2012 Dialogue Presentation by Michael J. O'Grady, PhD

1. Assessing the Economics of
Obesity and Obesity Interventions
Michael J. O’Grady, PhD
President,
West Health Policy Center
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2. Exhibit 1 –
The Rise in Obesity in the U.S. 1961-2008
(ages 20 and older)
100%
90% Extremely Obese
80% Obese
70% Overweight 5.1% 6.2% 6.0%
5.0% 5.4%
60%
3.0%
50% 0.9% 1.3% 1.4% 30.9% 31.3% 32.9% 35.1% 34.3%
23.2%
40% 13.4% 14.5% 15.0%
30%
20%
31.5% 32.3% 32.1% 32.7% 33.6% 34.4% 33.4% 32.2% 33.6%
10%
0%
1961 1972 1978 1990 2000 2002 2004 2006 2008
Source: http://www.cdc.gov/NCHS/data/hestat/obesity_adult_07_08/obesity_adult_07_08.pdf
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3. Exhibit 2 – Projections of Obesity Under
Optimistic and Pessimistic Scenarios
55%
US female - Pessimistic
50%
US female - Optimistic
45% US male - Pessimistic
40% US male - Optimistic
35%
Assumes U.S.
30%
women will maintain
25% recent progress
20%
15%
1988 1992 1996 2000 2004 2008 2012 2016 2020 2024 2028
Source: Y. Claire Wang, Klim McPherson, Tim Marsh, Steven L Gortmaker, Martin Brown. “Health and economic
burden of the projected obesity trends in the USA and the UK ,” Lancet, 2011; 378: 815–25. 1
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4. Exhibit 3 – Percentage Overweight in the
US, England, Canada and France
80%
Canada adjusted for underreporting
70%
Proportion overweight
60%
United States
50%
40% Canada
England
30%
France
20%
1970 1980 1990 2000 2010 2020
Source: http://www.oecd.org/document/57/0,3746,en_2649_33929_46038969_1_1_1_1,00.html. Canadian
undercount - http://www.parl.gc.ca/Content/LOP/ResearchPublications/prb0511-.
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5. Exhibit 4 –
Increased Spending Associated with Being Obese:
Percentage Increase by Payer and Service
(in 2008 dollars)
30%
Inpatient
25% Non-inpatient
Rx drugs
20% Total
18.1% 17.1%
15.2% 15.2%
15% 12.9%
11.9%
11.8%
10.3%
10% 9.1% 8.5% 8.5% 9.1%
5.9%
5%
n/s* n/s*n/s*
0%
Medicare Medicaid Commercial Total
n/s = No statistically significant difference attributable to obesity.
Source: Eric A. Finkelstein, Justin G. Trogdon, Joel W. Cohen, and William Dietz, “Annual Medical Spending Attributable to
Obesity: Payer and Service Specific Estimates.” Health Affairs
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6. Exhibit 5 –
Increased Spending Associated with Being Obese:
Dollar Increase by Payer and Service
(in 2008 dollars)
$160
$146.6
$140 Inpatient
Non-inpatient
$120 Rx drugs
$100 Total
$80 $74.6
$69.3
$60 $45.2
$44.7
$34.3 $31.5
$40 $24.8
$27.6
$12.1 $18.3
$20 $13.8 $5.1
$1.9 n/s*n/s*
$0
Medicare Medicaid Commercial Total
n/s = No statistically significant difference in spending attributable to obesity.
Source: Eric A. Finkelstein, Justin G. Trogdon, Joel W. Cohen, and William Dietz, “Annual Medical Spending Attributable to
Obesity: Payer and Service Specific Estimates.” He
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7. Exhibit 6 –
CBO Projected Prevalence of Obesity and Health Care
Spending per Adult in 2020 Under Alternative Scenarios
100% Percentage of adults who are obese
90% Spending per adult percentage change, 2007–2020
80%
71%
70% 65%
59%
60%
50%
40% 37%
28%
30%
20%
20%
10%
0%
Scenario 1: Scenario 2: Scenario 3:
Distribution by Distribution by Body Weight Distribution of Body Weight
Body Weight Remains Changes at the Average Annual Returns to the 1987 Distribution
Unchanged from 2007 Rates for the 2001–2007 Period by 2020
Source: Duchovny, N. and Baker, C., "How Does Obesity in Adults Affect Spending on Health Care?." Economic and Budget
Issue Brief, Congressional Budget Office, September 8, 2010.
