Obesity Final Paper

Running head: IMPACT OF OBESITY ON AMERICA 1
Impact of Obesity on America
Irina Bubnova, Irma Isarraras, Stephanie Knippa
HCA 306A Health Care Economics
Professor Tokonitz
Warner Pacific College
June 7, 2015

IMPACT OF OBESITY ON AMERICA 2
Abstract
Obesity in America has reached an epidemic level with health care costs escalating as a direct
result of overeating. It is estimated that in 2008 the annual medical cost of obesity was $147
billion (Centers for Disease Control and Prevention, 2014), and that is without calculating the
various indirect costs that are also burdening the social infrastructure. Multiple factors such as
advancements in technology, the food industry, advertisement, inexpensive energy-dense foods,
and poverty have all intertwined to form the perfect environment for this disease to take hold and
spread. The federal government and some public organizations have taken on the cause to
promote healthier food choices and a better lifestyle with multiples programs aimed at children
as well as adults. The desired results have yet to be realized and the rate of obesity has only been
increasing along with healthcare spending. Policy makers need to consider more drastic changes
such as subsidizing healthy food instead of corn and soy, the taxation of harmful energy-dense
foods, stringent regulations of the food allowed in schools, and standard insurance coverage with
a specialized treatment plan specifically for the obese. Without aggressive action the obesity rate
will continue to climb and economic losses will be great.

Impact of Obesity on America
Obesity in the United States was first publicly recognized as a problem in the late 1970’s
when 15 percent of adults had a body mass index (BMI) of greater than 30. Almost 5 decades
later, the percentage of obese adults has doubled to over 30 percent with more than one-third of
the adult population clinically obese, and more than two-thirds of the adult population
overweight (Henderson, 2015). According to Goel (2006), “this problem has increased to an
extent that it is being labeled an epidemic and a leading cause of preventable deaths, second only
to smoking” (p. 317). Obesity is a major health concern not only because it is costly, but also
because it greatly reduces quality of life for the individual. Obesity carries with it many
comorbidities, and has been directly linked to multiple chronic conditions, such as type 2
diabetes, heart disease, high blood pressure, high cholesterol, and several specific cancers
(Hojjat, 2015). If allowed to go on unchecked, obesity could pose problems of a magnitude not
yet seen with any other disease to date. Wisdom would dictate that all necessary solutions
should be explored and implemented in a timely manner to stem the growth of obesity and the
resulting increase in healthcare spending and loss of productivity.
The principles of economics function primarily with the understanding that people make
rational decisions that would maximize utility (Henderson, 2015). In other words, people make
free choices that would most benefit them depending on the circumstances in which they live and
the limits of their resources. People have to manage their limited resources with trade-offs to
reach the best possible outcome and generally this means that people behave in predictable
patterns. Unfortunately when it comes to obesity, people do not act in a rational manner. The
choice to consume more calories does not result in more utility and the relative costs and benefits
of being obese are ignored. In fact, the economics of obesity function much more like that of

addictive goods such as cigarettes and illegal drugs. Why else would an individual decide to
consume the extra calories knowing the cost such an action could incur?
Perhaps another explanation for the human behavior seen in obesity is not addiction but
rather the lack of information. In a perfect free market, everyone would have access to complete
information and would then base their decisions on that knowledge. It can be argued that many
people underestimate the consequences of becoming overweight and do not understand the
gravity of the risks involved. Mann (2008) says, “obesity is not a utility-maximizing decision
any more, but a results of individual miscalculations” (p. 168). Whatever the explanation may
be, it is hard to choose any one culprit, as this problem appears to be very complex with
numerous factors involved. Most research seems to point to technological advancements,
decreasing food prices, the food industry, advertising, and poverty as the big influences in the
obesity epidemic.
The twentieth century brought many changes to the level of technology utilized by
society at large and each individual personally. Changes in technology have affected all parts of
life, including labor, transportation, telecommunications, and even entertainment (Goel, 2006).
While in the past many jobs required strenuous labor, with high-tech advancements people began
operating machines that required a minimum of standing or sitting. Development of low cost
transportation made walking unappealing and telecommunications now only require individuals
to push a few buttons as opposed to delivering a message in person or going to the post office.
Televisions and computers provide hours of sedentary entertainment at home and leave no room
for exercise. This drastic change in lifestyle as a result of technological changes has greatly
predisposed people to obesity and is an important factor to acknowledge in the search for
solutions (Goel, 2006).

