House of Commons - Health

Select Committee on Health Third Report

Annex 1: The economic costs of obesity: A note prepared by the Scrutiny Unit, Clerk's Department, House of Commons

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.

NAO report

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:[390]

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%.[391]

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).[392] 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.

Direct costs

Treating obesity

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 diagnosis/procedure groups.

8. GP consultations —The unit cost figure for GP consultations used here is from the same source as the NAO figure,[393] 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.[394] Assuming that the number of consultations has increased in line with the prevalence of obesity[395] 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 admissions—Using data on admissions for 2002-03[396] and the latest cost figures[397] gives an estimate of around £2 million. The actual number of admissions for obesity fell by almost 25% between 1998 and 2002.

10. Day cases—The 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 attendances—The 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. Prescriptions—The 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.[398] 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.[399] 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.

400] lower back pain (among women only),[401] hyperlipidaemia[402] and sleep apnoea.[403] 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 exercise—hyperlipidaemia. 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 statins—the 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.[404]

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.[405] 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.

Indirect costs

Mortality

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[406] 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 obesity.[407] Applying these rates to deaths in England in 2001 gives a total of 52,500.[408]

Morbidity

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 billion—used 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.

Conclusion

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.[409] 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.[410] 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.

The future

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.[411] 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 permanent—like gout and diabetes—while 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 context.

390 NAO, Tackling Obesity in England (2001), para. 2.27; see also appendix 6 paras 17-18, 22, 25, 28 and 33-34 Back

391 Obesity in Europe The Case for Action, International Obesity Taskforce Back

392 Wolf AM, Colditz GA. "Current estimates of the economic cost of obesity in the United States", Obesity Research 1998 Mar; 6(2):97-106; The Surgeon General's Call to Action to Prevent and Decrease Overweight and Obesity, Office of the Surgeon General Back

393 Unit costs of health and social care 2003, PSSRU, University of Kent at Canterbury Back

394 Morbidity Statistics from General Practice, fourth national study 1991-1992, MB5 no.3, RCGP/OPCS Back

395 Health Survey for England, 2002, DH (Department of Health) Back

396 Hospital Episode Statistics 2002-03, DH Back

397 NHS Reference Costs 2002, DH Back

398 Prescription Cost Analysis 2002, DH Back

399 This list is based on diseases associated with obesity in: Annual Report of the Chief Medical Officer 2002, Department of Health, American Obesity Association, Clinical Guidelines on the Identification, Evaluation and Treatment of Overweight and Obesity in Adults -The Evidence Report, National Institute of Health. Back

400 van den Brandt PA et al, "Pooled analysis of prospective cohort studies on height, weight and breast cancer risk", Am J Epidemiol. 2000 Sep 15; 152(6):514-27 Back

401 Lake JK et al, "Back pain and obesity in the 1958 British birth cohort. Cause or effect?" J Clin Epimemiol, 2000 Mar 1;53(3):245-50 Back