Economic Implications of Obesity Management

• Span the ages from childhood through old age

• The costs are borne: – Personally

– By employers

– By the government

– By taxpayers

Not stratified to Obese and Overweight by cost

Economic Consequences of ObesityWhy Should You Care?

Economic Burden of Obesity - Similar to Other Chronic Diseases

Billions, $

Obesity 1 75.0

Type 2 Diabetes* 2 73.7

Coronary heart disease 3 52.4

Hypertension 4 28.2

Arthritis 5 23.9

Breast Cancer 6 7.1

1 Finkelstein EA, Obes Res 2004;12, 4. Hodgson TA et al. Med Care 2001;39:599, 2 ADA Diabetes Care, 2003;26:917, 5 Yelin & Callahan. Arthritis Rheum 1995;38:1351, 3 Hodgeson TA et al. Medical Care 1999:37:994. 5 Brown ML, et al. Medical Care; 2002;40(suppl): IV-104, Courtesy of Anne Wolf, MS, RD.

Direct cost of chronic diseases in the U.S. ($2003)

Obesity Contribution to Health Care Costs

ComorbidCondition

DirectCost

($ billions)

IndirectCost

($ billions)

Total CostOf Condition($ billions)

Attributable to Excess Weight (%)

Type 2 Diabetes $32.4 $30.74 $63.14 61

Heart Disease $6.99 $33.41 $40.4 17

Hypertension $3.23 $15.77 $19 17

Osteoarthritis $4.3 $12.9 $17.2 24

Colon Cancer $1 $1.78 $2.78 11

Breast Cancer $.840 $1.48 $2.32 11

Endometrial Cancer $.286 $.504 $.790 34

Wolf AM, Colditz GA. Obes Res. 1998;6:97.

Estimated Obesity-Attributable % U.S. Business Health Care Spending on Selected Diseases

0

20

40

60

80

100

Hy pertension Hy percholesterolemia Ty pe 2 Diabetes Coronary Heart

Disease

Stroke Gallbladder Disease Endometrial Cancere Osteoarthritis of Knee

Mild Obesity

Moderate-to-Severe Obesity

46.0%

15.9%

85.5%

36.2%

18.7%

46.8%

19.0%

27.0%

Thompson D, Edelsberg J, Kinsey K, Oster G, et al. Estimated Economic Costs of Obesity to U.S. Business. Am J Health Promot 1998: 13(2): 120-127.

Costs Stratified by BMI

BMI = body mass index. Rate ratio reference group is BMI 20-25 kg/m2. P value represents association between BMI and cost or utilization specified.

Health Care costs of Obesity

BMI Range

Variable 25-30 kg/m2 30-35 kg/m2 > 35 kg/m2 P Value

Inpatient days 0.83 1.33 1.70 < 0.001

Inpatient cost 0.83 1.33 1.70 < 0.001

Outpatient visits 1.02 1.14 1.25 < 0.001

Outpatient cost 0.99 1.21 1.37 < 0.001

Pharmacy cost 1.23 1.60 1.78 < 0.001

Lab cost 0.97 1.24 1.85 < 0.001

Cost: Total care 0.95 1.25 1.44 < 0.001

Am J of Manage Care, March 1998.

0

10000

20000

30000

40000

Obesity Effect on Expected Lifetime Medical Care Costs* in Men

Cos

ts (

$)*

Body Mass Index (kg/m2)

32.5 27.537.5

55-6445-54

*Total cost of CHD, type 2 DM, hypertension, hypercholesterolemia, stroke

Age (y)

Thompson et al. Arch Intern Med 1999;159:2177.

35-4422.5

Obesity Effect on Expected Lifetime Medical Care Costs in Women

0

10,000

20,000

30,000

40,000

Co

sts

($)

37.5 32.5 27.5 22.5

35 - 4445 - 54

55 - 64

BMI (kg/m2)

Age

*Total cost of 8 diseases: CHD, type 2 DM, hypertension, hypercholesterolemia, stroke, gallbladder disease, osteoarthritis of knee, endometrial cancer.

Adapted from Thompson D et al. Arch Intern Med 1999;2177-2183.

