Media releases

March 29, 2010

Obesity interventions weighed for cost effectiveness

New research by Medibank has revealed for the first time the success rates and cost effectiveness of various interventions available to combat Australia's obesity epidemic.

Obesity in Australia: the financial impacts and cost-benefits of intervention evaluates the success and economic benefits of common obesity interventions. Three types of intervention were examined, including "lifestyle" interventions - referring to a combination of dieting, physical activity and counselling - pharmacological interventions and bariatric surgery - popularly known as lap-banding.

The report also models the cost of obesity to Australia, putting the total direct, indirect and social cost to the economy at a massive $37.7 billion in 2008/09, underlining the urgent need to address the problem. These costs accrue to individuals, business and the economy as a whole.

Medibank's Executive General Manager of Health Management, Julie Andrews, says the report forms a strong argument for greater investment in obesity interventions, by individuals, employers and at a national level.

"Our new report demonstrates that, in addition to individual health and economic benefits, strategies aimed to reduce obesity in Australia could bring significant benefits to the entire Australian community, including business, government and the economy.

"The cost savings from reducing obesity would be spread amongst various parties in the economy. Individuals would benefit through reduced health costs, improved quality of life and longer life expectancy.

"Business and employers would benefit through improved workplace productivity, the community would benefit through reduced public healthcare costs and the broad economy would benefit through increased productivity and output," Ms Andrews said.
However care should be taken in choosing the how the problem is managed to ensure interventions are an acceptable combination of success and cost effectiveness.

"Lifestyle intervention programs in particular have been shown to be both effective and have substantial net economic benefits. On the other hand, bariatric surgery has a good success rate but a negative net financial benefit due to the high upfront cost of the procedure. The net benefit suggests the need for improved targeting of bariatric surgery interventions.

The report calculates the social costs of obesity in terms of reduced quality of life and reduced life expectancy, which alone are estimated to cost Australia $30 billion a year. Indirect costs, representing the impact of obesity on workplace productivity and the size of labour force were the next largest component at $6.4 billion, while direct medical costs totalled $1.3 billion.

The research was conducted in conjunction with KPMG Econtech.


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