United States | July 31, 2012 at 1:00 pm

Weighing Down the U.S. Economy

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It doesn’t take an expert to know that the American economy is less than healthy. As the United States suffers from sluggish growth and bloated budgets, the prognosis looks pretty bleak.

In light of this, our leaders in Washington have discussed various remedies to cure our broken economy in the short and medium term. What has received less attention is the economy’s long-run outlook. And given that the cost of healthcare is projected to rise steadily over the next few decades, it certainly deserves attention beyond continuing debates over the Affordable Care Act. In particular, America can make a difference by focusing on the cost of obesity.

Obesity: A Pandemic in the US

Some medical professionals and public health experts are now calling obesity a pandemic in the United States. The rate of obesity is not only high, but it is growing. This is best demonstrated by an animated map from the CDC which shows the obesity prevalence in each state from 1985 through 2010. The lesson of this map is that obesity is spreading throughout America, and has been for quite some time.

Source: The Centers for Disease Control

Looking back at the data reported to the CDC, about 15.9 percent of all adults were obese in 1995. In 2000 it was 20 percent, and in 2005 it was 24.4 percent. As of 2010, the rate had risen to 27.5 percent, having risen almost 12 percentage points in a 15 year period. This has alarmed the medical world as it seeks ways to buck this seemingly inexorable trend.

But obesity’s prevalence is not the only reason for concern; what concern public health experts are the other health conditions associated with obesity including, but not limited to, Type II Diabetes, heart disease, hypertension, and problems with reproductive and sexual health.

Increasing Healthcare Costs

Obesity presents a basic problem: as the rate of obesity increases in the United States, so too does the cost of our healthcare. To put a number behind this, Health Affairs reported that in 2008, $147 billion of our medical expenses, or 10% of total health expenditures, were obesity related.

But this is not only a concern for private healthcare insurance  holders. Medicare and Medicaid picked up $61.8 billion of these costs. In the absence of obesity, these programs would reduce their expenditures by approximately 8.5 and 11.8 percent, respectively.

Source: www.draxe.com

The bottom line is that obese people spend on average 40 percent more for their healthcare costs than do more weight-healthy individuals. As more and more people become overweight, healthcare expenditures around the nation will undoubtedly go up. This helps explain why current projections show that healthcare costs will constitute more than 19 percent of US GDP in 2020.

How Healthcare Costs Are Related to Unemployment

All of those who are currently looking for work in this economy might wonder why it is so darn difficult to find a job. The answer in one sense is simple: there have been losses in public sector jobs as local government budgets have been cut, and businesses have not been hiring at a fast-enough pace. Answering the question of why this has been the case is more complicated. One not so obvious reason is the increasing cost of healthcare.

Most people under the age of 65 receive healthcare from their employer as part of a larger benefits package. When the cost of healthcare rises, there is a tradeoff: employers spend more money on healthcare premiums and less money on raises and new workers. Hence, employer budgets are being spent on maintaing the same benefits for their employees, which has led to slower hiring in the private sector and pink slips in the public sector.

How Healthcare Costs Are Related to Productivity and Costs for Employers

Additionally, obesity adversely affects the American economy by dampening productivity and raising costs for employers. If one is obese, one is more likely to be sick, and thus is more likely to take days off of work. In fact, the cost for obesity-related absenteeism on employers is approximately $4.3 billion per year.

The estimated loss for employers as a result of lower productivity is currently about $506 per obese individual annually. And because obese individuals file more medical claims, they are a root cause of increasing healthcare expenditures for employers around the nation.

Today America prides itself on being the most productive nation in the world; however, the future of American productivity may be at risk as obesity becomes a more common phenomenon in the American workforce.

Achieving America’s Economic Potential

Problems related to obesity will undoubtedly hinder American economic growth in the years to come, and even today are a contributing factor to the slow turn-around of the economy. In fact, while many states have taken great measures to balance their budgets, the rising cost of healthcare has become the single greatest threat to their fiscal order going forward.

The national, state, and local governments, large and small businesses, and the citizens of America are feeling the pain of the higher cost of health services, more unemployment, and lower productivity that result from obesity.

Therefore, if we do not address this issue and initiate efforts such as the Let’s Move campaign, founded by First Lady Michelle Obama to educate children and parents in America about healthier eating and exercise, obesity will prevent America from reaching its economic potential going forward.

PHOTO CREDIT: Wikimedia Commons

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