How Does Obesity in Adults Affect Spending on Health Care?

Report
September 8, 2010

Economic and Budget Issue Brief

Over the past two decades, the adult population in the United States has, on average, become much heavier. From 1987 to 2007, the fraction of adults who were overweight or obese increased from 44 percent to 63 percent; almost two-thirds of the adult population now falls into one of those categories. The share of obese adults rose particularly rapidly, more than doubling from 13 percent to 28 percent. That sharp increase in the fraction of adults who are overweight or obese poses an important public health challenge. Those adults are more likely to develop serious illnesses, including coronary heart disease, diabetes, and hypertension. As a result, that trend also affects spending on health care.

This Congressional Budget Office (CBO) issue brief examines changes over time in the distribution of adults among four categories of body weight: underweight, normal, overweight, and obese. Those categories are defined in federal guidelines using a measure known as the body-mass indexa measure that standardizes weight for height. CBO analyzes how past changes in the weight distribution have affected health care spending per adult and projects how future changes might affect spending going forward. (In this issue brief, health care spending refers to spending by public and private insurers and out-of-pocket spending by individuals.)

According to CBOs analysis of survey data, health care spending per adult grew substantially in all weight categories between 1987 and 2007, but the rate of growth was much more rapid among the obese (defined as those with a body-mass index greater than or equal to 30). Spending per capita for obese adults exceeded spending for adults of normal weight by about 8 percent in 1987 and by about 38 percent in 2007. That increasing gap in spending between the two groups probably reflects a combination of factors, including changes in the average health status of the obese population and technological advances that offer new, costly treatments for conditions that are particularly common among obese individuals.

A relatively simple set of calculations using survey data indicates that if the distribution of adults by weight between 1987 and 2007 had changed only to reflect demographic changes, such as the aging of the population, then health care spending per adult in 2007 would have been roughly 3 percent below the actual 2007 amount. Similar calculations show the potential effects of different trends in adults body weight on future health care spending. CBO considered three scenarios. In all three, CBO assumed that per capita health care spending will continue to grow faster for adults whose weight is in the above-normal categories than for those whose weight is considered normal. CBOs assumptions and findings for the scenarios are as follows:

  • First, CBO assumed that there will be no future changes in the distribution of adults by body weight and, therefore, that the prevalence of obesity will remain at the 2007 rate of 28 percent. If so, per capita spending on health care for adults would rise by 65 percent—from $4,550 in 2007 to $7,500 in 2020, CBO estimates—largely as a result of the continuation of underlying trends in health care that have led to rapidly increasing spending for all adults regardless of weight. (All dollar figures are in 2009 dollars.)
  • Alternatively, CBO assumed a rising prevalence of obesitynamely, that recent trends (from 2001 to 2007) in adults body weight will continue. In that scenario, the prevalence of obesity would rise to 37 percent by 2020, and per capita spending would increase to $7,760—about 3 percent higher than spending in the first scenario.
  • CBO also assessed the impact of a possible reversal in recent trends by assuming that, by 2027, the distribution of adults body weight will return to the 1987 distribution (essentially reversing what happened from 1987 to 2007). In that scenario, the prevalence of obesity among adults would drop to 20 percent by 2020. Per capita spending would increase to $7,230 in 2020—about 4 percent lower than spending in the first scenario.

Because lower rates of obesity are associated with better health and lower health care spending per capita, there is considerable interest in devising policies that would reduce the fraction of the population that is obese. Research and experimentation in this area are ongoing, but the literature to date suggests that the challenges involved in reducing the prevalence of obesity are significant.

How reducing obesity would affect both total (rather than per capita) spending for health care and the federal budget over time is less clear. To the extent that people, on average, lived longer because fewer individuals were obese, savings from lower per capita spending would be at least partially offset by additional expenditures for health care during those added years of life. Moreover, the impact on the federal budget would include not only changes in federal spending on health care but also changes in tax revenues and in spending for retirement programs such as Social Security, for which costs are directly tied to longevity. As a result, the net impact of reductions in obesity rates on national health care expenditures and on federal budget deficits would depend on the magnitude of those various effects. This brief does not address the changes in longevity that might arise from a changing weight distribution or the potential impact of such changes on total health care expenditures.