Annex 1: The economic costs of obesity:
A note prepared by the Scrutiny Unit, Clerk's Department, House
1. This annex sets out to give a broad estimate of
the cost of obesity in England. It uses the methodology employed
by the NAO in Tackling Obesity in England. It updates the
data used in that report, from 1998 figures to the latest available,
which is 2002 in most cases. It extends the coverage of the calculations
to look at a wider range of diseases that are attributable to
obesity. It looks at future costs in a very general way. It makes
no specific cost estimates, but identifies the driving forces
and how increases in costs might differ from increases in the
prevalence of obesity.
2. Tackling Obesity in England estimated that
the direct cost of treating obesity and its consequences was £480 million
(1.5% of NHS expenditure) and indirect costs (loss of earnings
due to sickness and premature mortality) amounted to £2.1 billion.
Both figures relate to 1998. A total projected figure of £3.6 billion
was given for 2010. On numerous occasions the authors state that
they believe various elements to either be conservative estimates
or underestimates, due to the exclusion of a number of elements
or a lack of data in certain areas:
We have deliberately produced conservative estimates
to raise their credibility as the basis of further discussion
of this report in the face of a number of uncertainties.
3. Some of the more expensive areas that were not
included (for various reasons) include social care, lipid regulating
drugs, appointments with primary care practitioners other than
GPs, and the costs of depression and lower back pain attributable
to obesity. The report's estimate was a point figure, rather than
a range. Presumably this figure would have been at the bottom
of any range estimate that would have been given.
4. Tackling Obesity in England mentioned that
estimates of the direct costs of treating obesity from other countries
with similar levels of obesity varied from 2-6% of health spending.
If such a range applied to England then the costs would have been
between £0.7 and £2.1 billion in 1998. The NAO
figure was therefore lower than any of these 'comparable' countries.
The table below summarises cost estimates for all countries alongside
data on obesity levels. It shows the percentage cost figure for
England at joint lowest with France. At the time of the estimates
the rate of obesity in France was around one-third of the level
in England, of the countries shown only the US had a higher level.
The table only gives two recent estimates for the US. Studies
from the mid-1980s to the mid 1990s gave a range of 5.5-7.8%.
5. Overall the table shows a wider range of estimates
but an inconsistent link between higher obesity and higher costs.
If we ignore England then at the extremes more obesity means a
higher cost estimate and vice versa, but the picture is
more mixed for the other countries. Given the very different use
of cost estimation methods, definitions of obesity, population
structures and systems of healthcare it would be remarkable if
there were a simple linear relationship. It is highly likely that
the very large range shown is in part due to differing methodologies
and is presumably the most likely reason why the figure for England
is where it is. It is particularly noticeable that only the US
has multiple estimates (six since 1986). These have varied considerably.
Having a range of estimates can improve the debate about the economic
impacts of obesity.
6. There are even fewer estimates of the indirect
costs of obesity from other countries. A study in the US estimated
the indirect costs at slightly less than the direct costs ($47.6 billion,
compared to $51.2 billion in 1995, uprated to $61 billion
and $56 billion in 2000).
It is difficult to make any direct comparisons with the estimates
for England, but the most striking difference is that indirect
costs were smaller in the US estimate, but were over four times
greater in the estimate for England.
7. As mentioned earlier, the same basic methodology
employed by the NAO is used for these calculations. The limitations
outlined in Tackling Obesity in England should therefore
be borne in mind when interpreting all the estimates in this Annex.
There are some improved data sources that have recently become
available, most notably NHS Reference Costs which give
much more detailed and accurate cost information for different
8. GP consultations The unit cost figure
for GP consultations used here is from the same source as the
NAO figure, but
also includes an element for direct care staff. As with the NAO
figure there is no direct estimate of the costs of other primary
practitioners. There is also no more up to date information on
consultations for obesity. The 1991-92 figures are still the most
up to date and comprehensive consultation rates.
Assuming that the number of consultations has increased in line
with the prevalence of obesity
then costs would be in the region of £12-15 million.
While simply increasing consultation figures by the percentage
increase in obesity is a crude method, the alternative is to simply
ignore the 50% increase in obesity since 1991-92.
9. Ordinary admissionsUsing data on
admissions for 2002-03
and the latest cost figures
gives an estimate of around £2 million. The actual number
of admissions for obesity fell by almost 25% between 1998 and
10. Day casesThe number of day cases
has increased slightly, but they are still very small in number
at 360 in 2001-02. The estimated cost is £0.12 million.
11. Outpatient attendancesThe number
of outpatient attendances are uprated in the same way as GP consultations.