Expected Lifetime Medical Care* Savings of Sustained 10% Weight Loss by

Age and Initial BMI (Women)

0

1000

2000

3000

4000

5000

6000

Co

sts

($)

37.5 32.5 27.5

35 - 44

45 - 54

55 - 64

BMI (kg/m2)

Age

*Total cost of 5 diseases: CHD, type 2 DM, hypertension, hypercholesterolemia, and stroke. Adapted from Oster G, et al. Am J Public Health 1999;89:1536-1542.

Raebel, M. et al. Arch Intern Med 2004;19(164):2135-2140.

Obese Patients (n = 539)

Nonobese Pts(n = 1225)

Item, $ Total

Median (5th - 95th

Percentile) Total

Median(5th - 95th

Percentile) P Value*

Outpatient visits 51759 79.58(0 - 227.25) 174507 91.82

(0 - 489.71) < 0.001

Hospitalizations 81992 0 (0 - 0) 73018 0

(0 - 0) 0.01

Professional service claims 102444 0

(0 - 1151.26) 172698 0 (0 - 764.50) 0.20

Prescription drugs 337973 357.65

(0 - 2061.11) 447998 157.86 (0 - 1361.27) < 0.001

Total costs 574167 585.44 (51.11 - 4137.41) 868221 333.24

(0 - 2431.73) < 0.001

Medical Resource Use for Obese, Nonobese Patients - 1Year Data

*Two-part regression model (Berk and Lachenbruch 2002)

Cost Difference

• 2.3% - Cost increase for each higher BMI unit

• 52.9% - Cost increase for each major associated co-morbidity

Raebel, M. et al. Arch Intern Med 2004;19(164):2135-2140.

0

20

40

60

80

100

Increase Healthcare Costs - Obese Compared with Lean

17,188 Patients-1 Year Data

Incr

ea

se in

Co

st C

om

par

ed

w

ith L

ean

Su

bje

cts

(%)

BMI 30 - 34 kg/m2 BMI ≥ 35 kg/m2

Quesenberry CP Jr et al. Arch Intern Med. 1998;158:466-472.

*HMO Setting: Northern California Kaiser Permanente

Healthcare visits

Pharmacy

Laboratory tests

All outpatient services

All inpatient services

Total healthcare

Economic Impact on Employers

• Bear a major part of the insurance burden for their employees

• BMI > 30 mg/dl impacts productivity and all indirect morbidity outcomes

• Rise in one BMI unit = a 1.9% rise in median health costs among 5689 managed care members

Pronk NP, et al. JAMA. 1999;28:;2235-2239.

$0

$2,000

$4,000

$6,000

$8,000

$0

$400

$800

$1,200

$1,600

Economic Effect of Obesity in Workplace

Burton et al. J Occup Environ Med 1998;40:786.

*BMI > 27.8 kg/m2 in men; > 27.3 kg/m2 in women.

AbsenteeismHealthcare

Lean Obese*

$4,496

$6,822

$683

$1,546

3-Year Costs to First Chicago NBD

Employer Cost of Obesity

• Obesity is associated with– 39 million LOST work days– 239 million RESTRICTED activity days– 90 million BED days– 63 million PHYSCIAN visits

The National Business Group on Health, Institute on the Costs and Health Effects of Obesity, August 2004.

Employer Costs of Obesity

• Total cost to US companies- $13 billion/year

Health Insurance Costs- $8 billion

Paid sick leave costs - $2.4 billion

Disability insurance - $1 billion

The National Business Group on Health, Institute on the Costs and Health Effects of Obesity, August 2004.

Employer Cost of Obesity

• 8% of private employer medical claims are due to overweight and obesity

• 36% higher in/out patient spending• 77% higher medication spending• 45% more inpatient days• 48% more payments over $5000• 11% higher annual healthcare costs

The National Business Group on Health, Institute on the Costs and Health Effects of Obesity, August 2004.

