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The Bulging Costs Of America’s Obesity Epidemic

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

A month ago we chronicled what we consider one of the biggest problems for America’s long-term viability in “No Country For Thin Men: 75% Of Americans To Be Obese By 2020” which goes straight to the heart of the biggest shortfall in America’s balance sheet: the net present value of future spending associated with Medicare and various other healthcare related programs, which will sadly only rise as more and more Americans become morbidly obese, and demand more expensive health service out of the piggy bank that even now has tens of trillions in unfunded liabilities. And while the future is certainly not bright, the past and present are just as bleak. A Reuters report focuses on just how it is that America got to where it is today (most likely sitting in front a computer, eating potato chips and drinking sugar-laden soda): “The percentage of Americans who are obese (with a BMI of 30 or higher) has tripled since 1960, to 34 percent, while the incidence of extreme or “morbid” obesity (BMI above 40) has risen sixfold, to 6 percent. The percentage of overweight Americans (BMI of 25 to 29.9) has held steady: It was 34 percent in 2008 and 32 percent in 1961. What seems to have happened is that for every healthy-weight person who “graduated” into overweight, an overweight person graduated into obesity.” Which is not surprising: with pink and white slime food substitutes (as an example) allowing more and more low income individuals to drown their sorrows in fat (aka high calorie dollar meals) it was only a matter of time. Sadly, there is nothing in the equation that indicates this is set to change any time soon, even as the all too real costs, to both the individual and to society, mount in an exponential manner.

Here is a sample of how America’s obesity epidemic is causing not just the average circumference of Americans to explode, but also how it is sending private and public sector costs and expenses through the stratosphere:

  • U.S. hospitals are ripping out wall-mounted toilets and replacing them with floor models to better support obese patients.
  • The Federal Transit Administration wants buses to be tested for the impact of heavier riders on steering and braking.
  • Cars are burning nearly a billion gallons of gasoline more a year than if passengers weighed what they did in 1960.
  • Because obesity raises the risk of a host of medical conditions, from heart disease to chronic pain, the obese are absent from work more often than people of healthy weight. The most obese men take 5.9 more sick days a year; the most obese women, 9.4 days more. Obesity-related absenteeism costs employers as much as $6.4 billion a year, health economists led by Eric Finkelstein of Duke University calculated.
  • The very obese lose one month of productive work per year, costing employers an average of $3,792 per very obese male worker and $3,037 per female. Total annual cost of presenteeism due to obesity: $30 billion.
    • Obese men rack up an additional $1,152 a year in medical spending, especially for hospitalizations and prescription drugs, Cawley and Chad Meyerhoefer of Lehigh University reported in January in the Journal of Health Economics.
    • Obese women account for an extra $3,613 a year. Using data from 9,852 men (average BMI: 28) and 13,837 women (average BMI: 27) ages 20 to 64, among whom 28 percent were obese, the researchers found even higher costs among the uninsured: annual medical spending for an obese person was $3,271 compared with $512 for the non-obese.
  • Nationally, that comes to $190 billion a year in additional medical spending as a result of obesity, calculated Cawley, or 20.6 percent of U.S. health care expenditures.

And guess who ends up eating (no pun intended) the shortfall? You:

  • Those extra medical costs are partly born by the
    non-obese, in the form of higher taxes to support Medicaid and higher
    health insurance premiums. Obese women raise such “third party”
    expenditures $3,220 a year each; obese men, $967 a year, Cawley and
    Meyerhoefer found.

That is only the beginning:

The startling economic costs of obesity, often borne by the non-obese, could become the epidemic’s second-hand smoke. Only when scientists discovered that nonsmokers were developing lung cancer and other diseases from breathing smoke-filled air did policymakers get serious about fighting the habit, in particular by establishing nonsmoking zones. The costs that smoking added to Medicaid also spurred action. Now, as economists put a price tag on sky-high body mass indexes (BMIs), policymakers as well as the private sector are mobilizing to find solutions to the obesity epidemic.

The private sector is starting to take steps to trim America’s fat, so to say, with negative reinforcement:

The U.S. health care reform law of 2010 allows employers to charge obese workers 30 percent to 50 percent more for health insurance if they decline to participate in a qualified wellness program. The law also includes carrots and celery sticks, so to speak, to persuade Medicare and Medicaid enrollees to see a primary care physician about losing weight, and funds community demonstration programs for weight loss.

