Abstract
Obesity is considered to be one of the most important public health problems facing the global community today and it is a recognized risk factor to other more serious diseases like diabetes cancers and heart disease (Rigby, Leach, Lobstein, Huxley and Kumanyika, 2009). The diagnosis and treatment of obesity have caused a major impact on the federal healthcare and social resources. Health in general is viewed as a commodity, a need that every state should be able to address and to provide adequate resources in order to maintain a high standard of healthcare services to become available in the global community. The demand for quality healthcare services may be likened to the demands for goods and services. The federal state and local governmental approach is directly focused on preventive measures and health promotion in order to reduce the morbidity rate of obesity. This essay has the objective of providing insights regarding the impact of obesity on federal and state resources in view of the supply and demand economic theory and how it could burden the state funds for medicare expenditures. This author will also provide some insights and recommendations on how to help reduce the impact of obesity in terms of costs in my state of residence.
Obesity is a serious health concern that statistically rise by 34% in occurrence since the 1960’s and the morbidity attributable to obesity increases by sixfold, according to Ungar (2012). Its impact on causing burden to the federal healthcare funds is significant as obese individuals tend to live longer as long as they are able to control their weight effectively. Thus, this could impose a long term demand for allocating healthcare resources involving medicare expenditures in the diagnosis and treatment of the condition.
In the economic view based of the supply and demand theory, the costs for diagnosis and treatment of obesity related cases can result to an excess demand or shortage on the sufficient fund allocation available on medicare and financial health aid by state whereby the quantity demanded exceeds the quantity supplied (Heshmat, 2011), resulting to the burden of medicare costs involved in the treatment of obesity-related diseases such as heart disease, cancer and diabetes. In the economic point of view, the demand for healthcare services increases relative to the sharing of the price of healthcare costs. The supply and demand theory provides the principle that when the two parameters, supply and demand are in balance, it results in an equilibrium state between the costs and the quantity in the health care system. It may be pointed out that about 80% of health insurance is paid by third parties which include governmental subsidies for Medicare and Medicaid and private insurance companies and each individual pay their own minimal share of about 20% for healthcare services. Thus, the price balance of healthcare costs mainly depends upon the co-payment rate of individuals and the federal state contribution for healthcare costs (Tucker, 2011).
Based on the interpretation of the Estimated Adult Obesity-Attributable Percentages and Expenditures by State, the expenditures for medicare and medicaid is partly driven by the size of the state population. About half of the annual medicare insurance costs are shouldered by the taxpayers through the government healthcare programs like the medicare and medicaid services (CDC, 2004). This cause a significant impact in terms of the economy of each state. An additional burden on this respect involves the behavioral responses of medicare eligible population on food consumption and unhealthy lifestyle that contribute to the risk factors for obesity related diseases that could impact a long term costs for medicare and medicaid services.
As a health care economist, it would be more rational to use the statistics available as provided for in the Estimated Adult Obesity-Attributable Percentages and Expenditures by State which offers a valuable state level estimate when defining healthcare policies to address the demands for medicare expenditures for obesity treatment, including the obesity-related diseases. Food changes system should likewise be implemented within the state such as regulating food prices, labeling requirement, nutritional campaigns and health education programs that would help influence the behavioral aspects of the public that could reduce the risks factors, mortality and morbidity rate of obesity. By helping changing the behavioral response of people towards unhealthy lifestyle and eating preferences could help reduce the costs on the demand for federal subsidy for medicare and medicaid that will help improve the economic stability of the state in terms of its healthcare costs and allocation in meeting the demand and supply for healthcare services.
References
CDC (2004). Obesity Costs States Billions in Medical Expenses. Retrieved from
http://www.cdc.gov/media/pressrel/r040121.htm
Heshmat, S. (2011). Eating Behavior and Obesity: Behavioral Economics Strategies for Health. New York, NY: Springer Publishing.
Rigby, N. Leach, R., Lobstein, T., Huxley, R. and Kumanyika, S. (2009). Obesity. Science to Practice. Oxford, UK: John Wiley & Sons.
Tucker, I.B. (2011). Survey of Economics. Ohio, USA: Cengage Learning.
Ungar, R. (2012). Obesity Now Costs Americans More in Healthcare Spending Than Smoking. Forbes. Retrieved from http://www.forbes.com/sites/rickungar/2012/04/30/obesity-now-costs-americans-more-in-healthcare-costs-than-smoking/.
