The Cost of Obesity

Prepared by: Abe Matamoros

Table of Contents
Executive Summary...3 Introduction..4 Research Methods.7 Results Task 1: Research specific factors that cause prices to go up...8 Task 2: Interview healthcare professional....9 Task 3: Put obesity related expenditures into perspective..11 Task 4: Research what will happen if action is not taken....12 Task 5: Explain how the higher obesity rates result in the change of the supply and demand of unhealthy foods, and how this economic change results in even higher obesity rates..13 Conclusion.14 Appendix.16 Bibliography.12

Executive Summary
The role of this research project is to discuss the economic implications of having an obese country. To perform this research, data was gathered from the Center for Disease Control and Prevention, The United States Department of Agriculture, the Stop Obesity Alliance website, the research paper, The Future Cost of Obesity by Kenneth E. Thorpe, and an interview with gynecologist, Dr. Karpen. After a thorough analysis of the obesity epidemic, the research revealed that if the United States maintains an increase in obesity rates, there will be catastrophic economic implications and social problems. Our life expectancy will start decreasing, and health care costs will be so high, that we will be forced to make drastic changes to not only the health care system, but also the American way of life. The United States needs to decide to make sweeping changes before we let the situation get so out of hand, that we are forced to change.

Introduction
Today, more than one third of US adults and approximately 17% of children are overweight.1 According to the Center for Disease Control and Prevention, in 1989, 12 % of American adults were obese; now, 35.7 % of adults are obese. This has created an obesity epidemic that has become the number one killer in the United States. Figure 1 in appendix, shows how obesity rates are increasing over time and how much they are predicted to grow. Overweight and obesity are both labels for ranges of weight that are greater than what is generally considered healthy for a given height. The terms also identify ranges of weight that have been shown to increase the likelihood of certain diseases and other health problems.2 A common way to establish whether someone is obese, overweight, of normal weight, or underweight, is by measuring their body mass index. By taking into consideration ones height and weight, the BMI is usually an accurate way to establish ones weight class. For more information regarding how BMI is calculated and how weight classes are determined, view figure 2 and 3 in appendix. For adults, Research has shown that as weight increases to reach the levels referred to as "overweight" and "obesity," the risks for the following conditions also increase: Coronary heart disease Type 2 diabetes Cancers (endometrial, breast, and colon)

Adult Obesity Facts, Center For Disease Control and Prevention, http://www.cdc.gov/obesity/data/adult.html(accessed April 7, 2013). Defining Overweight and Obesity, Center For Disease Control and Prevention,http://www.cdc.gov/obesity/adult/defining.html (accessed April 7, 2013).
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Hypertension (high blood pressure) Dyslipidemia (high total cholesterol or high levels of triglycerides) Stroke Liver and Gallbladder disease Sleep apnea and respiratory problems Osteoarthritis (a degeneration of cartilage and its underlying bone within a joint) Gynecological problems (abnormal menses, infertility)3

In regards to children, Obese children are more likely to have: High blood pressure and high cholesterol Increased risk of impaired glucose tolerance, insulin resistance, and type 2 diabetes Breathing problems, such as sleep apnea, and asthma Joint problems and musculoskeletal discomfort Fatty liver disease, gallstones, and gastro-esophageal reflux (i.e., heartburn) Social and psychological problems, such as discrimination and poor self-esteem, which can continue into adulthood4 These health problems result in huge costs. Overweight, obesity, and their associated health problems have a significant economic impact on the U.S. health care system. Medical costs associated with overweight and obesity may involve direct and

Causes and Consequences, Center For Disease Control and Prevention,http://www.cdc.gov/obesity/adult/causes (accessed April 7, 2013). Basics About Childhood Obesity, Center For Disease Control and Prevention,http://www.cdc.gov/obesity/childhood/basics.html (accessed Apr 7, 2013).
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indirect costs. 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. The medical care costs of obesity in the United States are staggering.5 According to Dr. Kenneth Thorpe, if the trends continue, by 2018, 103 million American adults will be obese and health care costs attributed to obesity will reach $344 billion. In addition to the economic implications, many fear that the consequences of having an obese country will cause resentment towards those who are overweight, since they are causing health care costs for everyone to escalate. The United States needs to keep promoting initiatives that help educate people about their health. With well-educated citizens, we can transform our culture into one that spends its money on preventing unavoidable illnesses instead of one that spends billions of dollars on treating easily avoidable diseases.

Causes and Consequences, Center For Disease Control and Prevention,http://www.cdc.gov/obesity/adult/causes (accessed April 7, 2013).

