Economics of obesity prevention

Through my association with APR Consultants, I’ve been doing a lot of reading and thinking lately about physical activity, healthy eating and the economics of obesity prevention. Below is an extract from a draft stakeholder briefing we are currently compiling for the Hawke’s Bay Community Fitness Centre Trust, based on a review of recent and relevant research literature…

“Due to increasingly sedentary lifestyles, over-eating and unhealthy diets, along with an ageing population and increasing medical treatment costs, the direct health cost burden of obesity is rising rapidly. This includes increasing costs of visits to doctors, physiotherapists and other health professionals, pharmaceutical costs, laboratory testing services, hospital stays and a wide range of other expenses.

Just as significant are the indirect costs of obesity, including lower work productivity, lower self-esteem associated with poor body image, reduced quality of life and early death.

The direct and indirect costs of obesity are estimated here to be between $1,200 and $3,600 per obese person per annum. For example, according to the New Zealand Treasury database of social costs, total annual health care cost for a person with diabetes is $3,100 compared to $700 for people without diabetes—a difference of $2,400 per year. The marginal difference for avoiding cardiovascular disease is even higher at $4,800 per year. Other marginal costs are associated with a wide range of other obesity-related disorders.

The figures above are direct health costs only. They exclude indirect costs such as lower work productivity or early death. The value of a single quality-adjusted life year in New Zealand is more than $45,000, hence the marginal health and indirect costs of obesity may be much higher than the upper range of $3,600 for this analysis.

Based on these figures, the regional cost of obesity in the Hawke’s Bay is estimated to be between $60 and $180 million per annum. Even assuming the lower amount of $60 million, the regional net present cost is more than $1 billion when summed over the course of a generation. Comparatively small investments to address obesity today have the potential to greatly decrease future health costs and improve the region’s wellbeing and prosperity for generations to come…”