(The Center Square) California lost out on $90 billion in economic activity due to overweight and obese Californians in 2022, resulting in an $11 billion financial drain on the state budget from higher healthcare spending and lost revenue, a new report found. The report also determined Californian’s excessive weight cost the federal government an additional $12 billion in federal Medicare and Medicaid spending in California.
According to the self-reported California Health Interview Survey, approximately 28.1% of California adults were obese, and an additional 34.7% were overweight in 2022.
The Global Data Report assessed a wide variety of markers, including the impact of reduced economic activity, higher healthcare costs, premature deaths, and obesity-related unemployment. The report identified Californians’ excessive weight as causing a 2.5% loss in gross domestic product, 3.7% loss in state revenue, 353,600 fewer adults in the workforce, and a 9% reduction in wages for women with obesity with no reduction for obese men.
“There’s a lot of misinformation out there about obesity and the treatment of obesity as a cost. What our study shows is there’s a cost to doing nothing,” said Tim Dall, Executive Director of Life Sciences Consulting at Global Data, to The Center Square. “Other studies may have looked at what is the cost of obesity relative to GDP, we’re looking at what the GDP could have been in that world without obesity.”
Where multiple data points were available for cost estimates, the study used the lowest applicable figures, suggesting actual costs could be much higher. A study from the Milken Institute found direct health costs for weight were $481 billion in 2016 and created an additional $1.24 trillion in indirect costs due to lost economic productivity, resulting in a combined $1.72 trillion in losses. This equates to approximately 9.3% of that year’s national gross domestic product, or in the same neighborhood as the nation’s peak Cold War military spending, or nearly half of the year’s taxes.
Global Data’s report noted that an obese person losing 5% of their weight produces $6,080 in medical savings over 10 years; 10% saves $10,087; 15% saves $12,583; 20% saves $14,488; and 25% saves $15,396.
The study, funded by pharmaceutical company Eli Lilly — maker of weight loss drug Tirzepatide — says lifestyle modification programs, namely through nutrition and exercise, produce an average 8% loss in body weight. The study says that medical treatments such as weight loss drugs or surgery — strictly in conjunction with lifestyle modification programs — produce necessary weight loss for those who don’t lose enough weight naturally. Weight loss drugs are associated with an up to 20% loss in average weight, while metabolic or bariatric surgery is associated with weight loss of 25% or more.
California State Senator Steven Branford, D-Gardena, authored SB 839 in the current legislative cycle, which would have required insurers, including the state healthcare system, to pay for weight loss drugs and surgeries as they would other drugs and procedures for other conditions. Bradford has received $4,950 from Eli Lilly, in contributions over a decade ago spread across the 2010 and 2012 election cycles.
However, given that Tirzepatide, better known as Mounjaro, retails for just over $1,000 per month, this measure could have come with significant costs for the government and insurers. Monjouro is technically approved as a diabetes treatment drug, meaning off-label weight loss use is often not covered by insurance unless an individual has diabetes, which is common in obese individuals. Eli Lilly offers discount cards for individuals whose insurance does not cover off-label use of $573 per month, bringing out-of-pocket costs to $500.
Because individuals tend to regain most of their weight back once quitting weight loss drugs — a 2023 study found users lost 20% of their weight through Mounjaro and lifestyle modification, but gained back 14% after being put on a placebo, suggesting individuals need to stay on weight loss drugs indefinitely to keep off their lost weight.
Assuming California’s 2021 population of 8.4 million obese adults require $6,000 per year of Monjouro to keep their weight off, California would spend $50.4 billion per year on their weight management; adding the state’s 10 million overweight adults would cost an additional $60 billion per year. These figures are approximately even with the study’s $113 billion estimated annual cost of excessive weight in California, and how much the state spends on education each year.
Dall says Bradford’s bill was pulled due to the state’s budget challenges this year, but that new legislation could soon be on the way. Until then, diet and exercise will be many patients’ most affordable way to losing and keeping off the extra pounds.