Methods
In looking for resources that could help write this research paper, the project was broken up into 5 different tasks: Task 1: Research specific factors that cause prices to go up Task 2: Interview health care professional (Dr. Karpen) Task 3: Put obesity related expenditures into perspective Task 4: Research what would happen if action is not taken Task 5: Explain how higher obesity rates result in the change of the supply and demand of unhealthy foods, and how this economic change results in even higher obesity rates To acquire the information necessary to effectively evaluate the 5 tasks, the following resources were examined: 4 different articles from the Center for Diseases Control and Prevention: 1. Adult Obesity Facts 2. Basics About Childhood Obesity 3. Causes and Consequences 4. Defining Overweight and Obesity A fact sheet on the Cost of Obesity from the Stop Obesity Alliance website The research paper, The Future Cost of Obesity by Kenneth E. Thorpe An interview with Gynecologist, Dr. Karpen.

Results
In this section, the results of the research that was performed for each task will be presented. Task 1: Research specific factors that cause prices to go up According to Kenneth Thorpe there are three factors that attribute to the increase in burden of treating obesity: 1. The increase number of people that are obese It is easy to understand why a higher obesity rate would cause prices to go up. Since more people are going to the hospital for obesity related illnesses, an increase in obesity rate increases expenditures. 2. The increasing cost of treatments specific to obesity related illnesses Treatments used to treat diseases like type 2 diabetes and coronary heart disease are increasing in price. Because health care costs are increasing, American tax dollars should be spent on expensive treatments for diseases that cannot be prevented, like certain types of cancer. 3. The demographic shift in population with a general trend for older individuals to be obese. An increase in older obese citizens has added to the burden because senior citizens need special kinds of treatments due to their fragile state. In addition to Kenneth Thorpes three factors, it is also necessary to analyze the impact of comorbidity among not only elders, but all overweight individuals. Since being obese

puts the body in such a fragile state, it is just a matter of time before the body starts breaking down. In addition, as an individual contracts diseases, the body becomes more and more prone to contracting additional ones. According to Medical Expenditure Panel Survey, Most adults with diabetes have at least one comorbid chronic disease, and as many as 40 percent have at least three.6 It is easy to see how this downward spiral of diseases, can cause an upward spiral in costs. Figure 6 and 7 in the appendix present empirical evidence showing that overweight patients do indeed end up having more medical problems and higher medical expenses. Task 5: Interview healthcare professional (Dr. Karpen) Like Kenneth Thorpe, Gynecologist Dr. Karpen agrees that medical costs are rising at dangerous rates. After being a medical professional for over 35 years, Dr. Karpen has witnessed first-hand, how medical costs have sky rocketed due to overweight and obesity. In an interview with Dr. Karpen, he shared examples that reflect exactly why medical costs are so much higher for people who are overweight. Here is the interview with Dr. Karpen: Question: Dr. Karpen, have you notice an increase in overweight patients in your clinic throughout your career? Answer: Absolutely, there is without a doubt an obesity epidemic in our country, and it is evident in my clinic. Question: Have you found that your patients who are overweight end up having higher medical bills?
John Piette, The Impact of Comorbid Chronic Conditions On Diabetes Care, Diabetes Care,http://care.diabetesjournals.org/content/29/3/725.full (accessed May 3, 2013).
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Answer: Yes. During Surgery, on people that are overweight, I sometimes have to perform additional procedures because of their excess fat, and because they have a higher risk of complications. Also, after surgery, many patients need to do rehab; however, many cannot perform the rehab because they are too overweight. As a result, they have to come back and receive additional treatment. If you do not take care of your body when you are young, it will not take care of you when you get older. Many people become over weight because they live a very unhealthy life style, and that has consequences. Some of these consequences are evident in my clinic.

Question: Are you optimistic about the future? Answer: I would like to be, but unless there are drastic changes, which I do not see happening, this epidemic will just keep getting worse. It is more expensive and time consuming to eat healthy, so unfortunately sometimes people do not have a choice. Working out is also a great thing to do, but that is also expensive. Many people cannot afford to spend the time to exercise when they need to be working in order to provide for their family. In addition to that, it is expensive to have things like personal trainers, and gym memberships. Because of the culture in the United States, it is hard for me to be optimistic about the future of obesity.

What do you think about the emergence of healthier options in places like McDonalds, and successful companies like My Fit Foods and Whole Foods? Do you not think this new healthy lifestyle trend that seems to be starting will help?

Answer: I think all of those things are great, but they are not nearly as big as they need to be in order to make a big difference.

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Question: What do you think would be a good solution to the problem? Answer: I think a good solution may be to find ways to tax people according to their body mass index, whether it be by taxing unhealthy food or taxing them through their insurance, Im not sure. At the end of the day, people that are overweight are causing costs for everyone to go up. If they make the decision to live an unhealthy life style it is not fair for everyone else to pay the price.

