Bicycles, Cars, Obesity, Land Use, and Healthcare Spending: What's the Connection?

Biking increases longevity.

It is widely known that obesity is an epidemic in America. Just a few years ago, the U.S. Surgeon General, Dr. David Statcher, announced that obesity had surpassed smoking as the leading cause of disease and death in the country. And a growing body of research tells us that even low and moderate physical activity - like walking and bicycling - significantly contributes to individual health and cuts one's chances of becoming obese.

The question that I want to address in this post is: how should this knowledge play into public policy decisions, particularly in regards to transportation and urban design?

My general feeling is that it should factor in far more than it has in the past (which is absolutely not at all). The built environment has a big effect on people's activity levels, and the planners and engineers of decades past have engineered a society in which it is actually difficult to NOT be sedentary.

And that isn't efficient nor optimal. Indeed, everyone in this accidentally engineered sedentary society is also burdened by an "obesity tax" and an "inactivity tax." Whether or not you personally are obese, you will definitely pay this tax levied upon you via obese peers, since insurance works by spreading healthcare costs to everyone.

But before we get ahead of ourselves, let's lay out the important points and supporting evidence to see where it takes us...

1. Obesity is a major health epidemic that is costing the citizens of America (through both its public and private healthcare systems) billions of dollars.

A 2004 study (available below) recently found that in Oregon alone, annual Medicare and Medicaid expenditures on obesity-related health complications (e.g. not including private insurance costs) totaled $325 million! Of course, Medicare and Medicaid are government programs that we all pay for via payroll taxes.

In addition to this more easily documented expenditure of public resources, obese persons with private insurance also end up costing others money.

What exactly does this cost add up to?

This is something that has been the subject of much investigation since obesity rates keep rising and due to the fact that obese people tend to consume a lot more healthcare services.

A 2005 analysis printed in Health Affairs concluded that obese people spend about 37.5% more on healthcare each year, or around $730. This does not include overweight people, however, simply the morbidly obese. The analysis found that overweight people who are not obese spend roughly an additional $250 a year.

The RAND Corporation has investigated how much this increased medical spending by overweight and obese people costs other people. While siting recent research that found the average taxpayer spends about $175 a year to finance obesity-related medical costs of those on Medicare and Medicaid alone, their analysis concluded that the "obesity externality" imposes a welfare cost of about $150 per capita. And for what it's worth, I judge this to be a pretty a conservative estimate.*

2. Because of our insurance system people don't pay for the full costs of their own healthcare. However, they do help pay for the healthcare costs of other people.

As was touched on above, obese people share the costs of their medical care with those who are not overweight. (Of course this is a generality- there are many exceptions, though the general rule still holds.) The main reason that obese people do not pay for the full costs associated with their obesity is insurance (whether public or private).

The whole point of health insurance is for healthy people to share the risk of healthcare costs with less healthy people. In effect, this means that healthy people subsidize the healthcare costs of unhealthy people. When the illnesses are random and the product of things beyond one's control - brain tumors, accidents, many communicable diseases, etc.- this system works great.

But what about when people's lifestyle choices are the cause of their healthcare costs? In this case, you can argue that there is a market failure, since some people can indulge in lifestyle choices that are fun in the short-run but costly (in terms of healthcare costs) over the long haul - and they do not have to pay for the full costs of their personal decisions.

By society sharing the costs of healthcare that is necessitated by behavioral choices (say, smoking), those partaking in the behaviors (in this case, smokers) are relieved of a potentially potent disincentive to the behavior (the full cost of their healthcare)- and economic theory says that by removing these costs, you affect one's decision making.

That's a classic market failure. The conclusion: especially when obesity is the consequence of personal decisions, obese people create negative externalities - in the form of a healthcare bill- that everyone else picks up.

So, right now, non-smokers subsidize smokers, risk-averse people subsidize thrill seekers, and physically active, normal-weight people subsidize sedentary and obese people, to name a few of the obvious examples. The bottom line is that obese people create significant costs that are passed along to their healthy peers.

3a. A leading cause of obesity is a sedentary lifestyle, and the amount of time you spend in a car is correlated to the likelihood that you are overweight or obese. Conversely, the amount of time you spend walking or bicycling is correlated with a decreased chance that you are overweight or obese.

3b. The amount of time you spend in the care is linked with the type of built environment one lives in. People in suburbs tend to drive more than urbanites (who walk), and tend to be more overweight and obese, as well - all other things equal.

It should come as no surprise that when you walk and bike regularly, you are less likely to be obese. And from there, it should not be a great leap to realize that where people live has a large influence on how often they bike, walk, take transit, or drive.

There have been a series of studies that actually link driving with obesity. Likewise, there have been studies that link living in the suburbs (where you are more apt to dive) with obesity, and a decreased likelihood of obesity if you live in a walkable urban area. This should come as no surprise since in sprawling urban and suburban areas where few travel options exist, cars are now used for 80% of trips less than one mile in length!

