How States Differ in Effect of Obesity on Health Care Costs

February 12, 2018

The prevalence of obesity has risen dramatically in the U.S., but there has been little information about the economic impact of this trend for individual states.

Recent research by John Cawley, professor of policy analysis and management at Cornell University, provides new insights on how individual states are affected by the health care costs of obesity, revealing big differences among states.

“We have, for the first time, estimated the percentage of health care spending that is devoted to obesity, using microdata for each state,” said Cawley, who co-authored “The Impact of Obesity on Medical Costs and Labor Market Outcomes in the U.S.” with Adam Biener of the Agency for Healthcare Research and Quality and Chad Meyerhoefer of Lehigh University.

Large differences exist across states, Cawley said that in 2015, Arizona, California, Florida, New York and Pennsylvania devoted five to six percent of their total medical expenditures to treating obesity-related illness, whereas North Carolina, Ohio and Wisconsin spent more than twice that – over 12 percent of all health care dollars in those states were used to treat obesity-related illness.

Overall, the authors found the percent of U.S. national medical expenditures devoted to treating obesity-related illness in adults rose from 6.13 percent in 2001 to 7.91 percent in 2015, an increase of 29 percent.

The publication reports results by payer type, including private health insurance companies, Medicare and Medicaid.

“Once again, we find dramatic differences across states in the fraction of Medicaid spending that is devoted to obesity-related illness,” Cawley said. For example, over the period 2001-2015, Kentucky and Wisconsin devoted more than 20 percent of their Medicaid spending to obesity-related illness. In contrast, in New York, 10.9 percent of Medicaid spending was devoted to obesity-related illness. The average for the U.S. as a whole was 8.23 percent during that period, according to Cawley.

The researchers analyzed data for 2001-2015 from the Medical Expenditure Panel Survey, a nationally representative survey of Americans’ health care utilization and costs. The authors estimated the percent of health care costs that were associated with adult obesity for the most populous states.

The researchers could not generate estimates for less populous states because of a scarcity of information about their residents in the data. Previous estimates of the health care costs of obesity by state were not based on microdata for each state but on assumptions about how national costs should be apportioned to different states.

Differences across states are driven by a number of factors including differences in obesity prevalence, health care access by obese individuals, how obesity is treated and prices of health care, Cawley said.

Source: Cornell University


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