McKinsey: Obesity costs global society 2.0 trillion a year

24 November 2014 Consultancy.uk

Obesity is one of the three top social burdens generated by humanity’s contemporary social lifestyle. The global aggregated costs associated with being overweight or obese are significant, standing at $2.0 trillion. There are also social costs, 2.8 million of a total 59 million deaths per year are tied to obesity. These economic and socials burdens are only expected to increase, and by 2030 41% of the global population is projected to be overweight or obese, warns a new report from McKinsey & Company.

The cost of pounds
As it stands, the most significant health factor impacting global GDP are current and historic smokers, the aggregated costs of smoking are calculated to be $2.1 trillion dollars, 2.9% of global GDP. The next most significant burden is armed violence, war and terrorism, consuming 2.8% of global GDP. Obesity comes a close third, bearing a burden of $2.0 trillion dollars. 

Obesity in top three social burdens

While the global aggregate has obesity as third in terms of its social and economic burden, for individual countries there is significant variation. Particularly wealthy developed countries bear high GDP costs from obesity related conditions. In the United Kingdom, for instance, obesity generated an economic and social loss valued at $70 billion a year in 2012, or 3.0 percent of GDP. In the United States, obesity came in, after armed conflict, as the largest drag on GDP; obesity generated an impact in the United States of $663 billion a year in 2012, or 4.1 percent of GDP. In developing countries obesity is a less significant imposition on GDP, in China for instance obesity’s impact on the economy is 1.1% while in Nigeria it is a mere 0.7%.

Relative ranking of major social burdens by country

The future
Looking ahead, the researchers expect that the burden of obesity will in the coming decades only increase. Driven mainly by unhealthy lifestyles, changing food patterns and less movement, by 2020 the consulting firm forecasts that 41% of the global population will be faced with some kind of obesity – whether people are overweight or fall in obese class 3, the most form of the ‘disease’. 

McKinsey in addition attempts to unravel the key factors driving rising obesity. The firm starts off by acknowledging that the root causes of rising obesity are “highly complex”, spanning a multitude of evolutionary, biological, psychological, sociological, economic, and institutional factors. The firm does however present a number of interesting correlating factors with obesity, including the occupational status of the parent, educational achievement, area deprivation and gender. Interestingly, average household income also plays a major role. An analysis of G-20 countries with per capita GDP exceeding $8,000 shows that only Japan and South Korea have prevalence rates lower than 16 percent. “It is striking how few countries escape the pattern,” write the advisors.

With a few exceptions obesity prevalence rises with income

Holistic intervention
Based on the massive economic and societal costs coupled to obesity, and the grim outlook, McKinsey warns that fighting the disease should be a key strategic priority for public and private sector. The consultants would naturally not be true consultants if they would not have a recommendation in place – according to McKinsey, the key lies in an implementing an integral approach. “A range of interventions that encourage and empower individuals to make the required behavioural changes will be necessary”, supported by a “comprehensive portfolio of interventions per population segment.” The strategy will require cooperation at all levels of the society, including national and local governments, retailers, consumer-goods companies, restaurants, employers, media organisations, educators, health-care providers, and individuals.

In the research ('Overcoming obesity: An initial economic analysis’), the authors identify a total of 74 possible interventions, which broadly can be categorised into 18 groups. The most cost effective and efficient way of reducing the burden of obesity is portion control. This is simply the reduction in the calorie intake by reducing portion size. The second most effective method is reformulation, where the formula for high processed “pre-fabricated” foods has its calorie content reduced. Many of the other highest-impact intervention areas—parental education, introducing healthy meals in schools and workplaces, changes in the school curriculum to include more physical exercise—are also highly cost-effective*.

Scope to have high impact on obesity in a cost-effectve way

“Our list of interventions should be seen as a starting point in a broad effort to achieve a significant step change in individual behaviour and the food and beverage and physical activity environment necessary to reverse the rising prevalence of obesity,” says McKinsey.

* One major effect that obesity has on GDP is the loss of economic productivity. This productivity is analysed in terms of disability-adjusted life years (DALYs), which measures the number of years that are lost or rendered economically unproductive due to disease.

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