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8. Exhibit 7 - Interactions Between
Medicine and Economics
Cost Increasing
Clinically effective Clinically ineffective
Cost Saving
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9. Exhibit 8 – Cost Per Quality-Adjusted Life-Year (QALY)
Saved Of Interventions to Prevent or Reduce Obesity
ESTIMATED COST PER
INTERVENTION DESCRIPTION QALY SAVED REFERENCE
SCHOOL-BASED INTERVENTION
Coordinated Approach Comprehensive
to Child Health intervention in $900 Brown et al. (2007)11
(CATCH) elementary schools
Planet Health Comprehensive $4,305 for females; not Wang et al. (2003)13
intervention in middle effective for males
schools
COMMUNITY-BASED INTERVENTION
Wheeling Walks Communitywide
campaign using paid
media to encourage $14,286 Reger-Nash (2004)16
walking among
sedentary adults
Stanford Five-City An integrated, Young (1996)18
Project community-wide health
education intervention $68,557
for improving physical
activity. 9
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10. Exhibit 8 – Cost Per Quality-Adjusted Life-Year (QALY)
Saved Of Interventions to Prevent or Reduce Obesity
ESTIMATED COST PER
INTERVENTION DESCRIPTION QALY SAVED REFERENCE
Walking to meet health Training session involving
guidelines walking maps and Lombard
$27,373
handouts on strategies and (1995)20
support maintaining a
walking program.
Environmental change Exposure to a more active
lifestyle (bike paths, fitness $28,548 Linenger
center, cycling, running). (1991)22
Behavioral therapy; Use of personal trainers,
personal trainers and behavior-therapy, financial $29,759 Jeffery
incentives incentives, and calls to (1998)24
increase physical activity
Diabetes Prevention Intensive program for
Program (DPP) adults at-risk of type 2 Knowler (2002)26
$46,914
diabetes. Exercise, diet
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and behavior modification.
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11. Exhibit 8 – Cost Per Quality-Adjusted Life-Year (QALY)
Saved Of Interventions to Prevent or Reduce Obesity
ESTIMATED COST PER
INTERVENTION DESCRIPTION QALY SAVED REFERENCE
PHARMACEUTICAL INTERVENTION
Anti-obesity drug that
inhibits absorption of, $8,327 Maetzel et al
Xenical (orlistat)
and promotes excretion (2003)29
of, dietary fat.
SURGICAL INTERVENTION
Gastric bypass (older) Limits food intake by $5,000–$16,100 for women, Craig and
reducing the effective $10,000–$35,600 for men Tseng (2002)33
size of the stomach and
bypassing part of the
small intestine.
Gastric bypass (newer) Limits food intake by BMI – 40-50, Chang, et al. (2011)34
reducing the effective ORD $1,853, No ORD $3,770
size of the stomach and BMI – 50+,
bypassing part of the ORD cost saving, No ORD
small intestine $1,904
ORD – obesity-related
disease.
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12. Exhibit 8 – Cost Per Quality-Adjusted Life-Year (QALY)
Saved Of Interventions to Prevent or Reduce Obesity
ESTIMATED COST PER
INTERVENTION DESCRIPTION QALY SAVED REFERENCE
WORKPLACE INTERVENTION
Workplace Wellness Variety of interventions $3.27 drop in medical Baicker, Cutler, and Song
Programs (more recent) reviewed in a meta- expenses for every $1 (2010)38
analysis of evaluations spent on wellness programs
done on employer-
sponsored wellness
plans; typical
interventions include
baseline health indicators,
educational materials, and
individual and group
exercise.
Workplace Wellness Emphasis on weight 26 percent reduction in Chapman (2005)39
Programs (less recent) control and reduction of medical costs from
chronic disease risk employer wellness
factors. initiatives
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