Annual U.S. Total Economic Cost of Overweight and Obesity Pegged at $270 Billion

by Clive Riddle, January 14, 2011

The Society of Actuaries this week an 80 page report on their study findings: Obesity and its Relation to Mortality and Morbidity Costs.

The study quantified the following economic impact:

• Total annual economic cost of overweight and obesity in U.S. - $270 billion
• Total annual economic cost in Canada - $30 billion
• Total annual U.S. economic cost of obesity - $198 billion (73% of U.S. total)
• Total annual U.S. economic cost of overweight - $72 billion (27% of U.S. total)

The study also broke down the total U.S. and Canada annual economic cost ($300 billion) by specific causes:

• Total cost of excess medical care caused by overweight and obesity: $127 billion (42.3%)
• Economic loss of productivity caused by excess mortality: $49 billion (16.3%)
• Economic loss of productivity caused by disability for active workers : $43 billion (14.3%)
• Economic loss of productivity caused by overweight or obesity for totally disabled workers: $72 billion (24%)

For the study, lead researchers and actuaries Don Behan and Sam Cox reviewed nearly 500 research articles on obesity and its relation to mortality and morbidity, focusing primarily on papers published from 1980 through 2009.  Don Behan FSA, FCA, MAAA tells us that "there is substantial evidence that overweight and obesity are becoming world-wide epidemics, and are having negative impacts on health and mortality. As actuaries, we are working with the insurance industry to help incentivize consumers through their health plan design to focus on health and wellness, which will hopefully help curb the weight and health problems we face today."

Overweight is defined as a body mass index (BMI) of 25.0 to 29.9 and obese as a BMI of 30.0+.  (Extremely obese is 40.0+). The study cited the following current percentage of population with applicable BMIs:

	USA	Canada	Combined
Overweight	19.2%	17.4%	19.0%
Obese	7.4%	7.6%	7.4%
Extremely Obese	4.2%	4.7%	4.3%

The study goes on to examine the relationships and impact of Obesity with Cardiovascular Disease, Diabetes, Cancer, Osteoarthritis, Asthma, Renal Disease, In-Hospital Infection, and other conditions; as well as disabilities and excess mortality caused by obesity, all from an actuarial perspective.

The study concludes that “perhaps the most convincing results concern the effect of overweight and obesity on cardiovascular disease and diabetes. Relative to normal weight, the relative risk of death from CVD increases significantly for overweight men and women…About 60 percent of diabetes is directly related to weight gain… Several papers provide empirical evidence that obesity is significantly related to increased risk for certain cancers (Renehan et al., 2008b). The relationship is complex and depends on the site of the cancer. Overweight and obesity are significantly related to a variety of negative effects on the body, such as delayed healing of joint injuries, increased risk of arthritis, impaired function of internal organs, and interference with hormone balances. …..The negative effects play a role in a cycle of overweight, depression and decreasing physical activity, which results in increased use of the health care system…Increasing BMI also is related to development of asthma …Many empirical studies found that obesity significantly increases the risk of death, that is, all-cause mortality … The relationship between BMI and all-cause mortality is often found to be U-shaped or J-shaped, since underweight also is associated with increased mortality. The few studies of insured groups generally agree with population results.”