Another significant cause of obesity is the decreasing price of processed food due to
agricultural subsidies as well as advancements in technology. According to Hojjat (2015), “The
government has poured billions of dollars into dietary campaigns. Agricultural subsidies
undercut those efforts by skewing the market in favor of unhealthful calories” (p. 86). The
subsidies basically drive down the cost of commodities such as corn resulting in cheap corn-
based products and corn-fed meats. Cheap corn is often times the principal ingredient in low
cost processed foods, and technology has provided a way to do it the most inexpensive way
possible. While food in general has not seen a decline in prices, unhealthy food has, and studies
are now beginning to show a clear link between obesity and low-cost foods (Hojjat, 2015).
When individuals shop for food and are met with the decision to spend less than more, often
times it’s a very easy decision to make especially for low-income families. Regrettably the act
of being thrifty and economical, more often than not, equates to being unhealthy and overweight.
The food industry and their advertisements are also partly to blame for the alarming rate
of obesity growth in America. Restaurants and fast food places are opening on every corner
making it convenient, fast, and relatively inexpensive to eat out. Brownell (2004), states that the
profit motive of the food industry makes it nearly impossible to attain the nutritional needs of
this country. More food consumption means more profit; cheaper ingredients means more profit.
This suggests that the least healthy ingredients will be used to cut costs and marketing will do
it’s best to get individuals to buy the product. Sadly advertisement is not only for adults but also
children. Children are bombarded with images of sugary cereals, soft drinks, and a variety of
unhealthy snacks. According to Brownell (2004), just banning these advertisements could result
in an 18 percent reduction in overweight children. The food industry is a powerful machine and
it will take a powerful force to overcome this obstacle in the fight against obesity.

Many recent studies have shown that obesity rates are disproportionately high among
groups with low-incomes, suggesting that poverty is a causal factor for the occurrence of obesity.
According to Hojjat (2015), “during 2007-2009 the percentage of obese individuals has been the
highest for low-income families (35.2 percent) and the lowest for higher income families (24.5)”
(p. 87). Even though the cost of food in general has decreased by 16 percent relative to other
goods since the 1960’s, the cost of energy-dense foods or “junk food” has decreased even more
so (Hojjat, 2015). When a low-income family goes shopping for food, their choices are based on
buying the most amount of energy for the lowest cost possible, which basically results in an
unhealthy diet as healthy foods are less energy dense and cost relatively more (Martin, 2005).
While an unhealthy diet alone cannot cause obesity, most people do not account for the high
caloric content of the unhealthy food they buy, which results in eating the same amount of food
regardless of the food’s energy density. Martin (2005) writes about an U.S. study of low-income
women that found that a decrease of $10-20 per month in food expenditures resulted in a net
increase of 300 kcal/day in daily energy intakes. Therefore, an inverse relationship exists
between income and the amount of calories consumed. The lower the income, the more energy-
dense food consumed, the higher the rate of obesity.
The costs of obesity are fast approaching disastrous levels and could eventually lead to
great economic loses not only from growing medical expenses but also from low worker
productivity due to both physical and psychological disabilities (Hojjat, 2015). Currently it is
estimated that medical spending could very well be as much as 100 percent more for obese
individuals than for normal weight adults. Annually, the extra money spent on obesity related
health problems could amount to as much as $147 billion for adults and $14.3 billion for children
(Hojjat, 2015). These numbers are devastating not only because of the strain to the economy but