Contribution to Total Cost of Primary Medical Care California, Year 2000-

2,579,444 Adults

Risk Factor

1999 Direct Medical

Care CostMid-2000 Inflator 2000 Costs

% of Total Cost of Primary

Medical CarePhysical Inactivity

$233,757,324x 1.0352 $241,985,581 3.92%

Obesity $130,912,520x 1.0352 $135,520,641 2.19%

Overweight $90,329,639 x 1.0352 $93,509,242 1.51%

$454,999,483 $471,015,464 7.62%

Chenoweth, D. (2005). The Economic Costs of Physical Inactivity, Obesity, and Overweight inCalifornia Adults During 2000: A Technical Analysis. Cancer Prevention and Nutrition Section, California Department of Health Services, Sacramento, California.

Obesity in the Short termIncreases Health Care Costs

Obesity Wage Differentials

0

2

4

6

8

10

1981 1982 1985 1986 1987 1898 1990 1992 1993 1994 1996 1998

Wage

Wage for Obese

Wage for Nonobese

Baum C, Ford W. Health Economics. 2004;13:885-899.

0

2

4

6

8

10

12

1981 1982 1985 1986 1987 1898 1990 1992 1993 1994 1996 1998

Obese Male Wage

Nonobese Male Wage

Obese Female Wage

Nonobese Femal Wage

Obesity Wage Differential by Gender

Baum C, Ford W. Health Economics. 2004. 13:885-899.

US Navy - Active Duty Personnel

• Obesity-related costs and career outcomes:

– 25% of separations and retirements in obesity group were attributed to obesity co-morbidity (DM, CHD, HBP)

Hoilberg, A. McNally, MS. 1991;156[2]:76-82.

• 20.4% Air Force men - overweight 1997

• 20.5% Air Force women - overweight 1997

• $22.8 million/year - total medical costs of excess body weight in Air Force personnel

• 28,351 days/year - as medical overweight lost duty days

Robbins. Military Medicine 2002;167(5):393-397.

US Air Force - Cost of Overweight

9 Year Total Healthcare Costs

Thompson, D. et al. Obes Res. 2001;9(3):210-218.

9 Year Costs of Prescription Drugs

Thompson, D. et al. Obes Res. 2001;9(3):210-218.

9 Year Costs of Outpatient Services

Thompson, D. et al. Obes Res. 2001;9(3):210-218.

Sturm. R. Health Affairs. March/April 2002.

Cost Increases Associated with Obesity and 20 Years Aging 1998

Sources: Author’s calculation based on data from the Healthcare for Communities (HCC) survey, wave 1.* Twenty years’ aging is from age thirty to age fifty.

100

80

60

40

20

0

Per

cent

Cha

nge

Services Medication

Obese

20 years’ aging*

Smoking (current)

Overweight

Problem drinking

Smoking (past)

• Aging population has important implications for expenditures by Medicare

• Medicare is the largest single source of health care spending

Daviglus. M. et al. JAMA. 292(22): 2743-2749.

Aging Population

Medicare Charges Age 65 Years to Death or Age 83 Years (1984 – 2002),

by Baseline BMI (1967 – 1973)

Daviglus. M. etal. JAMA. 2004;292(22):2743-2749.

*Adjusted for baseline age, race (indicator for black), education (years), and smoking (cigarettes/d). Additionally, to component of the consumer price index.†For all rows, p < 0.001 for trend across 4 BMI Groups based on BMI as a continuous variable entered in a modified Cox regression model.

ŧp < 0.001 for comparisons with the non overweight group (BMI 18.5 – 24.9)§p < 0.001 for comparisons with the nonoverweight group (BMI 18.5 – 24.9)

Charges

BMI 18.5 – 24.9 BMI 25.0 – 29.9 BMI 30.0 – 34.9 BMI ≥ 35.0

Men (n = 2616)

No.

Death, No. (%)

CVD

Diabetes

Total

662

395 (59.7)

26567

167

100431

1427

835 (58.5)

36159ŧ

832ŧ

109098§

457

303 (66.3)

43168ŧ

1047ŧ

119318§

70

58 (82.9)

58380ŧ

6284ŧ

176947ŧ

Women (n = 2616)

No.

Death, No. (%)

CVD

Diabetes

Total

1187

490 (41.3)

17566

211

76866

622

253 (40.7)

30324 §

853ŧ

100959

169

87 (51.5)

36166ŧ

2325ŧ

125470§

78

49 (62.8)

47000ŧ

10783ŧ

174752ŧ

• Baseline BMI related to Medicare costs for:

– CVD

– Diabetes

• 7% of Medicare charges are for obesity

Daviglus. M. et al. JAMA. 2004,Vol.292, No.22:2743-2749.