Task 3: Put obesity related expenditures into perspective In 2008, direct costs for medical spending attributed to obesity are estimated to have been $147 billion, which is 9.1 % of annual medical spending. Per person, health care spending for obese adults is 56 % higher than for normal-weight adults. Over a 15 year period, the additional costs incurred by obese adults with private health insurance versus normal weight adults increased from $272 to $1,244 per person per year. The number of obese Medicare recipients nearly doubled between 1987 and 2002 and the cost of treating them almost tripled. Many direct medical costs of the obese are paid by taxpayer dollars. o Obesity attributable expenditures for Medicare and Medicaid make up 8.5% and 11.8% of spending, respectively. Total health care expenditures for adults that were obese increased by more than 80 % when comparing 2001 and 2006 data (rising from $166.7 to $303.1 billion).

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Indirect costs are costs that are lost to morbidity and mortality, such as wages lost due to sickness and early death. The indirect costs of obesity were estimated to be $56 billion in 2000.7

For more information on indirect and direct costs , view figure 4 and 5 in index.

Task 4: Research what would happen if action is not taken The U.S. is expected to spend $344 billion on health care costs attributable to obesity in 2018 if rates continue to increase at their current levels. These obesity related direct expenditures are expected to account for more than 21 % of the nations direct health care spending in 2018.8 Oklahoma is expected to have the highest obesity rate in the country by 2018; Colorado is estimated to have the lowest obesity rate. The tables below show states with the highest and lowest expenditures.9 For more state comparisons, view Appendix figure 8.

Fast Facts: The Cost of Obesity, Stop Obesity Alliance, http://www.stopobesityalliance.org/wpcontent/themes/stopobesityalliance/pdfs/Fast%20Facts%20Cost%20of%20Obesity.pdf (accessed April 7, 2013). Fast Facts: The Cost of Obesity, Stop Obesity Alliance, http://www.stopobesityalliance.org/wpcontent/themes/stopobesityalliance/pdfs/Fast%20Facts%20Cost%20of%20Obesity.pdf (accessed April 7, 2013). Kenneth Thorpe, The Cost of Obesity, American Health Rankings, November 2009, pageNr.,http://www.fightchronicdisease.org/sites/fightchronicdisease.org/files/docs/CostofObesityReportFINAL.pdf(accessed April 7, 2013).
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Task 5: Explain how the higher obesity rates result in the change of the supply and demand of unhealthy foods, and how this economic change results in even higher obesity rates One of the most prolific economists to ever live, John Maynard Keynes stated that, Demand creates supply. When both demand and supply of an economy increases, there is economic growth. When there is economic growth, businesses do well and take advantage of the opportunity by investing. This concept usually carries a positive connotation when referring to the free market in general; however, in the food industry, this model explains the weight gain in the US. When obesity rates increase, there is a higher demand for unhealthy foods because that is what most overweight people want to eat. Since there is a demand for unhealthy foods, industries adjust production and supply the public with more unhealthy foods so that they can meet the demand. This shift in the demand and supply of unhealthy foods causes tremendous growth in fast food industries. The investment that results from this growth then goes to opening up more businesses that will allow them to profit from the demand for unhealthy foods. You can tell this is happening in the United States by simply driving around and looking at how many fast food restaurants there are. Now, because there is so much supply of unhealthy food all over America, eating unhealthy has become the most convenient form of attaining meals. This convenience results in more people eating unhealthy foods, and becoming overweight. As you can see, this can, and has, turned into a vicious cycle.

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Conclusion/Recommendations
If we as a country do not take action and strive to improve our health, our countrys expenses will keep going up and more importantly, our health will keep decreasing to dangerous levels. We need to educate each other on the importance of eating healthy and exercising so that we can have a healthier and happier country whose healthcare expenses are dedicated to helping people that are ill through no fault of their own. By having an educated public that cares about their health, businesses will be forced to adjust to the shift in demand. For example, if more and more people would rather have fruits and vegetables than a Big Mac, one of two things will occur. McDonalds will either have to close down locations because not enough people want to eat their unhealthy food, or McDonalds will have to start offering healthier choices. You can already see this cultural shift occurring in the food industry today. It is our culture that made us turn into an obese country. So lets change our culture so that together, we can help each other become healthier. In the Natural System of Liberty proposal, the founding father of modern economics, Adam Smith, said that in a free market where people work for their own self-interest, the end result is good for society as a whole. Smith uses two main topics to prove his point: If businesses want to be successful they must meet the demand of the public. If demands are not met, the business will not succeed. Since there is competition in a free market, the only way a business can be successful, is by providing the best possible good or service to the public. If

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they do not do this, than the public will go to another business that meets their needs more effectively. While it is Smiths theory that got the US in the situation it is in, the current culture shift that is starting to be seen shows how we can use Smiths theory to get the country back into shape. With an educated public that demands healthy food, firms will be forced to change their strategies and meet that demand. The United States needs to start implementing a culture change now so that, in the future, it is not forced to make changes that completely interrupt the American way of life. That is, if it is not too late.

