Conventional Wisdom: I can’t believe it! Obese individuals are causing the collapse of our healthcare system. According to a report I saw in the AP, obese individuals cost us $1400 more per year in additional medical costs. Let’s get them on the biggest loser and save our health care system!
The question is, does obesity cause sickness. The original article from which the report is based claims that the cost to treat obese individuals has not changed between 1998 and 2006. What has changed over this period is that a higher proportion of individuals are obese.
According to the article, “across all payers, obese people had medical spending that was $1,429 greater than spending for normal-weight people in 2006.” This figure was calculate by examining the differences between probability an obese person received a certain treatment compared to a healthy weighted person. Then the average spending difference for that type of treatment was multiplied by this difference. Thus, $1400, may be an underestimate if obese individuals have more serious hospital stays.
On the other hand, this study does not prove that obesity is the cause of these additional health care costs. Let us think of the following thought experiment. Assume the world is made up of 100 healthy people in year 2. In year 2, half the people get sick, cannot exercise and gain weight. Assume sick people incur $2000 in health care costs. Now in this scenario, we would observe that sick people have higher health care costs. Similarly, obese individuals have higher health care costs. However, in this simple example, no one is innately obese; they only become obese from lack of exercise specifically due to their illness. Thus, finding a correlation between obesity and medical costs does not prove that obesity causes increased medical costs.
Further, obesity is only a problem when health insurance plans are community rated. If obese individuals paid higher health insurance cost, then obese individuals would pay for their higher probability of becoming ill. Without community rating, however, any cost for additional medical costs to care for the obese will be shared among taxpayers. This may unfortunately vilify the obese just as smokers have been villified in the U.S.