Two big reasons to doubt that this would lower overall expenditures. First, if widespread use of Ozempic reduces obesity-related expenditures, it will likely lead to longer lifespans—and the illnesses of old age would likely cost more than the savings from Ozempic. (There’s a dark policy joke that says if you want to reduce HC spending, persuade everyone to begin smoking cigarettes at age 10. Far fewer will long long enough to rack up the expenses associated with old age.) Second, even if Ozempic’s cost benefits more than offset the resulting extra old-age spending, it’s likely that the freed-up funds would be diverted to other HC expenses—including new, innovative services whose development could be financed out of the Ozempic-related cuts. … Good article, Markus. I’m working on a piece on these two effects right now.
Thanks, Bob. Your points are well taken, but I think the case is better for Ozempic than many health innovations. Obesity is an expensive way to both live and die.. 4-8% of US health expenditures by some estimates.
Great points! Perhaps there are other factors to add, though. Would treating obesity lead to less sick leave taken and more ability to earn? With longer life spans, is there a benefit to the economy for more goods and services provided to those treated? Trying to track the major costs and benefits is fascinating in discussions like these.
Absolutely valid questions. But the question was about the frequent claim "This will reduce healthcare spending." And that has nothing to do with the question, "Will the financial gains of longevity exceed the financial losses of purchasing longer lifespans?" You have validated my point--which is that it's critical to determine which variable you're focused on.
Sep 30, 2023·edited Sep 30, 2023Liked by Markus Bjoerkheim
We don’t know the long term effects of semaglutide and how durable the effects are. There should be a hook in any buyout that takes into account that the effects may wear off or that there could be adverse effects that did not show up in trials.
My understanding is that we expect many to stay on it for life, but time will tell. It seems plausible that there would be an interaction effect over the longer term where semaglutide enables a more active lifestyle thereby reducing the need/dose necessarry to maintain the weightloss, but if that's the case it seems that will be years down the road: https://www.insider.com/semaglutide-take-for-life-or-weight-comes-back-doctor-2022-12
Two big reasons to doubt that this would lower overall expenditures. First, if widespread use of Ozempic reduces obesity-related expenditures, it will likely lead to longer lifespans—and the illnesses of old age would likely cost more than the savings from Ozempic. (There’s a dark policy joke that says if you want to reduce HC spending, persuade everyone to begin smoking cigarettes at age 10. Far fewer will long long enough to rack up the expenses associated with old age.) Second, even if Ozempic’s cost benefits more than offset the resulting extra old-age spending, it’s likely that the freed-up funds would be diverted to other HC expenses—including new, innovative services whose development could be financed out of the Ozempic-related cuts. … Good article, Markus. I’m working on a piece on these two effects right now.
Thanks, Bob. Your points are well taken, but I think the case is better for Ozempic than many health innovations. Obesity is an expensive way to both live and die.. 4-8% of US health expenditures by some estimates.
To Gary's point, the indirect costs (lost productivity, work absenteeism, premature deaths to comorbidities) appears to be larger than direct expenditures according to this review https://bmcresnotes.biomedcentral.com/articles/10.1186/1756-0500-7-242
Great points! Perhaps there are other factors to add, though. Would treating obesity lead to less sick leave taken and more ability to earn? With longer life spans, is there a benefit to the economy for more goods and services provided to those treated? Trying to track the major costs and benefits is fascinating in discussions like these.
Absolutely valid questions. But the question was about the frequent claim "This will reduce healthcare spending." And that has nothing to do with the question, "Will the financial gains of longevity exceed the financial losses of purchasing longer lifespans?" You have validated my point--which is that it's critical to determine which variable you're focused on.
That’s a very interesting concept and I appreciate your bringing it to Substack!
We don’t know the long term effects of semaglutide and how durable the effects are. There should be a hook in any buyout that takes into account that the effects may wear off or that there could be adverse effects that did not show up in trials.
My understanding is that we expect many to stay on it for life, but time will tell. It seems plausible that there would be an interaction effect over the longer term where semaglutide enables a more active lifestyle thereby reducing the need/dose necessarry to maintain the weightloss, but if that's the case it seems that will be years down the road: https://www.insider.com/semaglutide-take-for-life-or-weight-comes-back-doctor-2022-12