In order to capture the potential economic value to prevent obesity related diseases like diabetes and heart disease, policymakers have to increase the length of time when establishing cost estimates for legislative proposals for chronic health conditions. Investigators from the Campaign to End Obesity have established that policy makers are limited in their ability to consider effective policies to address these costly conditions based on their findings.
The study, “Assessing the Economics of Obesity and Obesity Interventions,” which was led by Michael O’Grady and James Capretta, explains the method in which the Congressional Budget office measures the benefits of policies to address chronic diseases. Their cost estimates usually cover a 10-year period,. However, this period is not long enough to capture the costly complications of chronic diseases, like those linked to obesity, given that many complications take over 10 years to manifest.
The authors therefore, recommend using a 25-year budget window, which would be more appropriate and effective, given that analysts would be able to establish more profound and reliable disease models to estimate longer-term costs. By analyzing the way in which cost estimates are conducted, the authors have also evaluated the substantial and progressively increasing health care costs that are linked to obesity, and listed various prevention and treatment programs.
Stephanie Silverman, co-founder of the Campaign to End Obesity commented:
“Despite the abundance of evidence that obesity is crippling America’s fiscal and physical health – something the authors deftly describe – policies to reduce its prevalence have often been hampered by our federal budget scoring process. By widening our lens to reflect the reality of health care costs, we can target meaningful prevention programs that yield the greatest cost savings and lessen the burden of the obesity epidemic on our economy.”
O’Grady, who was Assistant Secretary of Health and Human Services from 2003 to 2005, and Capretta, who was an Associate Director of the Office of Management and Budget from 2001 to 2004, declared:
“While the CBO 10-year budget window may be appropriate for many federal programs, when the health and financial impacts of a disease play out over longer periods, policymakers need a longer time horizon to get an accurate view of their policy options.”
The percentage of Americans who are obese has taken a distinct upward trend over the past 50 years, with 14.3% of the population diagnosed as obese or extremely obese in 1961 to over 40% by 2008. The result is that obesity-related medical costs in the U.S. have also increased.
According to recent estimates, 10% of all medical costs are obesity-related and could result in annual costs of $147 billion. The CBO’s most optimistic cost modeling scenario has established that obesity-related medical spending per person is estimated to rise by 59% from 2007 levels, or by an average of 3.6% annually.
As the increase in spending outweighs the increase in revenue, these figures predict an upcoming crisis for the long-term financial viability of public and private health insurance programs. The authors highlight that obesity has a sufficiently large enough impact on cost trends to influence whether a health care program will be financially viable or vulnerable in the long run.
According to the study’s data, Medicare has spent an additional $34.3 billion and Medicaid an additional $27.6 billion dollars on past increases in obesity rates, whilst private health insurers have spent an additional $74.6 billion.
The authors also performed a comprehensive evaluation of peer-reviewed programs targeted at addressing or preventing obesity, which included government, community and workplace wellness programs. They reviewed the programs’ different variables, such as clinical benefits, cost-effectiveness and economic considerations, and discovered certain interventions can be both clinically successful and cost-effective. They highlight that it is vitally important to use both success and cost-effectiveness data to inform future policy action.
Tevi Troy, former Deputy Secretary of the U.S. Department of Health and Human Services, who wrote the study’s foreword, remarked:
“If we are to address the problem of obesity in any kind of an effective way, it will be through the sober, clear-headed analysis of experts like Capretta and O’Grady. The authors have given policy makers real choices for how to proceed.”
James S. Marks, senior vice president and director of the Health Group at the Robert Wood Johnson Foundation concluded:
“It’s crucial for the nation to recognize that efforts to prevent obesity and related health problems are vital for our health and economic future. Using the best economic data available, this report shows that reversing the nation’s obesity epidemic can have a strong return on investment.”
Written by Petra Rattue