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Estimates of the marginal effect of measures of adiposity such as body mass index (BMI) on healthcare costs are important for the formulation and evaluation of policies targeting adverse weight profiles. Most estimates of this association are affected by endogeneity bias. We use a novel identification strategy exploiting Mendelian Randomization – random germline genetic variation modelled using instrumental variables – to identify the causal effect of BMI on inpatient hospital costs. Using data on over 300,000 individuals, the effect size per person per marginal unit of BMI per year varied according to specification, including £21.22 (95% confidence interval (CI): £14.35-£28.07) for conventional inverse variance weighted models to £18.85 (95% CI: £9.05-£28.65) for penalized weighted median models. Effect sizes from Mendelian Randomization models were larger in most cases than non-instrumental variable …