According to the Commonwealth Fund, the US spends 17% of its GDP, or roughly twice as much, on healthcare as the average OECD nation. Can weight-loss medications like Ozempic help reduce that? A recent study suggests that the likely answer is no. However, other medical advances have momentarily altered the trajectory of US spending. There is hope that the world's fattest developed nation can permanently stall its growth.
According to a government forecast released in June, expenditure will increase by 5.6% a year until 2032. The aging population and low healthcare productivity, among other factors, are expected to cause it to rise faster than the entire economy, according to the Centers for Medicare and Medicaid Services. The organization estimates that by 2032, the US will spend $22 trillion, or nearly 20% of GDP.
That is consistent with the long-term trajectory of US medical treatment costs. From 1960 to 2010, the share of GDP devoted to healthcare tripled. The problem is that the relative figure hasn't changed in the past ten or so years.
The current slowdown is not fully explained by obvious suspects. Probably the Affordable Care Act helped. However, the growth in medical spending was already slowing down before the ACA was passed in 2010, and the main parts of it weren't implemented until 2016. Some consequences, such as the epidemic, might only last temporarily.
There are some grounds for optimism in other reasonable explanations. Joseph Newhouse, a professor at Harvard, noted that while medical advancements increase welfare, people are now prepared to pay for them. Aspirin is still used, but they also take cancer treatments that cost $100,000 these days. The introduction of important medications might also have been beneficial. Between 2005 and 2012, spending on cardiovascular care decreased significantly, with half of that decrease being attributed to medications like statins, according to Harvard Professor David Cutler.
Treatments for obesity from Novo Nordisk and Eli Lilly may have similar effects. The medication is probably not cost-effective to use for those who are not diabetics, as list prices start at about $1,000 per month. However, according to nonprofit KFF, the average medical expense for an obese health plan member in 2021 would be $12,588—or 2.7 times higher than that of a non-fat person. Based on the existing population, the savings would be approximately $250 billion a year, or nearly 18% per obese patient, if the net expense of the prescription could be cut to $500 per month, thus reducing patients' medical expenses to those of non-obese persons. Furthermore, that can understate the savings. In 2032, the US would save around $2.6 trillion if healthcare spending was limited to 17% of GDP.
Of course, those who are thinner could have higher or different medical expenses. However, obesity is linked to the majority of the leading causes of death and disease in the US. An ounce of cure can worth a lifetime of expense.