Classification
It is no great secret, these days, that the Body Mass Index (BMI) is an inappropriate indicator of health. BMI fails to take muscle mass, age, proportion, and culture into consideration and makes health a "one size fits all" proposal. Even the Center for Disease Control (CDC) warns against using the simplistic tool for categorizing yourself (for individuals) or patients (for health care professionals). However, faced with short appointment windows and lack of cost-effective alternative measures, many doctors still use the BMI for classifying weight issues.
The most recent alternative, Waist-to-Hip ratio (WHR) seems to generally be a better measurement tool. It takes shape into consideration as a higher concentration of mass around the middle of the body is more positively correlated with other health risks. However, this method still has its drawbacks in that it does not take into account lean body mass, fat mass, or cultural variation.
Should health be measured by numbers at all? The jury is still out.

Resources
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Why BMI Isn't the Best Measure for Weight (or Health) - Alexandra Sifferlin (Time)
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Body Mass Index: a big fat lie - Patrick Basham and John Luik (Sp!ked)
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Defining overweight and obesity: what are the issues? - Van Hubbard (American Society for Clinical Nutrition)
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Body Mass Index: Considerations for Practitioners - Centers for Disease Control and Prevention (CDC)
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Comparison of the Classification of Obesity by BMI vs. Dual-energy X-ray Absorptiometry in the Newfoundland Population - Aaron Kennedy, Jennifer Shea, Guang Sun
Image courtesy of: http://health.howstuffworks.com/wellness/diet-fitness/weight-loss/bmi3.htm