Obesity Costs Are Higher Than Previous Estimates

New calculation method estimates higher health care costs for obesity-related illness

FRIDAY, April 13 (HealthDay News) -- Obesity accounts for nearly 21 percent of U.S. health care costs, much higher than previously estimated, according to a study published in the January issue of the Journal of Health Economics.

John Cawley, Ph.D., from Cornell University in Ithaca, N.Y., and Chad Meyerhoefer, Ph.D., from Lehigh University in Bethlehem, Penn., estimated models using restricted-use data derived from the Medical Expenditure Panel Survey for 2000 to 2005. The method of instrumental variables (IV) model, which utilizes genetic variation in weight as a natural experiment, was applied to estimate the effect of obesity on medical expenditures.

The researchers found that the IV model estimated the impact of obesity on medical costs to be much higher than estimates previously reported in the literature. Obesity had previously been associated with $656 more in medical care costs per year, but the IV model suggested that obesity raises annual medical costs by $2,741 (in 2005 dollars).

"These results imply that the previous literature has underestimated the medical costs of obesity, resulting in underestimates of the economic rationale for government intervention to reduce obesity-related externalities," the authors write.

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