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Appendix
Figure 1:

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Figure 2:

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Kenneth Thorpe, The Cost of Obesity, American Health Rankings, November 2009, pageNr.,http://www.fightchronicdisease.org/sites/fightchronicdisease.org/files/docs/CostofObesityReportFINAL.pdf(accessed April 7, 2013). BMI Calculator, Harvard Health Publication, http://www.health.harvard.edu/topic/BMI-Calculator (accessed May 3, 2013).
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Figure 3:

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Figure 4:

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BMI 4mula, Bmi Classification and Cut Off Point, BMI Formula, entry posted n.d., http://bmi formula.blogspot.com/ (accessed May 3, 2013). Today's Children, Tomorrow's Work Force, Window on State Government,http://www.window.state.tx.us/specialrpt/obesitycost/2007/09todaytomorrow.html (accessed May 3, 2013).
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Figure 5:

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Economic Cost Related to Obesity, Marina Weight Loss,http://www.marinaweightloss.com/infographics/costs/ (accessed May 3, 2013).

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Figure 6:

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Wayway Hlaing, Sunny Kim, and Diana Davalos, Hospital Charges and Comorbiditi es of Obese and Morbidly Obese Patients, Internet Scientific Publications, http://archive.ispub.com/journal/the-internet-journal-ofepidemiology/volume-7-number-2/hospital-charges-and-comorbidities-of-obese-and-morbidly-obesepatients.html#sthash.Lg4Cq4cU.dpbs (accessed May 3, 2013).

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Figure 7:

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Wayway Hlaing, Sunny Kim, and Diana Davalos, Hospital Charges and Comorbidities of Obese and Morbidly Obese Patients, Internet Scientific Publications, http://archive.ispub.com/journal/the-internet-journal-ofepidemiology/volume-7-number-2/hospital-charges-and-comorbidities-of-obese-and-morbidly-obesepatients.html#sthash.Lg4Cq4cU.dpbs (accessed May 3, 2013).

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Figure 8:

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Kenneth Thorpe, The Cost of Obesity, American Health Rankings, November 2009, pageNr.,http://www.fightchronicdisease.org/sites/fightchronicdisease.org/files/docs/CostofObesityReportFINAL.pdf(accessed April 7, 2013).

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Bibliography
Adult Obesity Facts, Center For Disease Control and Prevention, http://www.cdc.gov/obesity/data/adult.html(accessed April 7, 2013).

Defining Overweight and Obesity, Center For Disease Control and Prevention,http://www.cdc.gov/obesity/adult/defining.html (accessed April 7, 2013).

Causes and Consequences, Center For Disease Control and Prevention,http://www.cdc.gov/obesity/adult/causes (accessed April 7, 2013).

Basics About Childhood Obesity, Center For Disease Control and Prevention,http://www.cdc.gov/obesity/childhood/basics.html (accessed Apr 7, 2013).

Thorpe, Kenneth. The Future Cost of Obesity. America's Health Rankings, November 2009.http://www.fightchronicdisease.org/sites/fightchronicdisease.org/files/docs/Costof ObesityReport-FINAL.pdf (accessed April 7, 2013).

Piette, John. The Impact of Comorbid Chronic Conditions On Diabetes Care. Diabetes Care.http://care.diabetesjournals.org/content/29/3/725.full (accessed May 3, 2013).

Fast Facts: The Cost of Obesity, Stop Obesity Alliance, http://www.stopobesityalliance.org/wpcontent/themes/stopobesityalliance/pdfs/Fast%20Facts%20Cost%20of%20Obesity.pdf ( accessed April 7, 2013).

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BMI Calculator, Harvard Health Publication, http://www.health.harvard.edu/topic/BMICalculator (accessed May 3, 2013).

BMI 4mula, Bmi Classification and Cut Off Point, BMI Formula, entry posted n.d., http://bmi formula.blogspot.com/ (accessed May 3, 2013).

Today's Children, Tomorrow's Work Force. Window on State Government.http://www.window.state.tx.us/specialrpt/obesitycost/2007/09todaytomorro w.html (accessed May 3, 2013).

Economic Cost Related to Obesity, Marina Weight Loss,http://www.marinaweightloss.com/infographics/costs/ (accessed May 3, 2013).

Wayway Hlaing, Sunny Kim, and Diana Davalos, Hospital Charges and Comorbidities of Obese and Morbidly Obese Patients, Internet Scientific Publications, http://archive.ispub.com/journal/the-internet-journal-ofepidemiology/volume-7-number-2/hospital-charges-and-comorbidities-of-obese-andmorbidly-obese-patients.html#sthash.Lg4Cq4cU.dpbs (accessed May 3, 2013).

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