The Obesity Epidemic and Health Care Utilization in the United States

1
The Obesity Epidemic and Health Care Utilization
in the United States

• Ramzi G. Salloum
• Department of Economics
• Wayne State University
• Detroit, Michigan
• December 3, 2007

2
Overview

• Introduction
• Cost Benefit Analysis
• Existing Models
• Data
• Model (Tobit Regression)
• Conclusions

3
Why Obesity?

• U.S. Health Care expenditures (2006) - 1.89
  trillion 1
• 59 million adult Americans (31) are obese 2
• Almost 65 are overweight
• U.S. - Obesity Trends
• 12.8 - 1976-1980
• 22.5 - 1988-1994
• 30.0 - 1999-2000
• Americans spend more than 90 billion annually in
  overweight and obesity costs 3

1 Organisation for Economic Co-operation and
Development (OECD 2007) 2 U.S. Department of
Health and Human Services, Office of the Surgeon
General (2001) 3 Finkelstein et al., National
Medical Spending Attributable to Overweight And
Obesity How much and who is paying? Health
Affairs (2003)
4
What is Obesity?
Weight (pounds)

• Associated with
• diabetes
• heart disease
• hypertension
• sleep apnea
• osteoarthritis
• gallbladder disease
• some types of cancer
• Causes
• diet high in fat and calories
• sedentary lifestyle

Weight (kilograms)
An accumulation of excess body fat to an extent
that may impair health 1
1 World Health Organization (WHO 2007)
5
Cost Benefit Analysis 1

• Direct Benefits / Costs
• ? treatment expenditures vs. ? prevention
  expenditures
• Indirect Benefits / Costs
• ? productivity, ? sick time, ? opportunity costs
• Controversial Issue
• should obesity be classified as a disease?
• Non-Market Factors
• quality of life
• Comparable to Smoking (treatment/prevention)

1 Folland, Goodman, Stano, The Economics of
Health and Health Care. 5th edition.
Pearson/Prentice Hall, 2007
6
Cost Benefit Analysis (2)

• Other Concerns
• discounting
• risk adjustment (public project)
• future inflation
• human life valuation

MSB
MSC
Point E MSBMSC
E
Net Benefit
Q
Q1
Q2
100
percentage reduction in obesity

• Possible Use of QALYs
• Quality Adjusted Life Years

7
Existing Models
study data type source results
Wolf Colditz (1998) x-section NHIS1 direct costs of obesity 5.7 of U.S. national health expenditures
Sturm (2002) x-section HCC2 obesity 36 increase in annual medical costs
Finkelstein, Fiebelkorn, Wang (2003) panel MEPS/ NHIS3 obesity 37 increase in annual medical costs direct costs of obesity 5.3 of U.S. national health expenditures
1 National Health Interview Survey, Center for
Disease Control and Prevention (CDC) (1988,
1994) 2 Healthcare for Communities, Robert Wood
Johnson Foundation (1997-1998) 3 Medical
Expenditure Panel Survey (1998), and NHIS (1996,
1997)
8
Data

• National Epidemiologic Survey on Alcohol and
  Related Conditions (NESARC)
• Conducted by National Institute on Alcohol Abuse
  and Alcoholism (NIAAA)
• 1st wave interviews in 2001-2002
• survey of 43,093 Americans
• results weighted to represent U.S. population
• focused on female and male samples, aged 40
• samples representative of 59.9 million females
  (n13,615) and 52.3 million males (n10,027)

9
Model

• hdays b0 b1 obese b2 smoker b3 drinker
• b4 injuries b5 crimes b6 mental b7
  age u
• Variable Definitions
• hdays number of hospital days in past 12 months
• obese bmi 30
• smoker current or ex-smoker
• drinker current or ex-drinker
• injuries number of injuries in past 12 months
• crimes number of times crime victim in past 12
  months
• mental diagnosis of mental disease
• age participant age in years

dummy variables
10
Linear and Tobit Regressions
linear linear linear linear tobit tobit tobit tobit
female female male male female female male male
parameter p-value parameter p-value parameter p-value parameter p-value
obese obese .212 (.130) .103 .182 (.123) .140 3.257 (.697) .000 3.326 (.773) .000
smoker smoker .184 (.126) .142 .314 (.124) .011 3.573 (.690) .000 4.206 (.822) .000
drinker drinker -.644 (.148) .000 -.530 (.194 .006 -3.410 (.774) .000 -4.310 (1.140) .000
injuries injuries .399 (.058) .000 .417 (.073) .000 1.711 (.214) .000 2.919 (.326) .000
crimes crimes .295 (.176) .093 .146 (.146) .320 2.928 (.774) .000 1.853 (.755) .014
mental mental 2.428 (.622) .000 2.776 (.634) .000 14.088 (2.558) .000 13.168 (2.970) .000
age age .044 (.004) .000 .042 (.005) .000 .330 (.024) .000 .422 (.029) .000
cons cons -1.253 (.316) .000 -1.334 (.332) .000 -46.694 1.949 .000 -50.926 (2.393) .000
R2 c2 .0143 - .0151 - .0139 356.95 .0230 386.11
pseudo R-squared 1 LL(full
model)/LL(constant only model)
11
Limitations

• Low R-Squared
• survey does not account for many determinants of
  hospital utilization
• Non-Comprehensive Measure
• survey does not cover outpatient utilization of
  health care
• Self-Reported Weight and Height
• overweight and obese people tend to underreport
  their weight
• Other Non-Sampling Errors
• differences in interpretation of questions
• inability/unwillingness to provide correct
  information
• Inability to recall information
• errors in data collection and processing
• errors in estimating values for missing data

12
Conclusions

• Prevention vs. treatment expenditures
• Obesity has significant positive effects on
  health care utilization (rivals effects of
  smoking)
• Obesity and its costs will continue to rise
• Full effect of obesity epidemic yet to be
  realized!
• Policy needed to curb the growth in obesity

13
Need for Policy

• Economic incentive for payers to reduce
  prevalence of obesity (similar to smoking)
• Health insurers (including Medicaid) established
  strong incentives against smoking (higher rates
  for smokers, sponsored smoking cessation
  treatments, etc.), but weak incentives to fight
  obesity
• Government heavily involved in reducing smoking
  rates (taxation, regulation, etc.), however,
  little done to curb weight gain

14
References

• OECD Health Data 2007 (oecd.org)
• U.S. Department of Health and Human Services,
  Office of the Surgeon General (surgeongeneral.gov)
  
• World Health Organization, Obesity (who.org)
• Folland, Goodman, Stano, The Economics of Health
  and Health Care. 5th edition. Upper Saddle River,
  NJ Pearson/Prentice Hall, 2007
• Wolf, A.M., Colditz, G.A., Current estimates of
  the economic cost of obesity in the United
  States Obesity Res 1998 6 97-106
• Roland Sturm, The Effects Of Obesity, Smoking,
  And Drinking On Medical Problems And Costs,
  Health Affairs, 2002 21(2) 245-253
• Finkelstein, Fiebelkorn, Wang, National Medical
  Spending Attributable to Overweight And Obesity
  How much and who is paying? Health Affairs
  (2003)
• Grant, B.F., Kaplan K., Shepard J., Moore T.
  Source and Accuracy Statement for Wave 1 of the
  2001-2002 National Epidemiologic Survey on
  Alcohol and Related Conditions. National
  Institute on Alcohol Abuse and Alcoholism
  Bethesda MD 2003.