Combined with a slightly higher unit cost the estimate is £0.5-0.7 million.
12. PrescriptionsThe total cost for
all obesity-related drugs has increased rapidly since 1998 with
the licensing of orlistat. The total cost in 2002 was £31.3 million.
The chart below illustrates the pace of growth. Over the same
period the number of prescriptions for orlistat increased from
18,000 to over 540,000. This may have resulted in a greater increase
in GP consultation than that assumed earlier.
13. When combined this gives a total estimated cost
for treatment of between £46 million and £49 million.
This is around four times the NAO figure, the vast majority of
this increase being due to the increase in drug costs. The breakdown
of this estimate and that produced by the NAO are given below.
14. The real level of uncertainty is somewhat greater
than that indicated in the table as the unit costs chosen are
necessarily somewhat inexact. However, the most precise information
is produced for prescription costs, the largest element, so there
is a relatively small amount of uncertainty about this estimate.
Treating the consequences of obesity
15. The box opposite lists diseases and complications
that are most often linked to obesity.
Those in bold were included and costed by the NAO. A number of
the others were explicitly excluded. Just because a particular
disease or condition has been linked in publications relating
to obesity does not necessarily mean that there is research showing
a significantly higher risk. In some cases the evidence is rather
weak, mixed or absent. In others the diseases/conditions are far
too unspecific to quantify, like 'reproductive problems' or 'surgical
problems'. The evidence for these is more anecdotal.
lower back pain (among women only),
and sleep apnoea.
Of the remaining diseases/conditions depression has the greatest
potential for altering any estimate of the cost of obesity.
17. The methodology for calculating total costs of
these diseases is the same as that used for obesity. New estimates
of the percentage of cases attributable to obesity were calculated
for the additional diseases and updated for the original ones
to take account of the increased prevalence of obesity between
1998 and 2002. Some further comments specific to these diseases
are given below.
18. The following table shows estimates of the costs
of treating the consequences of obesity for 2002 and compares
this to the original estimates. Each element, and the total, is
given a range to reflect the remaining uncertainty about the precise
number of cases attributable to obesity.
19. The largest increase in percentage terms was
in the cost of day cases; however at £5-10 million the
actual increase was relatively small. The largest increase in
cash terms was in the cost of prescriptions at around £225-275 million.
The cost of outpatient attendances increased by the smallest proportion.
Within individual diseases hypertension was still the most costly
with a total of £225-275 million estimated as attributable
to obesity. The next most costly was one of the additional co-morbidities
added for this exercisehyperlipidaemia. Its total attributable
cost is estimated at £170-190 million, virtually all
due to the cost of lipid regulating drugs. This group is dominated
by the statinsthe National Service Framework on Coronary
Heart Disease recommended their use and the total cost of such
drugs dispensed increased more than three-fold between 1998 and
2002. They are now the most expensive drug group and their total
cost is increasing at the fastest rate.
20. In total the additional co-morbidities accounted
for just over 20% of this estimate or £200-225 million.
This is equivalent to around 40% of the difference between this
estimate and the one in Tackling Obesity in England. The
greater prevalence of obesity between 1998 and 2002 accounted
for 12% of this difference and increased drug costs, take-up and
availability a further 20%. It is not possible to say how much
of the remaining increase was due other factors, like higher NHS
costs or improved data.
21. Data from the 12 months to June 2003 show continuing
significant increases in the cost of the drug groups that contribute
most to the estimates above. Lipid-regulating drugs, anti hypertensive
therapy and drugs used in diabetes saw the three largest increases
in total costs, up a combined 23%, or just under £300 million.
The implication of this for the costs of obesity is that the main
element of expenditure is still increasing at a rapid pace, well
above what might be expected from increases in the prevalence
of these diseases alone.
All direct costs
22. The estimates in the previous two sections combine
to give a total range for the direct costs of treating obesity
and its consequences of £990-1,225 million (2.3-2.6%
of net NHS expenditure in 2001-02), more than double the figure
for 1998 given in Tackling Obesity in England. All the
limitations of that estimate apply to the updated version, specifically
the exclusion of any social care data, incomplete data on primary
care, reliance on international data on relative risk and the
approximate nature of unit costs. All these must be considered
when drawing any conclusions from these estimates. The lack of
cost data in certain important areas and the number of associated
diseases that have not been included means that these figures
are still likely to underestimate the true cost of treating obesity
and its consequences.
23. There is no need to include additional co-morbidities
in the cost estimate for years of life lost as the NAO estimate
used research that covered mortality from all causes. Applying
the latest data on obesity rates by age and sex gives a figure
of 34,100 deaths and around 45,000 attributable years of working
life lost; an increase of 13% on the 1998 figures. Applying 2002
data on earnings
gives a total estimated cost due to premature mortality of £1.05-1.15 billion.
