TY - JOUR AU - Michaud,Pierre-Carl AU - Goldman,Dana AU - Lakdawalla,Darius AU - Zheng,Yuhui AU - Gailey,Adam TI - Understanding the Economic Consequences of Shifting Trends in Population Health JF - National Bureau of Economic Research Working Paper Series VL - No. 15231 PY - 2009 Y2 - August 2009 UR - http://www.nber.org/papers/w15231 L1 - http://www.nber.org/papers/w15231.pdf N1 - Author contact info: Pierre-Carl Michaud RAND Corporation 1776 Main Street Santa Monica, CA 90401 E-Mail: michaud@rand.org Dana Goldman Schaeffer Center for Health Policy and Economics University of Southern California 3335 S. Figueroa St, Unit A Los Angeles, CA 90089-7273 Tel: (213) 821-7948 Fax: (213) 740-3460 E-Mail: dana.goldman@usc.edu Darius N. Lakdawalla Schaeffer Center for Health Policy and Economics University of Southern California 3335 S. Figueroa St, Unit A Los Angeles, CA 90089-7273 Los Angeles, CA 90 Tel: 213/740-6012 E-Mail: dlakdawa@healthpolicy.usc.edu Yuhui Zheng RAND Corporation E-Mail: yuzheng@hsph.harvard.edu Adam Gailey The RAND Corporation 1776 Main Street P.O. Box 2138 Santa Monica, CA 90401 E-Mail: agailey@rand.org AB - The public economic burden of shifting trends in population health remains uncertain. Sustained increases in obesity, diabetes, and other diseases could reduce life expectancy - with a concomitant decrease in the public-sector’s annuity burden - but these savings may be offset by worsening functional status, which increases health care spending, reduces labor supply, and increases public assistance. Using a microsimulation approach, we quantify the competing public-finance consequences of shifting trends in population health for medical care costs, labor supply, earnings, wealth, tax revenues, and government expenditures (including Social Security and income assistance). Together, the reduction in smoking and the rise in obesity have increased net public-sector liabilities by $430bn, or approximately 4% of the current debt burden. Larger effects are observed for specific public programs: annual spending is 10% higher in the Medicaid program, and 7% higher for Medicare. ER -