also because they infer that people are dealing with any number of terrible diseases that are
preventable and unnecessary. According to Hojjat (2015), “around 80 percent of obese
individuals have diabetes, high cholesterol, high blood pressure or heart disease” (p. 88). Not to
mention are the host of other diseases that have been linked to obesity such as, stroke, uterine
cancer, breast cancer, colon cancer, gall bladder cancer, sleep apnea, arthritis, osteoarthritis, and
depression (Hojjat, 2015; Goel, 2006). The impact of eliminating obesity would be huge in
creating better health and substantially cutting healthcare spending.
There are also various indirect costs of obesity that are detrimental to the economy and
society. Obesity tends to cause low worker productivity and premature mortality which results
in losses for U.S. businesses. “Mortality costs include future income lost as a results of
premature death. Morbidity costs factor income lost from decreased productivity, restricted
activity, and absence from work” (Hojjat, 2015, p. 88). It is estimated that $73.1 billion per year
are lost in the United States among full-time employees as a result of obesity (Hojjat, 2015).
Beyond these monetary costs, obese people also bear substantial emotional costs due to societal
prejudices against the overweight. There is evidence that weight-related discrimination exists in
the market for jobs as well as with promotions (Goel, 2006). Consequently, obesity is
detrimental on all fronts and at all levels of the social infrastructure in the United States. It is
imperative to find effective solutions quickly to stop the high medical, economic, and social
costs obesity is causing.
Although it is clear that the obesity rate in America is growing at an alarming rate, it does
not mean that policy makers aren’t trying to come up with ways to solve the problem. Because
there is strong evidence linking obesity to eating away from home, the government passed The
Health, Hunger-Free Kids Act, in December of 2010. This act called for the U.S. Department of

Agriculture (USDA) to update nutritional standards for school meals and the standards for
healthier school meals took full effect at the beginning of the 2012-2013 school year. “Meals
that meet the standards include more fruits, vegetables and whole grains, low-fat dairy products
and fewer unhealthy sugars and fats” (The State of Obesity, 2014). In the 2014 school year, 86
percent of schools were serving healthier meals and by doing so the schools were receiving an
incentive of six cents per meal served. The idea is for schools to continue striving to provide
healthier meals (The State of Obesity, 2014).
Reports show that “Millions of children rely on the school meals program. For some
children, the only reliable meals they have are in school” (The State of Obesity, 2014). Children
spend most of their lives in school, and there is no surprise that they consume more than half of
their total daily calories at school. Therefore, having healthy school nutrition policies can have a
positive impact on children's health. The current policies put in place in schools not only ensure
that junk food is less likely to be sold on school grounds, but also guarantee that children will be
provided healthy meals for breakfast and lunch (The State of Obesity, 2014).
Fast food meals have grown to be very popular, but they hold no nutritional value. The
meals have high caloric density and are marketed directly to young children. In many cases the
meals come with a toy, which makes it no surprise that children often times prefer a fast food
meal over a nutritional meal at home, in the end resulting in obese and overweight children.
According to a study conducted by the Yale Rudd Center for Food Policy & Obesity, in 2009 the
fast food industry spent $4.2 billion on advertising to all ages and in 2006, $660 million was
spent directly on advertising specifically to young people (Harris, 2010). Studies have found that
children who are only 3-6 years old are able to fully understand and remember advertising
especially when cartoon characters are used (Harris, 2010). The close proximity of restaurants

also does not help as they are often close to schools and children’s homes making a huge impact
on children’s weight.
A Policy that is currently in the works will hopefully successfully restrict advertising to
children, especially in schools. As it stands now, food and beverage companies are able to reach
children in schools through “signs, scoreboards, posters, branded fundraisers, corporate incentive
programs, scholarships, and education materials” (The State of Obesity, 2014). The USDA is
focusing on this problem with a provision that will put a limit on unhealthy food marketing in
schools. “Once the rule is finalized, school districts would need to have policies in place that
only allow marketing of foods and beverages that meet the updated Smart Snacks in School
nutrition standards set by USDA” (The State of Obesity, 2014). This will be highly beneficial as
children spend much of their time in school and less exposure to unhealthy ads will help open the
doors for healthy snacks and meals.
Restaurants also pose a problem, as the menus for children do not differ than the menus
for adults. The Produce Marketing Association (PMA) and Sesame Workshop began working
together to address this problem and the resulting epidemic of childhood obesity. In October
2013, their efforts paid off and fast food chains began to change their menu options for children
and offer more nutritional meals (Harris, 2010). Subway was the first to jump on making a
healthier menu for children and spent $41 million to market healthier fruit and vegetable options
to children. The next fast food chain to follow was McDonald's by offering fruit and taking out
the soda option on the children’s menu (Harris, 2010). This is a good step in the right directions,
but many more such steps are needed to make a substantial impact on childhood obesity.
Studies show that children who live in areas of lower income homes, more fast food
restaurant, and more small convenience stores tend to be more overweight than children who live

