The Impact of Obesity on Medical Care Costs and Labor Market Outcomes in the US

Abstract

Background: The prevalence of obesity has risen dramatically in most countries of the world, and the economic consequences of obesity are not well understood.

Methods: We analyzed data from the Medical Expenditure Panel Survey (MEPS) for 2001-2015 and estimated the percentage of healthcare costs that were associated with adult obesity, both for the US as a whole and for the most populous states. We also reviewed the literature on the impact of obesity on economic outcomes such as medical care costs, employment, and wages.

Results: The percent of US national medical expenditures devoted to treating obesity-related illness in adults rose from 6.13% in 2001 to 7.91% in 2015, an increase of 29%. Substantial differences existed across states; in 2015, some states (AZ, CA, FL, NY) devoted 5%-6% of medical expenditures to obesity, whereas others (NC, OH, WI) spent >12% of all healthcare dollars on obesity. A review of previous literature that exploited natural experiments to estimate causal effects found that obesity raises medical care costs and lowers wages and the probability of employment.

Conclusions: A substantial and rising percentage of healthcare costs are associated with obesity. This is true for the US, for individual states, for each category of expenditure, and for each type of payer. Previous literature generally found that obesity worsens economic outcomes, such as medical care costs, wages, and employment, and imposes negative external costs that may justify government intervention.