Medicare Charges

• 84% higher total difference in charges –severely obese vs non-overweight men

• 88% higher total difference in charges- severely obese vs non-overweight women

Daviglus. M. et al. JAMA. 2004;Vol.292, No.22:2743-2749.

Difference in Cost in Severely Obese

• 9.1% of the total annual US medical expenditures in 1998 - attributable medical spending for overweight and obesity: $78.5 billion

• Medicare and Medicaid finances 50% of the cost

Finkelstein EA. et al. Health Affairs Policy J. of Health Sphere May 2003.

Childhood/Adolescent Health Costs

• $9 – $20: Cost of a single day of absenteeism for a student

• 9 days: Median # sick days away from school for the most overweight students

• Obesity associated annual hospital costs for children and youth more than tripled over the last two decades

• $35 million in1979 – 1981

• $127 million in 1997 – 1999

Action for Healthy Kids- The Learning Connection- Value of Improving Nutrition and Physical Activity in Our Schools.

Preventing Childhood Obesity: Health in the Balance. 2005. Institute of Medicine. Childhood Obesity Prevention Study.

• Obesity medications produced substantial weight loss

• Drug cost savings for obesity co-morbid conditions

• Subjects were taking medications for:– Diabetes

– Hyperlipidemia

– Hypertension

• Pharmaceutical cost computed for:– Weight loss

– Cardiac risk reduction

– Lipid reduction

– Glucose reduction

Greenway FL, Ryan DH, Bray GA. Obesity Research. 1999;7:523-531.

Obesity Medications

Weight Management for Diabetes, Hypertension,

and Dyslipidemia - Saves Money

ObesityComorbidity

Diabetes (insulin RX) $104 7%

Diabetes (sulfonylurea Rx) $55 7%

Hypertension $20 10%

Dyslipidemia $61 5%

Savings/Month

% LossFrom Initial

Weight

Greenway FL, Ryan DH, Bray GA. Obesity Research. 1999;7:523-531.

Quality of Life and Obesity

• Quality of life - altered by obesity

• Quality of life - decreases with increasing obesity

• Quality of life - slightly worse for women compared to men

Livingston EH, Ko CY. Obesity Research. 2002; 824-832.

• Most obese have the poorest quality of life

• Quality of Life improves with weight loss

Kolokin, R. et al. Obesity Research. 2001.

Quality of Life for the Obese Patient

Five Keys

1. Obesity is a serious problem.

2. Risk assessment drives treatment options.

3. Modest weight loss = Major health benefits.

4. Lifestyle is the foundation of treatment.

5. PCP’s have special role: – Promote lifestyle for all patients.

– Help patients with weight loss, including prescribing and referral for surgery.

Weight Loss and IWQOL-Lite Scores

-0.0

-0.1

-0.2

-0.3

-0.4

-0.5

-0.6

-0.7

-0.8

-0.9

-1.0

-1.1

1-Y

ear

IW

OO

L-L

ite P

er-I

tem

Cha

nge

+/-

SE

< 10% Weight Loss

10% - 14.9% Weight Loss

15% - 19.9% Weight Loss

20% + Weight Loss

Physical Self- Sexual Public IWQOL-Lite Function Esteem Life Distress Work Total

Kolokin, R. et al. Obesity Research. 2001.

Effects of Obesity, Smoking and Drinking on Medical Problems and Costs. Sturm. R. Health Affairs. March/April 2002.

Effect of Obesity and 20 Years Aging on Chronic Medical Conditions and Health-Related Quality of Life, 1998

Sources: Author’s calculation based on data from the Healthcare for Communities (HCC) survey, wave 1.

* Twenty years’ aging is from age thirty to age fifty.

Obese

20 years’ aging*

Smoking (current)

Overweight

Problem drinking

Smoking (past)

Increase in number of chronic conditions

Decline in health-related quality of life (0 - 100 scale)

2.0

1.5

1.0

0.5

0.0