Thursday, November 22, 2012

Policy measures that could arrest rising health care costs from expanding waistlines.

How often do you read the labels on food you buy? It is a good thing to regularly do so. We tend to trust familiar brands, or end up buying food with too much calories or even rotten food. Talking about buying something that is bad for the health, rising obesity rates is a global problem. Expanding waistlines mean rising health-care costs for diabetes, heart disease and some types of cancers. What would you do when health-care costs are beyond your income? Not pretty much, except hope for government’s protection.

One of government’s role is to stem the tide of negative externalities such as rising obesity rates causing a problem for health-care delivery. Nola Ries, a University of Alberta researcher, has published several articles on how the government can help on controlling health-care costs due to rising obesity rates by taking action at all levels of the market: at the producers, the consumers, the government sector and educators.

Obesity is not the only guilty party.

As much as we all desire low cost healthcare, rising obesity rates is not the only cause of the problem. In an online article, a health care policy expert, David Hogberg, Ph.D, has argued that putting all Americans under Medicare, or Medicare for All, would not solve her problem of rising health care costs. Especially for Medicare recipients, Amy S. Kelly of the Mount Sinai School of Medicine, in another article, made it clear that the amount of spending for out-of-pocket health care expenses are rising and vary with the patient’s illness. Patients who require special arrangements, like dementia or Alzheimer’s disease, account for a size-able difference in the spending patterns. According to Kelly, these out-of-pocket spending would surprise a lot of people if they had a look into available data.

Personal care products from C.O. Bigelow.
Whatever the size of the problem, proactive solutions have to start from somewhere. Ries defined her prescription as a multi-layered approach which would involve “…multiple levels -- directed at the food and beverage industry, at individuals, at those who educate and those who restrict -- must work together to be effective."

The Government will surely pick one from all these policy measures.

Policy measures that would involve the food and beverage industry include the possibility of zoning restrictions on new fast-food outlet locations. Maybe make junk food and high calorie food rarer in areas more prone to obesity so that it would be more expensive to reach out for one. She also advised on mandatory menu labeling. Menu labeling enables you as the consumer to make better food choices, is less coercive than taxation and outright bans, and furthermore, would help Americans understand the rationale for policy measures.

How about a junk food tax? This would increase the price of junk food, especially sugar sweetened beverages, and discourage consumption of these “sin” products by the younger and poorer sectors of the economy. This is not the first time a “sin tax” is being placed on consumables. Sin taxes exist on alcohol and tobacco in many parts of the world; is particularly much higher in France and Romania. The tax would also provide a revenue stream to help combat the problem in other levels. Professors Helen Jensen and John Beghin at the ISU do agree with her, but disagree on what stage of the production process the sin tax should be placed. A sin tax, they state, applied to sweetened goods on store shelves is not the most efficient, effective method of lowering caloric intake from sweet food and would be more disruptive to consumers than necessary. The goal is to reduce caloric consumption and the target, they believe, should be taxing the inputs rather than the finished products. These would allow food processors to reduce the amount of sweeteners they put into their products, will tend towards using more of the lesser-taxed artificial sweeteners and less of the higher-taxed sweeteners that are heavy in sugary products.

portions at margie’s diner. Credit:, Emdot.

Taxing sweet food at the store shelves would hurt the poor most, and maybe lose its impact, although the research does not make any claim about lowering obesity. The rising obesity rate has many factors and the amount of calories consumed is only one, the economists argue.

How about these? Would you be happy if the government gave you a $1 coupon every time you made a choice for healthy food as against junk? I really do not understand the economics of making that happen, but Ries believes it can also help combat rising health-care costs and declining fitness levels. She wants people to live happier, healthier and more active lifestyles. Fitness tax credits though are short term measures. "Instead of spending more money on educational initiatives to tell people what they already know -- like eat your greens and get some exercise -- I suggest it's better to focus on targeted programs that help people make and sustain behavior change."

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The government would surely take action, but what steps it would follow is left to policy makers. While they are at it, I have to remind you once again: eat healthy, get much exercise, stay off too much sweets and furthermore, make someone in the planet happy by donating to causes. I wish you all a happy healthier working week.

Source: Legislated to Health?

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