Saturday, September 11, 2010

CBO and Obesity

The CBO recently released a report on the impact of obesity on the health care plan. They state:

Over the past two decades, the adult population in the United States has, on average, become much heavier. From 1987 to 2007, the fraction of adults who were overweight or obese increased from 44 percent to 63 percent; almost two-thirds of the adult population now falls into one of those categories. The share of obese adults rose particularly rapidly, more than doubling from 13 percent to 28 percent. That sharp increase in the fraction of adults who are overweight or obese poses an important public health challenge. Those adults are more likely to develop serious illnesses, including coronary heart disease, diabetes, and hypertension. As a result, that trend also affects spending on health care.

They conclude:

CBO’s assumptions and findings for the scenarios are as follows:
  • First, CBO assumed that there will be no future changes in the distribution of adults by body weight, and the prevalence of obesity will remain at the 2007 rate of 28 percent. If so, per capita spending on health care for adults would rise by 65 percent—from $4,550 in 2007 to $7,500 in 2020—largely as a result of rapidly increasing health care spending for all adults regardless of weight. (All dollar figures are in 2009 dollars.)
  • Alternatively, CBO assumed a rising prevalence of obesity, matching recent trends. In that scenario, the prevalence of obesity would rise to 37 percent by 2020, and per capita spending would increase to $7,760—about 3 percent higher than spending in the first scenario.
This is a totally fact-less report. They made assumptions without any basis and then draw conclusions which are meaningless. We have prepared a report and short book on the topic and detailed the results in extensive detail. The data is there and the CB failed to address it in any manner.

One then questions the competence and credibility on all other reports!

Yet as an additional comment, having spent a few days on holiday in Maine I was amazed by the massive amount of obesity and morbid obesity in the citizenry on the country. Young children walk around with BMIs of well in excess of 35 and adults well above 40. The advantage of cancer is that often the patient just dies, even if they survive it is but one disease. Obesity leads to Type 2 Diabetes and a multitude of other diseases. We can treat all of them but the costs just explode.

If we want to bend the cost curve as Krugman has recently suggested we will be doing, we must get rid of the fattys or get them to pay their fair share. As Krugman states:

So yes, there’s a bump when 35 million people who would otherwise have been uninsured get coverage; but growth is slower after that, which will mean big savings in the long run. It really doesn’t matter at all whether your estimate says that overall health spending will be slightly higher or slightly lower in 2019 as a result of the law; aside from the fact that covering all those people with at most a minimal rise in costs is itself a policy triumph, it’s spending in the decades that follow that matters for cost.

And let’s be clear: you could not have gotten the cost savings without the move to near-universal coverage, for both political and technical reasons. This thing really is a package — a package that, with all its flaws, both makes our society more decent and improves our long-run budget outlook.

But, the good Professor fails to understand that these added people are for the most part those very obese and morbidly obese people we have been avoiding. They not only now get a free ride both their long terms costs will explode. This is the problem with the Krugmans of the world, the fail to look at the details, the facts that underlie the costs.