The Economic Impact of Obesity

The Economic Impact of Obesity

October 31, 2023

October 2023 Letter from the Director

With the rise of new treatments for obesity, many healthcare payers are struggling to decide if they will cover anti-obesity medications. These medications are successful at helping patients lose weight and reduce the impact of common comorbidities associated with obesity, but can come at a high price. The question payers are asking is: are the upfront costs of treating obesity worth the return on investment? To explore this question, it is important to understand the impact that obesity has on the economy today. 

Researchers have identified both direct and indirect economic costs associated with obesity. Direct costs come from treating obesity and its associated comorbidities. These include hypertension, type 2 diabetes, coronary heart disease, certain cancers, asthma, and over 200 others. As obesity rates continue to rise, so will the direct medical spending on the diagnosis and treatment of these conditions. It is estimated that the annual medical cost of obesity was nearly $173 billion dollars in 2019, while medical costs were found to be $1,861 higher for those with obesity compared to patients at a normal weight. These costs increase with the severity of obesity.

The indirect costs of obesity on the economy are harder to measure accurately. Productivity costs constitute the major indirect costs associated with the disease. Productivity costs include absenteeism (employees missing work due to obesity-related health reasons) and presenteeism (decreased productivity while at work), as well as premature mortality, loss of Quality Adjusted Life Years (QALYs), and higher rates of disability benefit payments. 

One of the main limitations of understanding the indirect costs associated with obesity stems from the fact that BMI is often calculated from self-reported height and weight in these economic analyses. Self-reported BMI underestimates the true prevalence of obesity, because women tend to underestimate their weight and men tend to overestimate their height. Although the estimates of the indirect costs are imprecise, these likely contribute billions to the total economic impact of obesity. 

Research by Global Data has recently evaluated the impact of obesity in state economies, and published the effects on Texas, Indiana, Iowa, and New York. Their analysis of the impact of obesity on the state of New York found that, in 2022, obesity and overweight cost the state:

  • $37.3 billion in reduced economic activity, or 1.8% of New York’s GDP;
  • $5.2 billion impact on the state budget, including $3.0 billion less in tax revenue; and
  • 165,000 fewer adults in the workforce.

Source: Global Data, 2023

Obesity continues to have a strong impact on the global economy. The total costs of obesity are estimated to range from 0.05% to 2.24% of a country’s gross domestic product (GDP). The World Obesity Federation estimates that the global economic impact of obesity will surpass $4 trillion by 2035. They predict that over half of the global population will have overweight or obesity in the next twelve years if there is no shift to effective prevention, treatment, and support for overweight and obesity. 

Further research is essential to understand the exact impact that obesity has on the economy.  We also need to expand access to comprehensive obesity care. Obesity is a complex, chronic disease and should be covered with a wide range of treatment options. Health insurers should consider more than just the return on investment for obesity treatment and should prioritize the human aspect of obesity by focusing on both the quality of life and health improvements for treated patients.


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