Changing the trajectory of unhealthy eating habits

Dec. 27, 2019 / By Private: Katie Christensen

“About half of all American adults—117 million individuals—have one or more preventable chronic diseases, many of which are related to poor quality eating patterns and physical inactivity.”

Wait…half? 

Admittedly a libertarian by nature, the practical reality is that there are social goods that we want to maximize as a society. Population health is one such thing, but we must keep in mind that the individual makes decisions that maximize their own individual satisfaction, NOT the satisfaction of the broader population. I have the right to eat and enjoy my potato chips and ice cream and I accept that it is not always in my best interest, depending on the amount of course.

But the thing is, it doesn’t just hurt me…as a social good, it is subject to the economic principle of externalities:

“a cost or benefit not transmitted through prices that is incurred by a party who did not agree to the action causing the cost or benefit.”

Research and development is a standard example of a positive externality, air pollution of a negative externality. Now consider the challenge of dealing with obesity, a result of our eating habits which impacts population health. Obesity leads to increasing healthcare premiums and more care for a population which is increasingly developing chronic conditions.

We have setup safety nets for retirement, we tax tobacco to influence behavior, and yet we are living in an environment which encourages unhealthy eating habits and food choices. 

This is where the libertarian argument falls apart, because it is not just about ruining my own health.

Where can we start?

  1. Subsidized food. The National Institute of Health found some evidence supporting this policy through a study performed nearly 10 years ago (“Food Prices and Obesity: Evidence and Policy Implications for Taxes and Subsidies“). We have historically had a system which encourages food generation (i.e. corn production), both in the interest of trade as well as consumption. The idea of government incentives to generate food is a long-standing policy. With that in mind, I suggest we begin the process of encouraging the production of more healthy alternatives, for example, subsidizing the growing of fruits and vegetables.
  2. Changing culture. Let’s remember that smoking advertisements weren’t always banned. It is only in recent years that smoking campaigns targeted toward teenagers have been thwarted. The idea of using media (from the private and public sector) to direct social behavior already has precedence. Expansion of public transportation as an alternative to cars, rewarding exercise  (perhaps with a credit on your taxes?) as well as promoting alternatives to high-sugar treats at the office, at celebratory events, etc.
  3. Level the playing field on cost. Healthy food choices may cost an additional $1.50/day/person. We tax cigarettes highly and the rate of smoking has gone down. This same idea could prove effective at lowering the rate of junk food consumption.

The convenience store would sell the granola bar more quickly if their margins were higher, and people would buy the granola bar if there was an economic incentive. The granola and fruit selection at the convenience store is often $3-5 compared to $1.50 for a candy bar.

Food selection is subject to price elasticity and currently we are incentivizing poor choices. 

It is sort of like offering someone $50 NOT to go to the doctor. That is an example of incentivizing a choice counter to maintaining good health and no one thinks this is a smart idea, right? In fact, in the U.S. we’ve now done the opposite. To encourage a strong relationship with your primary care physician (PCP), health plans now offer zero-deductible well visits.

So, the question is…

When will we apply this lesson to food?  What is the tipping point that will force a change in our policy?

Katie Christensen is a healthcare consulting manager within the Population and Payment Solutions group of 3M Health Information Systems. 

More references:

https://www.econlib.org/library/Topics/College/marketfailures.html

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2115533

https://fortune.com/2018/02/20/meat-tax-climate-change-health-us/

https://truthinitiative.org/research-resources/tobacco-prevention-efforts/importance-tobacco-taxes

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2879182/

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