in neighborhoods with nearby grocery stores (The State of Obesity, 2014). “More than 29
million Americans lack access to healthy, affordable foods. They live in ‘food deserts,’ meaning
they do not have a supermarket or supercenter within a mile of their home if they live in an urban
area, or within 10 miles of their home if they live in a rural area” (The State of Obesity, 2014).
Supermarkets are seen more often in predominantly white neighborhoods, while Black and
Latinos most often have access to convenience stores that offer less healthy food choices. Data
shows that adults living in neighborhoods with grocery stores have the lowest rates of obesity
(21 percent), while those living in neighborhoods with only convenience stores had the highest
rates (32-40 percent) of obesity (The State of Obesity, 2014). Consequently, proximity to
healthy food sources plays an important role in helping to understand the food choices of lower
income families and what can be done to remedy the situation.
A public-private partnership called Healthy Food Financing Initiatives (HFFI) has been
one of the channels used to help communities in need of healthier foods, where “grants and loans
are provided to full-service supermarkets or farmers’ markets that locate in lower-income urban
or rural communities” (The State of Obesity, 2014). To date the HFFI is active in 21 states and
receives funds from federal, state, and private sources. The federal government alone has
allocated more than $109 million in grants to help support healthy food grocery stores, farmers’
markets, and urban farms, and with the passing of The Agriculture Act of 2014 better known as
the Farm Bill, another $125 million has been authorized for HFFI use (The State of Obesity,
2014).
Another initiative available under the Farm Bill is called the Supplemental Nutrition
Assistance Program (SNAP), which is a direct food assistance program. In 2013, SNAP
provided “$76.06 billion in benefits to 47.6 million Americans” to help them gain access to

healthier food choices (The State of Obesity, 2014). Besides being a direct food assistance
program, SNAP has many components which including nutrition education, state incentives to
promote smart shopping and healthy eating habits, and stocking requirements for retailers to
ensure that people in the program have healthier food options. SNAP even set aside funds to
develop strategies to provide its recipients with incentives to buy more fruits and vegetables (The
State of Obesity, 2014).
Overeating is not the only cause for the obesity epidemic in the United States. Physical
activity has greatly decreased among adults and children. Busses and cars have mostly
completely replaced walking and bicycling and sports activities in schools tend to be the first to
be cut due to financial constraints. “National recommendations call for children and adolescents
to get at least 60 minutes of physical activity per day, most of which should be moderate or
vigorous in intensity” (The State of Obesity, 2014). Unfortunately, as of 2014, the first U.S.
report card on physical activity found that only about a quarter of children met that
recommendation (The State of Obesity, 2014). Currently the only federal funding for physical
education comes from The Carol M. White Physical Education Program (PEP) which provides
grants to school districts that have physical fitness programs in place that could help students
reach state physical education standards. In 2014, $74.6 million was allocated for PEP and while
all public schools in the nation have some sort of physical education, only about 5 percent of
school districts actually meet the recommended daily amount of physical education (The State of
Obesity, 2014).
As the first lady, Michelle Obama saw the need for more physical activity among
children and started a campaign called Let’s Move! Active Schools. The campaign states that
childhood obesity rates have tripled in the United Stated just over the past three decades. As of

