August 2008

The growing cost of obesity in 2008: three years on

Diabetes Australia is the national peak body for diabetes in Australia providing a single, powerful, collective voice for people living with diabetes, their families and carers. Diabetes Australia works in partnership with diabetes health professionals and educators, researchers and health care providers to minimise the impact of diabetes on the Australian community.

Diabetes Australia is committed to turning diabetes around by focusing efforts around the following five strategic areas: awareness, prevention, detection, management and a cure.

The current obesity epidemic facing Australia is having a direct and catastrophic influence on increasing the incidence of type 2 diabetes.

Prevention of type 2 diabetes through tackling the obesity epidemic is the key to turning diabetes around.

The fight against obesity requires a new approach that considers the economic and social conditions under which people live and how this may be impacting on their health.

Diabetes Australia understands that obesity is a complex social issue, not just a health sector issue. A number of environmental, social, economic, political and other factors have contributed to an ‘obesogenic’ environment. Collaboration and action within government and between government and the rest of civil society is the key to turning this around.

For more information on Diabetes Australia or to download a copy of this report go to diabetesaustralia.com.au

2.1 2005 prevalence estimates .................................................................................................. 2

2.2 New data on obesity prevalence in Australia ....................................................................... 2

2.2.1 BEACH 2006-07 ........................................................................................................2

2.2.2 National Blood Pressure Screening Day (NBPSD) ...................................................5

2.3 Updated prevalence projections .......................................................................................... 6

2.3.1 Baseline projections ...................................................................................................6

2.3.2 Growth projections .....................................................................................................9

3.1 2005 estimates ................................................................................................................... 10

3.2 Updated estimates .............................................................................................................10

3.2.1 Updated attributable fractions ..................................................................................10

3.2.2 Updated prevalence estimates ................................................................................11

4.1 2005 estimates ................................................................................................................... 13

4.2 Updating the economic costs of obesity ............................................................................ 15

4.2.1 Health expenditures .................................................................................................15

4.2.2 Other (non-health) financial costs ............................................................................15

4.2.3 Burden of disease ....................................................................................................15

4.2.4 Population growth ....................................................................................................16

4.3 Diabetes ............................................................................................................................. 16

4.3.1 Economic costs of diabetes in 2008 ........................................................................16

4.3.2 Economic costs of diabetes as a result of obesity ...................................................16

4.4 CVD .................................................................................................................................. 17

4.4.1 Economic costs of CVD in 2008 ..............................................................................17

4.4.2 Economic costs of CVD as a result of obesity .........................................................17

4.5 Osteoarthritis ...................................................................................................................... 18

4.5.1 Economic costs of osteoarthritis in 2008 .................................................................18

4.5.2 Economic costs of osteoarthritis as a result of obesity ............................................18

4.6 Cancer ............................................................................................................................... 19

4.6.1 Economic costs of cancer in 2008 ...........................................................................19

4.6.2 Economic costs of cancer as a result of obesity .....................................................19

4.7 Cost summary .................................................................................................................... 20

Figure 2-1: Trends in obesity prevalence for adults, 1980 to 2007, based on measured and self-reported BMI 4

Figure 2-3: Prevalence of obesity by age and gender, 2008 8

Figure 2-4: Prevalence projections, 2008 to 2028 – baseline scenario 8

Figure 2-5: Prevalence projections, 2008 to 2028 – high scenario 9

Figure 5-1: Population share by state/territory, 2008 23

Table 2-1: Prevalence of obesity by age and gender, 2005 2

Table 2-2: Prevalence of obesity by age and gender, BEACH, 2006-07 3

Table 2-3: Prevalence of obesity from NBPSD, %, people, and 95% confidence Interval 6

Table 2-4: Prevalence of obesity for adults by age and gender, 2008 7

Table 2-5: Prevalence of obesity by age and gender, 2008 7

Table 2-6: Annual increase in obesity prevalence rates 9

Table 3-1: Deaths and burden (DALYs) attributable to high body mass by specific cause, Australia, 2003 11

Table 4-1: Cost summary, obesity ($m), 2005 14

Table 4-2: Economic costs of diabetes ($m), 2005 and 2008 16

Table 4-3: Economic costs of diabetes as a result of obesity ($m), 2008 17

Table 4-4: Economic costs of CVD ($m), 2005 and 2008 17

Table 4-5: Economic costs of CVD as a result of obesity ($m), 2008 18

Table 4-6: Economic costs of osteoarthritis ($m), 2005 and 2008 18

Table 4-7: Economic costs of osteoarthritis as a result of obesity ($m), 2008 19

Table 4-8: Economic costs of cancer ($m), 2005 and 2008 19

Table 4-9: Economic costs of cancer as a result of obesity ($m), 2008 20

Table 4-10: Cost summary, obesity ($m), 2008 21

Table 4-11: Summary of changes to prevalence and cost of obesity: 2005 to 2008 22

