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Fat Aussies

Access Economics’ estimate of the cost of obesity in Australia at $21 billion (about double the annual cost of Medicare) deserves careful scutiny but the final report has not yet been released.

From snippets in the press concerning the report:

Obesity now afflicts 3.2 million Australians but might more than double to 7.2 million within 20 years with current trends. Most obese people are aged 55-59 with 159,000 men and 203,000 women affected.

The main chronic diseases associated with obesity are (as expected) Type 2 diabetes, heart disease, stroke, osteoarthritis and cancer. Obese people have a 3X higher chance of suffering Type 2 diabetes and a 2X chance of getting cardiovascular conditions including heart disease, high blood pressure and stroke. Their risk of cancers including colorectal, breast, uterine and kidney cancer rises by 1.75X and by nearly 2.5X for osteoarthritis. More than 700,000 Australians suffer these diseases directly as a result of obesity.

The heaviest losses. about $17.2 billion, result from this burden of disease. These represent the non-financial costs of disability, loss of wellbeing and premature death caused by obesity. (These computations are based on a value of life of $162,561 a year and for a whole of life $3.7 million – these figures seem high given that obesity is concentrated among low income earners). Cardiovascular disease generated the highest costs of any disease group, $12.6 billion, followed by cancers, $3.9 billion and diabetes $2.3 billion.

The next biggest loss is in productivity, estimated at $1.7 billion a year, flowing from the fall in output caused by reduced employment and premature death.

Direct health costs are a relatively minor cost. Obesity generates $873 million in health spending and $804 million in carer costs.

This relatively small direct health cost versus the estimated massive indirect costs cause concern. Of course I need to read the final report. I welcome reader comments on this.

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