The financial burden of overweight elderly Americans

How do we measure the financial burden of elderly obesity? At first this seems like an easy question to answer. Find the average medical spending of the obese elderly and compare that to the spending of an elderly individual of healthy weight.

Yet causation is difficult to show.

True, it is possible that the obese may be more likely to get sick and thus incur higher costs, but it is also possible that sick people can gain weight–since it is difficult to exercise when sick–which can cause more obesity. Thus, the original sickness and not the obesity may be the true cause of the additional medical expenses.

A 2007 Health Services Research paper by Yang and Hall try to examine this question. They use panel data from the Medicare Current Beneficiary Survey (MCBS). The authors use a maximum likelihood estimation strategy, modeling current BMI as a function of last year’s BMI and Acute Medical Events. Acute Medical Events are also a function of BMI in a separate estimating equation. Health care expenditure is a function of BMI, BMI-squared, functional status, chronic and acute disease and demographics.

To identify this system of questions, the authors uses the following exogenous variables: average food prices, density of fast food restaurants and air quality. Using these instruments, the authors find that “elderly men who were overweight or obese at age 65 had 6–13 percent more lifetime health care expenditures than the same age cohort within normal weight range at age 65. Elderly women who were overweight or obese at age 65 spent 11–17 percent more than those in a normal weight range.”