Prevalence rates in Access Economics (2006) were based on Australian measured anthropomorphic data from AusDiab (2000), the National Nutrition Study (1995) and the NSW Schools Physical Activity and Nutrition Survey (SPANS, 2004) study for children. Based on those definitions and data, 3.24 million Australians (15.9%) were estimated to be obese in 2005.

Given the potential for selection bias in the NBPSD ‘Fat Bomb’ study by Stewart et al (2008), Access Economics has rejected the use of these data for estimating obesity prevalence.

However, the BEACH data for adults aligns closely with historical data on measured body mass index (BMI), including that from AusDiab and shows prevalence of obesity continuing to increase for adults up to 2007 (see chart below).

Obesity rates for children aged 2-17 from BEACH are in the 10%-12% range and stable, different from the (lower, earlier and increasing) SPANS prevalence used previously. Combining estimates for children and adults gives the prevalence estimates for 2008 shown in the table below, and used in the costing.

1. The 55-59 year age group contained the largest number of obese people for both men (183,200) and women (231,600).
2. Over 290,000 young Australians (aged 5-19 years) are obese.
3. The total estimate is 14.5% higher than the 2005 estimates.

Since the Access Economics (2006) report, the Australian Institute of Health and Welfare (AIHW) has revised its methods of estimation of AFs for obesity and overweight. Adjusting the AFs from Access Economics (2006) to better match the results from Begg et al (2007) results in new AFs in this report which show that obesity causes:

1. 23.8% of Type 2 diabetes (compared to the former 10.8% estimate);
2. 21.3% of CVD (compared to 14% of hypertension, 12% of coronary heart disease and 12% of stroke, previously);
3. 24.5% of osteoarthritis (compared to 14% previously); and
4. 20.5% of colorectal, breast, uterine and kidney cancer (compared to 13% of colorectal and kidney cancers, and 16% of breast and uterine cancers).

Applying the new AFs to the updated prevalence of each disease in 2008, noting the change in methodology and population growth:

1. 242,033 Australians had Type 2 diabetes as a result of being obese, up from 102,204 Australians in 2005 – a 137% increase;

This led to a total of 197,729 DALYs associated with obesity, up from 114,633 in 2005 – a 42% increase.

Unit costs were updated to 2008 by inflating:

1. direct health costs per case by AIHW health inflation of 3.1% per annum over 2005-2008;
2. productivity losses and carer costs per case by 12.10%, based on the ABS Wage Price Index;
3. other financial costs per case by 10.6%, based on the RBA’s Consumer Price Index;
4. the Value of a Statistical Life Year to 2008 values based on literature review and meta-analysis to parameters recommended in Access Economics (2008).

Using the new obesity prevalence estimates, AFs and unit cost data, the financial cost of obesity in 2008 was estimated as $8.283 billion.

1. Of this, productivity costs were estimated as $3.6 billion (44%), health system costs were $2.0 billion (24%) and carer costs were $1.9 billion (23%).
2. DWLs from transfers (taxation revenue forgone, welfare and other government payments) were $727 million (9%) and other indirect costs were $76 million (1%).

The net cost of lost wellbeing (the dollar value of the burden of disease, netting out financial costs borne by individuals) was valued at a further $49.9 billion, bringing the total cost of obesity in 2008 to $58.2 billion.

1. Of the financial costs, 29.4% are borne by individuals, 19.2% by family and friends, 34.3% by Federal Government ($2.8 billion per annum), 5.1% by State Governments, less than 0.1% by employers and 11.8% by the rest of society. However, if the cost of lost wellbeing is included, the individual’s share rises markedly to 90.0% of the total.

In 2005, the economic costs were significantly lower at $21.0 billion, including $3.8 billion in financial costs and $17.2 billion in net cost of lost wellbeing. The increase of economic costs is due to a combination of factors such as cost inflation, population growth and change in methodology in relation to VSLYs and AFs. For instance, when the old VSLY is applied, the net cost of lost wellbeing (in 2008 dollars) would have been $32.7 billion (compared with $49.9 billion based on the new VSLY), with total economic costs of obesity amounting to $41.0 billion.