today, one in three American children are overweight or obese, with that number closer to 40
percent for African American and Hispanic children (Let’s Move, n.d.). The prediction is that
“one third of all children born in 2000 or later will suffer from diabetes at some point in their
lives. Many other will face chronic obesity-related health problems like heart disease, high
blood pressure, cancer, and asthma” (Let’s Move, n.d.). Schools are encouraged to sign up for
Let’s Move! Active Schools, where they will receive help in developing a fitness program for
their school. Each school will have access to activation grants, program materials, in-person
training, and support from certified professionals (The State of Obesity, 2014). Even though
physical activity is not where it should be, the resources are out their for school to utilize in
making a more healthy lifestyle for their students possible.
With the rate of obesity in the United States at this time, the outlook for the future is not
good and borders on catastrophic. The Centers for Disease Control (CDC) estimated that in
2008, the annual medical cost of obesity in the U.S. was a staggering $147 billion. Obese people
had on average, medical costs that where $1,429 higher than those of normal weight people
(Centers for Disease Control and Prevention, 2014). These numbers can only be expected to rise
if dramatic changes do not take place in the near future and that will mean enormous economic
losses that will affect society at large. “Future economic losses could mean the difference
between solvency and bankruptcy for Medicare, between expanding and shrinking health care
coverage, and between investment in and neglect of our social infrastructure, with profound
implications for our international competitiveness” (Hojatt, 2015, p. 89). Above all, the human
cost due to obesity related diseases such as coronary heart disease, type 2 diabetes, cancers,
hypertension, dyslipidemia, stroke, liver and gallbladder disease, sleep apnea, respiratory

problems, osteoarthritis, gynecological problems, infertility, and mental health conditions would
be immeasurable (Centers for Disease Control and Prevention, 2014).
First lady Michelle Obama has taken a step in the right direction, as have many various
federal and public organizations. A solution is out there, but it will take more than the president
and more than the federal government to change the way people are. Parents are going to have
to encourage their children to play outside, to change the foods they are giving them and limiting
the amount of sugars and unhealthy fats they are consuming. Schools will need to serve less
processed and frozen food items, and offer options like a salad bar and fresh fruit. This is also
going to require the government to give more funding to schools in order for them to be able to
afford the changes. More physical activity should become a big priority just like math and
science are. Role models need to step up and begin taking action, just like the National Football
League (NFL) has with a campaign called “NFL Play 60.” This campaign encourages children
to get outside and play for 60 minutes every day (National Football League, 2007). They even
held camps, and went out into the community and offered their time to teach children how to
play football, in the hopes that more people would join their campaign. Community outreach is
important in fighting obesity because it gives people the opportunity to get educated on the
subject. Children are the future, therefore it’s important to give them hope, success, and healthy
living so that they can go on and teach their children the same.
The United States government plays a huge role in providing better foods, as they are
largely responsible for supporting schools in supplying meals for students who can’t afford it.
“The National School Lunch Program supports student nutrition in over 101,000 schools and
residential facilities. It provides free and reduced priced meals to low-income children before
school, during school, after school, and over the summer” (New America Foundation, 2014).

This is a benefit to the children that will otherwise go hungry, but the nutritional content of the
food provided is often times questionable. In the documentary Fed Up, many high school
students were followed in their journey of struggling with obesity. Most of their schools offered
low fat, fat free, or sugar free foods. Unfortunately these pseudo healthy options were in fact full
of either sugar or fat to make them taste good, which makes them less healthy than the original
version (Soechtig, 2014). The government is promoting a healthy diet for students, but the
standards and regulations are lacking. To fully utilize the power they hold will require a more
stringent measurement of what can and cannot be allowed in schools throughout America.
Unhealthy food taxation, or what is commonly referred to as the “fat tax,” has been hotly
debated in the recent years. The idea of taxing unhealthy food and or raising the prices is a way
to help reduce the amount purchased and to influence food choice in the direction of more
healthy choices. While the price increase would be difficult for low-income families, it would
make many re-think the purchase of “junk food,” as the price would be equal to or more than
healthier foods. It is estimated that “A tax of at least 20 percent placed on sugar-sweetened
drinks could drop obesity rates by 3.5 percent and prevent 2,700 heart-related deaths each year”
(Salahi, 2012). The hope is that an unhealthy food tax will guide people to purchase other goods
that are healthier and contain less sugar, sodium, and unhealthy fats.
A way to make healthy foods more affordable is to cut existing agricultural subsidies for
commodities such as corn and soy and instead to subsidize fruit and vegetable cultivators. The
current subsidies keep the cost of unhealthy foods low and the cost of healthy foods comparably
high. Subsidized corn is one of the main ingredients in most “junk food,” and the principle
sweetener for most products. Americans are estimated to consume 73 percent of corn-derived
sweeteners per person, per year, which unfortunately is a direct result of the government’s farm