A recent 2004 study titled "Obesity Relationships with Community Design, Physical Activity, and Time Spent in Cars," written by Lawrence D. Frank, PhD, Martin A. Andresen, MA, and Thomas L. Schmid, PhD that was published in the American Journal of Preventative Medicine found that the amount of time you spend in a car and the type of community you live in are good predictors of whether or not you will be obese, even after adjusting for race, income, education, and other factors. You can read this study in its whole form below, but the results state (emphasis added):

"Results: Land-use mix had the strongest association with obesity (BMI30 kg/m2), with each quartile increase being associated with a 12.2% reduction in the likelihood of obesity across gender and ethnicity. Each additional hour spent in a car per day was associated with a 6% increase in the likelihood of obesity. Conversely, each additional kilometer walked per day was associated with a 4.8% reduction in the likelihood of obesity."

The American Journal of Health Promotion recently published a study, "Relationship Between Urban Sprawl and Physical Activity, Obesity, and Morbidity" written by Reid Ewing, Tom Schmid, Richard Killingsworth, Amy Zlot, and Stephen Raudenbush. It found that "after controlling for demographic and behavioral covariates" the amount of sprawl where one lived had statistically "significant associations with minutes walked, obesity, Body Mass Index, , and hypertension. Residents of sprawling counties were likely to walk less during leisure time, weigh more, and have greater prevalence of hypertension than residents of compact counties. At the metropolitan level, sprawl was similarly associated with minutes walked."

4. This means that car drivers -all other things equal- create negative externalities for society at large that bicyclists, pedestrians, and transit riders (who also tend to walk more) DO NOT create.

Those who tend to bicycle will cost their peers less in healthcare costs or "the obesity tax," since they will consume less healthcare services and will actually help foot the bill for their unhealthy peers. Those who tend to drive the most, however, will cost their peers the most, all other things equal.

The types of cities we build for ourselves really affect the transportation choices people make. And right now, the choices planners from the past have made means that we currently live in an accidentally engineered society that promotes driving and a sedentary lifestyle, despite the fact that this creates a whole host of problems, health and otherwise.

6. The public policy that will most reduce everyone's "obesity tax" -that is largely born from a sendentary lifestyle and a reliance on driving - then, is to promote transit-rich, walkable, bike-friendly environments where people can get to where they need to go without driving a car. This will successfully reduce the nation's healthcare costs, which will save everyone money.

I am sure that there will be a lot of people who will want to squabble with specific points I've made here, but the main take-away is simple: that everyone benefits when people take care of their health. And so, everyone benefits when people choose to be more active and jump on a bicycle instead of driving an automobile.

I guess this is also an attempt to illustrate that transportation choices create more costs and benefits for society at large than are easily and superficially captured in the marketplace. There are a lot of things (pollution, health, etc.) that do not get explicitly factored into the conversation about what the ideal transportation mode split is and what our transportation investment decisions should be, since nobody has really taken a look to see what these costs or benefits add up to.

But regardless of whether the research has actually yet been done, there are real costs and real benefits that should (I'd argue must) play a role in our conversations about the kind of world we want to live in and build together.

Read the studies below. Then share your thoughts.

*(To me, this $150 figure seems to be a pretty conservative estimate, though while I believe that my online search of the academic literature was fairly thorough, I admit it was not exhaustive. One issue that I think brings RAND's estimates in on the low end of the scale is that the authors assume a rather high coinsurance rate, which influences their findings. The authors assume a 17.5% coinsurance rate, when in 2004 the average coinsurance percentage paid for a doctor visit for employees enrolled in employer-sponsored health insurance was 18.6 percent, and this does not take into account taxpayer funded healthcare like Medicare and Medicaid.(1) This means that their model likely understates the costs that people who are not covered by health insurance pass onto the people paying their healthcare bill. When you consider those who have public insurance and those who don't pay for any of their care at all [including especially costly emergency room visits], this issue of a coinsurance rate that includes public subsidies may lead to a significantly different finding.)

Attachment	Size
OBSESITY Health care costs hlthaff.w3.219v1.pdf	96.49 KB
State Expenditures on Obesity 18.pdf	222.81 KB
(Obesity Health Insurance Externality)RAND_WR340.pdf	294.61 KB
RAND- Obesity Trends & Spending.pdf	105.18 KB
Car Use, Land Use, and Obesity.pdf	375.46 KB
Relationship between Urban Sprawl and Physical Activity, Obesity and Morbidity AJHP-18-01-EWING.pdf	133.54 KB

Roland Chlapowski's recent posts | Print this page

Posted Tue, 11/21/2006 - 3:46pm.

[[ Categories: Office of Transportation | Transportation ]]

Europe's going there too....

Submitted by Evan Manvel, BTA on Tue, 11/21/2006 - 4:38pm.

Thanks for the thoughtful post, Roland. This is why 53 European health ministers recently committed to action on obesity, including bicycle-priority streets and safe routes to school for kids.

Another suggestion to learn

Submitted by jim karlock on Wed, 11/22/2006 - 11:56am.

Another suggestion to learn from third world countries. Be careful you don't end up duplicating their low standard of living.

Thanks
JK