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The Value of Medican and Pharmaceutical Interventions for Reducing Obesity

Author

Listed:
  • Pierre-Carl Michaud
  • Dana Goldman
  • Darius Lakdawalla
  • Yuhui Zhen
  • Adam H. Gailey

Abstract

This paper attempts to quantify the private and public economic value of reducing obesity through pharmaceutical and medical interventions. We find that the economic value of such treatments, in particular bariatric surgery, is large for treated patients, with incremental cost-effectiveness ratios typically under $20,000 per life-year saved. Our approach accounts for competing risks to life expectancy, health care cost savings, and other non-medical fiscal consequences. Most of the therapeutic value is generated by longer healthy life expectancy, with modest contributions from health spending, taxes and other spending. Obesity treatment generates substantial per-period savings in medical costs, but it also raises lifetime medical and annuity costs by extending life. On balance, treatment generates substantial private economic value and lowers the prevalence of obesity, but the aggregate fiscal effects on the public-sector are small.

Suggested Citation

  • Pierre-Carl Michaud & Dana Goldman & Darius Lakdawalla & Yuhui Zhen & Adam H. Gailey, 2011. "The Value of Medican and Pharmaceutical Interventions for Reducing Obesity," Cahiers de recherche 1109, CIRPEE.
    • Handle: RePEc:lvl:lacicr:1109
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    File URL: http://www.cirpee.org/fileadmin/documents/Cahiers_2011/CIRPEE11-09.pdf
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    1. is not listed on IDEAS
    2. Christian Bührer & Stefan Fetzer & Christian Hagist, 2018. "Adverse Selection in the German Health Insurance System – The Case of Civil Servants," WHU Working Paper Series - Economics Group 18-06, WHU - Otto Beisheim School of Management.
    3. Bauer, Daniel & Lakdawalla, Darius & Reif, Julian, 2025. "Health risk and the value of life," Journal of Public Economics, Elsevier, vol. 245(C).
    4. David B Agus & Étienne Gaudette & Dana P Goldman & Andrew Messali, 2016. "The Long-Term Benefits of Increased Aspirin Use by At-Risk Americans Aged 50 and Older," PLOS ONE, Public Library of Science, vol. 11(11), pages 1-12, November.
    5. Duncan Ermini Leaf & Bryan Tysinger & Dana P. Goldman & Darius N. Lakdawalla, 2021. "Predicting quantity and quality of life with the Future Elderly Model," Health Economics, John Wiley & Sons, Ltd., vol. 30(S1), pages 52-79, November.
    6. Daniel Bauer & Darius Lakdawalla & Julian Reif, 2018. "Mortality Risk, Insurance, and the Value of Life," NBER Working Papers 25055, National Bureau of Economic Research, Inc.
    7. Cawley, John, 2015. "An economy of scales: A selective review of obesity's economic causes, consequences, and solutions," Journal of Health Economics, Elsevier, vol. 43(C), pages 244-268.
    8. Kaixing Huang & Qianqian Hong, 2024. "The impact of global warming on obesity," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(3), pages 1-32, September.
    9. Julia Thornton Snider & Jeffrey Sullivan & Emma van Eijndhoven & Michael K Hansen & Nobel Bellosillo & Cheryl Neslusan & Ellen O’Brien & Ralph Riley & Seth Seabury & Bertram L Kasiske, 2019. "Lifetime benefits of early detection and treatment of diabetic kidney disease," PLOS ONE, Public Library of Science, vol. 14(5), pages 1-13, May.
    10. Bührer, Christian & Fetzer, Stefan & Hagist, Christian, 2020. "Adverse selection in the German Health Insurance System – the case of civil servants," Health Policy, Elsevier, vol. 124(8), pages 888-894.

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    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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