policy (Hojatt, 2015). Many question whether lowering the prices of healthy foods and
increasing the prices of energy-dense foods will in fact have an impact on what people buy.
After all it is difficult to change ones eating behavior after years of developing certain tastes and
habits. To test this theory, several small-scale experiments where done where healthy food was
made more affordable than unhealthy food at different schools and work sites. The results
suggest that this theory is indeed sounds, as the consumption of healthy food was increased when
the prices became more economically appealing (Martin, 2005). It is time for the U.S.
government to take a firm stand on this issue and make some concrete resolutions about what
should and should not be subsidized.
Obesity is very complex with many different factors involved and thus requires perhaps
more dedication and commitment from both the healthcare professional and individual than any
other disease. Insurance companies are very significant in that they have the ability to either
deny or approve the kind of help an obese person may need. Sometimes what is needed is not
strictly medical in nature but is still absolutely necessary for the process to work. Insurance
companies should provide coverage for items such as a nutritionist, gym memberships, bariatric
surgeries, and even personal trainers. Those who are obese need a lot of support and guidance
when it comes to physical activity and eating right, as there is some danger involved if the
regimen is not performed correctly. The costs of providing alternative and preventative care are
greatly lower than the costs of expensive surgeries and costly secondary diseases such as
diabetes and coronary heart disease. By providing coverage for less expensive options, money
could be saved in the long run from preventative efforts.
With the introduction of the Affordable Health Care Act, insurance companies are now
required to offer some sort of plan to help obese people lose weight. Screening and counseling is

required under the new healthcare act but the rest of the coverage plan is up to each individual
insurance company to decide. “Plans vary widely in what they will do. Some insurers are
offering telephone counseling; others cover visits with a health coach, and some cover group
sessions that offer lifestyle advice. Some are even referring patients to Weight Watchers”
(Hellmich, 2013). More needs to be done to standardize treatment and coverage for obesity so
that people don’t fall through the cracks of bureaucracy. There are some who will completely
miss out on the added benefits of the Affordable Health Care Act because “some grandfathered
plans don’t have to cover obesity screening and treatment if they haven’t changed their overall
coverage since 2010 when the law was passed” (Hellmich, 2013). To put a dent in the obesity
epidemic, this disease needs to be recognized as a serious medical condition with an aggressive
standardized treatment plan that is covered by all insurances with no stipulations.
Obesity was just recently recognized as an official disease by the American Medical
Association, the nations largest physician organization (Hellmich, 2013). Finally the obesity
epidemic is being acknowledged for what it is, a terrible expensive disease that could cause
devastating economic and human losses in the future. Changes in technology, the progressive
food industry, pervasive advertising, inexpensive “junk food,” and poverty have all converged
into a vortex of bad choices and unhealthy living. As healthcare spending began to soar due to
obesity and the numerous diseases that came with it, federal and public organizations finally
began to address the problem. Campaigns and programs such as Let’s Move! Active Schools,
NFL Play 60, the Healthy Hunger-Free Kids Act, HFFI, SNAP, and PEP began to spring up and
take action. Unfortunately the efforts of today are not enough to stem the tide of the damages
already done. The World Health Organization (WHO) has stated that, “the key to maintaining a
healthy weight is an affordable supply of fresh nutrient-rich foods” (Hojjat, 2015, p. 89). The

way to accomplish this is to subsidize producers of fruit and vegetables and stop the
subsidization of corn and soy, which are key ingredients in energy-dense foods commonly know
as “junk food.” The federal government needs to have more rigid and strict dietary rules for
schools and all health insurance plans should have standardized coverage for obese patients to
not allow the disease to go unchecked. Simply put, the nation needs to take personal and social
responsibility for allowing this problem to get to this point. Only education, acknowledgment,
and the will to make changes in personal and social spheres will be able to stop the epidemic
know as obesity.

References
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