GlobalData Report Highlights Staggering Economic Costs for California of $89.5 Billion Due to Obesity
NEW YORK–(BUSINESS WIRE)–Obesity and overweight are estimated to have caused a staggering $89.5 billion reduction in California economy in 2022, equivalent to 2.5% of the state’s gross domestic product, according to a report released by GlobalData Plc, a leading data and analytics company.
GlobalData’s report, ‘Obesity’s Impact on California’s Economy and Labor Force,’ analyzes the economic and workforce implications of obesity in the State of California, as well as the impact on state tax revenue collections and costs. Obesity is a serious, progressive disease and is associated with a range of other diseases, including type 2 diabetes, cardiovascular diseases, and musculoskeletal disorders. In California, over a quarter of adults are classified as having obesity (28.1%), and a third have overweight (34.7%) in 2022. This disease not only contributes to an increase in healthcare spending and premature death but also has a detrimental effect on labor force participation and productivity.
Estimates of the economic impact of obesity on California include: 353,600 fewer adults in the workforce due to obesity-related unemployment and premature death, $6.3 billion higher costs to employers for health-related absenteeism and disability, and 9% lower earnings for women with obesity compared to women with a healthy weight.
Employers in California paid an extra $6.0 billion in higher medical expenditures for health complications attributed to obesity and overweight. Households with private insurance incurred $3.5 billion in higher costs. Medicaid costs to the state were higher by $2.7 billion (equivalent to 6.7% of the state’s Medicaid spending). The federal government also spent an estimated $12.3 billion more on Medicare and Medicaid for California residents.
Obesity and overweight have a detrimental impact on the state’s budget, estimated at $10.5 billion in 2022 which is equivalent to 3.7% of fiscal year revenues. State tax revenues were lower by $6.5 billion due to reduced economic activity, while state costs for Medicaid, public assistance, and state government health insurance increased by $4.0 billion.
The report also notes that achieving and maintaining weight loss of 5% to 25% among the California non-Medicare adult population with obesity could produce substantial medical savings, ranging from $30.8 billion to $77.9 billion over the next 10 years.
“We must confront the deeply troubling fiscal and human costs of obesity in California. That means treating this medical condition as we do other serious health matters,” said Senator Steven Bradford (D-Gardena), Vice Chair of the California Legislative Black Caucus. “Covering prescription treatments that have been proven to be effective will not only save billions of dollars we spend treating obesity but will save lives and improve the quality of life for many.”
Liz Helms, President & CEO of The California Chronic Care Coalition, reinforced this message: “Obesity isn’t just a number on a scale; it is a complex, chronic disease with far-reaching consequences. Californians living with obesity are at an increased risk of developing additional or worsening health issues. Complications from the disease can also impact their lives in other areas including finances, work productivity, and quality of life. This study demonstrates the unmet need in California and underscores the urgency for policymakers, employers, and payers to act immediately.”
Considering the analysis, GlobalData has recommended actionable steps for state policymakers and employers:
State policymakers can (1) advocate for state employee health insurance to cover comprehensive, evidence-based obesity treatments, including intensive behavioral counseling, nutrition support, pharmacotherapy, and metabolic/bariatric surgery; (2) expand Medicaid coverage for obesity treatment; and (3) invest in community-based programs and education campaigns.
Employers can (1) offer insurance coverage and wellness programs for obesity care at parity with other chronic diseases; (2) foster a culture of support and inclusion that recognizes and accommodates the needs of employees with obesity; and (3) provide education and resources to employees to educate them about the health risks associated with obesity as well as strategies for obesity care and weight management.
GlobalData’s report serves as a wakeup call to address the obesity crisis head-on, with the potential to alleviate the economic burden on California and foster a healthier and more prosperous future for its residents and employers.
The study was supported by Eli Lilly and Company.
ENDS
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Notes to Editors
- Quotes provided Senator Steven Bradford (D-Gardena), Vice Chair of the California Legislative Black Caucus and Liz Helms, President & CEO of The California Chronic Care Coalition.
- Access the report and infographic.
- When incorporating images or videos into news articles, we kindly request that media outlets exercise sensitivity in their portrayal of individuals with obesity. The Obesity Action Coalition’s Stop Obesity Weight Bias Campaign includes media guidelines and bias-free image gallery.
About GlobalData
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