How Obesity Causes Big Problems For the Economy

Source: Thinkstock

Source: Thinkstock

In the U.S. today, more than one-third of adults are obese, according to the Centers for Disease Control and Prevention (CDC). As a nation, America has the highest obesity rate of any country in the world. This shouldn’t be news to anyone; the “obesity epidemic” has been ongoing for well over a decade now. But while readers may have heard plenty about the health implications of rising obesity rates, much less is known about the economic consequences of the disease. A recent study, conducted by the McKinsey Global Institute, sought to find out exactly how much obesity costs the world, and additionally sought to find clues as to the most effective measures for combating the disease.

A global problem

It’s easy to assume that because the United States is the country with the largest obesity problem, we are simultaneously the only country with an obesity problem. But that simply isn’t true, and in fact, some of the fattest countries in the world might come as a surprise to many readers. The McKinsey Institute found, for instance, that Saudi Arabia, the United Arab Emirates, Mexico, and South Africa rounded out the top five biggest nations in the world. Perhaps even more unexpectedly, the study notes that in many of China’s largest metropolises more than half the population is overweight. Obesity truly is a global issue.

The McKinsey Institute notes that worldwide, there are more than 2.1 billion people who qualify as overweight or obese, a figure which amounts to an astounding 30% of the population. The study also found that there are actually more people who are overweight or obese than there are adults and children who are undernourished across the globe.

“It seems that many of the emerging markets that are on this phenomenally fast growth trajectory are on an even faster obesity trajectory,” said Richard Dobbs, head of the McKinsey Global Institute and one of the authors of the study, in an interview with NPR.

Unfortunately, due in part to rising middle classes among developing nations (such as China) and a lack of effective solutions on the part of nations already struggling to combat the condition, the world’s obesity epidemic is predicted to escalate over the next decade. The McKinsey study predicts that “if the prevalence of obesity continues on its current trajectory, almost half the world’s population will be overweight or obese by 2030.”

Source: iStock

Source: iStock

Hefty health care costs

Dobbs notes that with obesity, the world faces an interesting challenge. “We are fighting thousands of years of evolution,” he told NPR. “Our bodies have a natural inclination to want to horde energy when we have it available. [We want] to horde food and to horde fat.”

The World Health Organization (WHO) has noted that another issue is that diets have shifted to favor low-nutrient, high-calorie and high-fat food. As a result, and somewhat ironically, “it is not uncommon to find under-nutrition and obesity existing side by side within the same country, the same community and the same household.”

Another part of the problem has been the decreasing cost of food, paired with rising incomes. “In the United States, the share of average household income spent on food fell from 42% in 1900 to 30% in 1950 and to 13.5% in 2003,” the report notes, per NPR. Compare that to some of the world’s poorest developing nations, where it is not uncommon for families to spend 40% or more of their income on food, and you can see that part of our problem is, ironically, our wealth.

The estimated annual medical cost of obesity in the U.S. alone was $147 billion in 2008, and the medical costs for people who are obese were $1,429 higher than those of normal weight, the CDC found. Yet the McKinsey study has found that the global price tag for obesity is even higher, estimating that obesity costs the world more than $2 trillion every year, roughly the same economic impact as smoking or an armed conflict, according to the report.

Much of that $2 trillion goes to treatments for diseases related to obesity, such as Type 2 diabetes, but a lot of it also amounts to “productivity costs.” Dobbs points out that people who are obese often work less, and need to take more time off because they are sick; they also usually suffer from shortened lifespans.

Obesity is responsible for around 5% of global deaths, and “the global economic impact from obesity is roughly $2 trillion, or 2.8% of global GDP, roughly equivalent to the global impact of smoking or armed violence, war, and terrorism.” According to WHO, about 3.4 million adults die every year because they are overweight or obese.

Interestingly, with improving healthcare systems, many people who are overweight or obese are living longer lives. The catch though, is that they are costing health care systems more, and their overall quality of life is significantly reduced, as obese individuals tend to get sick more often, and are prone to a number of diseases linked to their weight.

A multi-layered solution

Perhaps unsurprisingly given the complexity of the problem, the McKinsey study found that “no single solution creates sufficient impact to reverse obesity: Only a comprehensive, systemic program of multiple interventions is likely to be effective.” The study evaluated some 74 different possible measures to combat obesity in 18 different areas. Among them are interventions such as portion control for packaged and fast foods, changing up physical education curricula in schools, and overhauling urban transportation systems to encourage bicycling and discourage cars. The McKinsey Institute notes that interventions which go beyond relying on individual willpower are especially necessary.

Portion control, weight management programs, and parental education were among the most effective and least costly interventions studied, according to the McKinsey Institute.

Dobbs says that an effective program to combat obesity would likely need to be “a combination of top-down corporate and government interventions, together with bottom-up community led ones,” though the study’s authors caution that the effort is akin to “the maps of 16th century navigators,” noting that there is still much to be learned and “filled in” on the road map to combatting obesity. The study advocates “trial and error” as the best method to discovering a long-term solution for what is quickly becoming one of the world’s most devastating health conditions.

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