The study reports that an obese person incurs medical costs that are $2,741 higher (in 2005 dollars) than if they were not obese. Nationwide, that translates into $190.2 billion per year, or 20.6 percent of national health expenditures. Previous estimates had pegged the cost at $85.7 billion (9.1 percent).
"Historically we’ve been underestimating the benefit of preventing and reducing obesity," said lead author John Cawley, Cornell professor of policy analysis and management and of economics. "Obesity raises the risk of cancer, stroke, heart attack and diabetes. For any type of surgery, there are complications with anesthesia, with healing [for the obese]. … Obesity raises the costs of treating almost any medical condition. It adds up very quickly."
The new study, conducted with Chad Meyerhoefer of Lehigh University, estimates the effect of obesity on medical expenses by treating the heritable component of weight as a natural experiment. Previous research simply reported the difference between the medical expenses of heavier and lighter people, which is a misleading estimate of the causal effect because obese and non-obese individuals differ in so many ways.
"For example, I could have injured my back at work, and that may have led me to gain weight. The injury could have led to a lot of health care costs that are due to my back, not my obesity," Cawley explained.
The research provides evidence for policymakers to use in cost-effectiveness analysis when deciding whether and how much to fund obesity prevention programs, Cawley added. Since previous studies have underestimated the medical costs of obesity, the economic rationale for governments to intervene and reduce obesity may have been underappreciated.The study appeared in the January issue of the Journal of Health Economics.