Naturally, in a country which loathes negative reinforcement more than anything (as it involved work to undo retroactive shortfalls), cries of discrimination against fat people are reaching fever pitch:

Such measures do not sit well with all obese Americans. Advocacy groups formed to “end size discrimination” argue that it is possible to be healthy “at every size,” taking issue with the findings that obesity necessarily comes with added medical costs.

Oddly enough, nobody had a problem with smokers being stigmatized: after all while eating is optional, even stuffing your mouth with the worst filth imaginable, it is simply unamerican to blame someone for eating. Smoking is a different matter entirely. Yet when one cuts to the chase, smoking is a far lower financial drag on society than fatness (sic):

One recent surprise is the discovery that the costs of obesity exceed those of smoking. In a paper published in March, scientists at the Mayo Clinic toted up the exact medical costs of 30,529 Mayo employees, adult dependents, and retirees over several years.

 

“Smoking added about 20 percent a year to medical costs,” said Mayo’s James Naessens. “Obesity was similar, but morbid obesity increased those costs by 50 percent a year. There really is an economic justification for employers to offer programs to help the very obese lose weight.”

And here we get into some rather Mengelian demographic reverse eugenics:

For years researchers suspected that the higher medical costs of obesity might be offset by the possibility that the obese would die young, and thus never rack up spending for nursing homes, Alzheimer’s care, and other pricey items.

 

That’s what happens to smokers. While they do incur higher medical costs than nonsmokers in any given year, their lifetime drain on public and private dollars is less because they die sooner. “Smokers die early enough that they save Social Security, private pensions, and Medicare” trillions of dollars, said Duke’s Finkelstein. “But mortality isn’t that much higher among the obese.”

In other words, those damn fat people just refuse to die. One is unsure whether to laugh or cry that this is the kind of prudent financial analysis that would carry tens, if not hundreds of trillions in unfunded medical costs. And yet, that’s precisely what it is.

Where one does have to laugh is when extrpolating physical events as a result of obesity. Such as gas prices.

Some costs of obesity reflect basic physics. It requires twice as much energy to move 250 pounds than 125 pounds. As a result, a vehicle burns more gasoline carrying heavier passengers than lighter ones.

 

“Growing obesity rates increase fuel consumption,” said engineer Sheldon Jacobson of the University of Illinois. How much? An additional 938 million gallons of gasoline each year due to overweight and obesity in the United States, or 0.8 percent, he calculated. That’s $4 billion extra.

It gets better:

The built environment generally is changing to accommodate larger Americans. New York’s commuter trains are considering new cars with seats able to hold 400 pounds. Blue Bird is widening the front doors on its school buses so wider kids can fit. And at both the new Yankee Stadium and Citi Field, home of the New York Mets, seats are wider than their predecessors by 1 to 2 inches.

 

The new performance testing proposed by transit officials for buses, assuming an average passenger weight of 175 instead of 150 pounds, arise from concerns that heavier passengers might pose a safety threat. If too much weight is behind the rear axle, a bus can lose steering. And every additional pound increases a moving vehicle’s momentum, requiring more force to stop and thereby putting greater demands on brakes. Manufacturers have told the FTA the proposal will require them to upgrade several components.

Leave it to Keynesians to justify away fatness:

Yes, a heart attack will generate economic activity, since the surgeon and hospital get paid, but not in a good way,” said Murray Ross, vice president of Kaiser Permanente’s Institute for Health Policy. “If we avoided that heart attack we could have put the money to better use, such as in education or investments in clean energy.”

From Broken Window to Busted Ticker falacy. Brilliant.

The best news, however, is that at least the fat are as docile as Hindu cows (just before they are eaten in the local McDonalds):

The books on obesity remain open. The latest entry: An obese man is 64 percent less likely to be arrested for a crime than a healthy man. Researchers have yet to run the numbers on what that might save.

And so it goes on.

As noted, while we are unsure whether to laugh or cry, the sad conclusion sticks out like an overflowing midsection: spending related to America’s obesity epidemic will merely continue to rise. One can argue about the behvioral reasons for this propensity of Americans to chew the fat until one is blue in the face, but the truth is that until cheap, low quality food is easily accessible, as long as a sedentary lifestyle is dominant (and with more and more working in front of a computer all day long this won’t change any time soon), and as long as healthcare is supposedly prefunded and exists to everyone, the problem will only get worse.

So go out, have that $0.99 cent meal, and enjoy life. Because a stray heart attack is only a few cholesterol molecules away.


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