Project:
The Economic Burden of Obesity on Rural Communities: A Case Study of Kentucky Homeplace Counties

Year: 2004

Investigator: Scorsone, Eric, and Janet Tietyen

Institution: Michigan State University

Project Contact:
Eric Scorsone
Department of Agricultural Economics
Michigan State University
88 Agriculture Hall
East Lansing, MI 48824
Phone: 517-353-9460
E-mail: scorsone@msu.edu

The increasing prevalence of obesity and the health-related costs of obesity are of concern to healthcare providers, professionals and communities at large. Two out of every three adults in America are considered overweight or obese, compared to less than one in every four persons four decades ago. The economic burden of overweight and obesity is rising in the United States. The costs associated with overweight and obesity account for $117 billion, over 9 percent of total U.S. medical costs, with $61 billion in direct costs, and $56 billion in indirect costs.

This economic burden is greater among residents of the South and rural areas. Dietary quality and quantity, low levels of physical activity, the physical environment, and certain policies adopted by public and private institutions work in concert to create an environment where most people find it difficult to maintain a healthy body weight. Overweight and obesity have been linked to unhealthy diets and physical inactivity. Kentucky ranks 39th in meeting the healthy dietary consumption, and second highest in physical inactivity in the nation.

The objective of this study was to estimate the county-level economic burden of obesity in the rural South. Specifically, 59 counties in Kentucky were selected. County selection was based on the availability of data via a Medicaid-financed program known as Kentucky Homeplace. Homeplace data served as the basis for the economic burden of obesity estimates at the county level. A second objective was to develop a methodology that could be applied to limited data sets to estimate the economic burden of obesity at the county or community level. To date, the literature on the economic burden of obesity has focused on estimating National and State-level expenditures. However, this same information may be useful to local decision makers as they too face resource allocation decisions related to preventing or reducing obesity at the community level. This research is the first known effort to estimate the economic burden of obesity at the county level.

In estimating the economic burden of obesity at the county level, it is important to focus on the out-of-pocket expenditure category. As medical costs are shifted to these patients, Medicare, Medicaid, and private insurance obesity-related expenditures are shifted to taxpayers and to insurance companies mostly located outside of rural communities. The burden of out-of-pocket expenditures thus falls on the households located in the study counties. The results indicate that the economic burden of obesity is significantly higher for obese individuals compared to normal weight individuals. This finding is of particular interest to Medicare and uninsured individuals.

These findings may not be generalizable to the population, as the sample has an over-representation of older, female population compared to the population at large. However, this limitation does not affect the general process used to estimate the county-level economic burden of obesity; it does point to the need to check sample statistics.

This study found the out-of-pocket economic burden of obesity for the 59 Kentucky counties was nearly $38 million. This burden is distributed in differing degrees within counties based on their sociodemographic characteristics and levels of obesity, and is not solely a function of population size. This economic burden on individuals could present an opportunity for a county willing to invest in obesity prevention or reduction measures.