HealthDay News — Obesity accounts for nearly 21% of U.S. health care costs, much higher than previously estimated, a recent study suggests.

Obesity is projected to raise annual medical costs $2,741 per year (in 2005 dollars), according to estimates derived using restricted-use data derived from the Medical Expenditure Panel Survey for 2000 to 2005 and the method of instrumental variables (IV) model, which utilizes genetic variation in weight as a natural experiment.

This is more than four times higher than previous estimates, which associated obesity with $656 more in medical care costs per year, John Cawley, PhD, from Cornell University in Ithaca, New York, and Chad Meyerhoefer, PhD, from Lehigh University in Bethlehem, Penn reported in  the Journal of Health Economics.

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The IV model is thought to be more accurate by reducing the bias from reporting error in weight.

“These results imply that the previous literature has underestimated the medical costs of obesity, resulting in underestimates of the economic rationale for government intervention to reduce obesity-related externalities,” the researchers wrote.

Cawley J, Meyerhoefer C. J Health Econ. 2012;31(1):219-230.