Medical Expenses related to Obesity costs States billions

Newswise, August 30, 2011 —States spend up to $15 billion a year in medical expenses related to obesity, according to a new study by researchers at RTI International, Duke University, and the federal Agency for Healthcare Research and Quality.

The study, published online in Obesity, updates 2004 state-by-state estimates of obesity-attributable medical expenditures. The report also provides rough estimates of the share of obesity expenditures in each state that are funded by taxpayers through Medicare and Medicaid.

Total state-level estimates in 2009 dollars range from $203 million in Wyoming to $15.2 billion in California. Obesity-attributable Medicaid expenditures range from $38 million in Wyoming to $4 billion in New York, and Medicare expenditures range from $35 million in Wyoming to $3.4 billion in California.

"This evidence clearly indicates that obesity imposes high annual total and public sector medical costs on state budgets," said Justin Trogdon, Ph.D., a health economist at RTI and the paper's lead author. "The high costs emphasize the need to prevent and control obesity as a way to manage those costs."

The research showed that total annual medical estimates attributable to obesity are 10 percent or higher in Alabama, Alaska, Indiana, Louisiana, Michigan, Mississippi, Ohio, South Carolina and Tennessee. Colorado had the lowest percentage of annual medical estimates attributable to obesity at 7 percent, followed by Hawaii at 7.2 percent.

"This study shows that the toll that obesity takes goes beyond impairing the health of individuals to imposing a major burden on the entire health care system," says Carolyn M. Clancy, M.D., AHRQ director. "Reducing the prevalence of obesity and its complications is an important priority for the nation and requires focused and constant attention."

The percentage of annual Medicare expenditures in each state ranges from 5.2 percent in Hawaii to 10.2 percent in Ohio. For Medicaid recipients, the percentages are higher, ranging from 6.8 percent in Virginia to 17 percent in Arizona. The higher percentage of Medicaid expenditures attributed to obesity results from the higher prevalence of obesity among Medicaid recipients.

The research also showed between 25 and 64 percent of state-level obesity costs are financed by the public sector via Medicare and Medicaid. According to the study, 25 percent of the state-level obesity costs in Virginia and 64 percent of the state-level costs of obesity in Rhode Island are financed by Medicare and Medicaid.

The study was based on the 2006 Medical Expenditure Panel Survey to generate an equation that predicts annual medical expenditures as a function of obesity status.

The figures confirm earlier findings that obesity accounts for a significant, and preventable, portion of the nation's medical bill, and highlight the role of the states in financing these costs. The authors caution that the estimates should not be used to make cost comparisons across states or between payers because the state-level estimates are associated with large standard errors influenced by many variables within each state.

In a previous paper published in the journal Health Affairs in 2009, the researchers estimated national costs attributable to obesity to be $147 billion.