesity
Estimated Indirect Cost of Obesity
Source: MedMarket Diligence, LLC
Drawn from Report #S825, "Worldwide Market for the Clinical Management of Obesity, 2007-2015." Published by MedMarket Diligence.