Obesity Rates Hurt Economy

obeseeatingAn informative article written by Jackie Marchildon in Arbitrage Magazine entitled Obesity Rates Hurt Economy. This article is important to read, as it does help explain why many governments are looking into ‘why they should get involved’ in the obesity epidemic. As the author states, Rising obesity rates aren’t just weighing down our population — they are weighing down the economy too. Thanks to recent changes in healthcare, the ACA affordable care act offers much more coverage for those coping with obesity. In Canada, obesity costs the Canadian economy between $4.6 and $7.1 billion per year. Direct costs are associated with obesity-related illnesses such as asthma, weak joints, cancer, type 2 diabetes, and heart disease. The fact is that people that are heavily overweight or obese have higher medical care costs, substantially higher. And those elevated costs aren’t just paid by the obese person himself – they are paid for by everybody in the same insurance plan or by you, the tax payers, to the extent that people are covered by public health. Please visit the Arbitrage Magazine web site (link provided below) to read the complete article. It is well written and informative.”

From the article…..

Obesity rates may be negatively impacting the economy

Rising obesity rates aren’t just weighing down our population — they are weighing down the economy too.

According to the latest obesity report from the Canadian Institute for Health Information (CIHI) and the Public Health Agency of Canada (PHAC), obesity costs the Canadian economy between $4.6 and $7.1 billion per year. Lisa Corscadden, a program consultant at CIHI involved in writing the report, explains that these costs are both directly and indirectly associated with obesity.

Direct costs are associated with obesity-related illnesses, while indirect costs are related to issues like short and long-term disability. Although Corscadden would not directly affirm that an obese person requires more medical attention, and therefore more funding, the report insinuates this to be true.

Cornell University Professor John Cawley argues exactly that. His primary field of study is on health economics, specializing in the economics of obesity.

“The fact is that people that are heavily overweight or obese have higher medical care costs, substantially higher. And those elevated costs aren’t just paid by the obese person himself – they are paid for by everybody in the same insurance plan or by you, the tax payers, to the extent that people are covered by public health,” Cawley explains.

This means that there are external costs of obesity and not just costs inflicted upon the obese person themselves. This, according to Cawley, is the economic rationale that should compel the U.S. government to step in and do something about obesity.

In developed countries like Canada and the United States, obesity rates are quickly rising. In Canada, the percentage of obese adults has doubled in the last 30 years. In children and youth the dominance of obesity has tripled.

While there are obvious negative effects of obesity on individuals themselves, such an increased risk of heart disease or diabetes, the effects of obesity on the economy are not as evident.

“In a situation like this, where people aren’t fully confronted with the consequences of their actions, it is the role of the government to step in and help people confront the full costs of their actions and avoid these kinds of cost spillovers to third parties,” says Cawley.

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