This is an increase of around 20% on the 1998 figure from Tackling
Obesity in England. This effect of higher wages and employment
figures is broadly the same as the increased number of deaths
resulting from higher obesity levels.
24. The overall number equates to 6.8% of deaths
in England. While this is a significant number the World Health
Organisation estimates that in developed countries 9.6% of deaths
among men and 11.5% among women are due to overweight and
these rates to deaths in England in 2001 gives a total of 52,500.
25. Incapacity Benefit data was obtained from the
Department for Work and Pensions on claimants with obesity and
the other co-morbidities. This implied that there were 15.5-16 million
attributable days of certified incapacity. This is equivalent
to lost earnings of £1.3-1.45 billionused as
a proxy for production losses under the "human capital"
approach. The range of this estimate goes from £20 million
less than the 1998 figure to £130 million above.
The estimated number of attributable days of incapacity is more
than 10% below the estimate given for 1998, despite the inclusion
of additional co-morbidities. Between 1998 and 2002 average daily
earnings increased by 17.5%. The additional co-morbidities accounted
for £190-210 million of this increase. The vast majority
of this was for back pain. The relative risk of obese people developing
back pain is quite small and only statistically significant for
women. In these calculations only 5% of days of certified incapacity
for lower back pain were attributable to obesity.
26. As indicated in Tackling Obesity in England
the number of days of sickness attributable to obesity is an underestimate
as it excludes self-certified days of sickness. This is counter-balanced
by the fact that the obese group earns less than the national
average wage figure used. It is not possible to say which of these
factors is more important.
27. The following table combines all the estimates
for 2002 and compares them to the 1998 figure. Overall this paper
estimates that the cost of obesity in England was £3.3-3.7 billion
in 2002. This is 27-42% above the figure given in Tackling
Obesity in England; the midpoint is similar to its projection
for 2010. It has been mentioned a number of times that a significant
part of this increase is due to the inclusion of new co-morbidities
in this analysis. An estimated £390-435 million of the
increase was due to this. The remaining increase was due to a
combination of increased drug costs, take-up and availability,
improved data, higher NHS costs and higher earnings (in the economy
as a whole) as well as an increase in the number of people who
are obese. As has been indicated earlier, this total figure should
still be seen as an underestimate.
28. While this figure seems very large what does
it really mean? Is it really that large? Some estimates for individual
diseases are much higher. It is thought that diabetes and its
co morbidities consumes 9-10% of total NHS resources. The total
(direct and indirect) costs of coronary heart disease and back
pain have recently been estimated at £7.1 billion and
£6.8 billion respectively.
Applying the method used in this paper the total cost of sickness
absence due to depression is over £9 billion. The cost
of smoking to the NHS in England was estimated at £1.4-1.7 billion
in the mid-1990s, 4.3-5.3% of net spending.
In this context the cost of obesity looks somewhat less significant.
However, it is important to consider the rapid increase in obesity
over the past two decades and the possibility that this might
continue. The estimates of premature mortality due to obesity
are significant in any context.
29. This note only looks at future costs in a very
general way. It is clear that, disregarding the additional co-morbidities,
that changes in costs are not necessarily equal to changes in
the prevalence of obesity. This is true even after general NHS
inflation is accounted for. Other factors like new drugs, treatments
and guidelines can radically increase costs. It is impossible
to predict how these might alter the situation over the next decade.
In addition to this there are further complicating factors. There
is clearly a time lag between the onset of obesity and increases
in related chronic diseases.
This suggests that further increases in health problems and economic
costs are already 'locked in' and will increase. Similarly obesity
can lead to diseases/conditions which are permanentlike
gout and diabeteswhile losing weight may help with their
management health and cost implications remain. The rise in childhood
obesity is likely to further multiply such effects as their exposure
to risk is increased over a longer period.
Research and data
30. Data on relative risks of the associated diseases
are largely international. This increases the uncertainty in cost
estimates, especially when they are so reliant on the consequences
of obesity. More research using data from the UK would improve
the accuracy and credibility of such estimates. The methodology
used for estimating costs is the best possible considering the
available data, but it is not ideal. A number of simplifying assumptions
have had to be made and methodologies vary for different types
of costs. There is a severe lack of recent Department of Health/NHS
estimates of the total costs of individual diseases/conditions.
Some official estimates of the costs of the most important/expensive
diseases and conditions would improve the public debate in this
area and allow the burdens of a wide range to be put into a meaningful
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