Ensuring a Change for the Better

Taxing “Globesity” To Save Our Children

Cristina Falcão
Contributor: Cristina Falcão
Posted: 03/23/2012

In spite of all the scientific and technology advances, the 21st century generation may be the first generation to not outlive their parents.

Obesity has reached epidemic proportions globally, with more than 1 billion adults overweight - at least 300 million of them clinically obese - and is a major contributor to the global burden of chronic disease and disability. Often coexisting, paradoxically, with under-nutrition, obesity is a complex condition, with serious social and psychological dimensions, affecting virtually all ages and socioeconomic groups.

The rising epidemic reflects the profound changes in society and in behavioral patterns of communities over recent decades.

Index: Obesity Epidemic, Obesity in the World, Obesity Costs, Measures and Treatments, the Real Novelty, the Pharma Industry, Conclusion

Obesity Epidemic

Obesity, defined by the World Health Organization as a body mass index of more than 30, is estimated to be responsible for between 1 and 3 percent of total health spending in most countries - and for between 5 and 10 % in the United States - and costs will rise rapidly in coming years as obesity related diseases set in.

Obesity in the World

Worldwide, around 1, 5 billion adults are overweight and a further 0, 5 billion are obese, with 170 million children classified as overweight or obese.

The prevalence of obesity today varies nearly tenfold among OECD countries, from a low of 4% in Japan and Korea, to 30% or more in the United States and Mexico.

In more than half of the OECD countries, the majority of the population is now overweight or obese. OECD projections suggest that more than two out of three people will be overweight or obese in some OECD countries by 2020.

In U.S., 35% of the adult population and 17% of children are obese, according to data gathered by the federal Centers for Disease Control and Prevention.

According to the world's leading medical journal, Great Britain's Lancet, by the year 2030, half of all Americans will be obese.

Obesity Costs

Obesity is a major risk factor for the development of type 2 diabetes, asthma, hypertension, stroke, coronary artery disease, cancer and cancer-related mortality, liver and gallbladder diseases, sleep apnea, osteoarthritis and gynecological complications.

The effects of the obesity epidemic are immense:  taxpayers, businesses, communities, and individuals spend hundreds of billions of dollars each year due to obesity.

Obesity-related health problems cost the United States USD 168 billion every year, amounting to 17% of all medical bills, according to a study conducted by researchers from Cornell and Lehigh Universities and released by the National Bureau of Economic Research.

The indirect costs of obesity for every country affected reflect the cost of mortality, morbidity, incapacity, and unemployment.

Measures and Treatments
- Bariatric Surgery, Employers Actions, Government Decisions

Bariatric Surgery is No Easy Answer to Obesity

Even though surgical methods are becoming more and more successful for the reduction of severe obesity, it would be misleading to present surgery as an easy option. To begin with, its success depends entirely on patient compliance with post-operative guidelines. If patient compliance fails, they tend to regain most of their weight loss and may end up in a worse condition than before.

Bariatric surgery is not for everyone; it can only treat a tiny percentage of the population who are severely obese; furthermore, there is not enough long term feedback on the success of these operations.

Employers Actions:

Employers have a big stake in getting their workforce to lose weight and reduce the enormous costs in medical claims and lost productivity linked to obesity. Recent studies have shown an impressive return on investment spent on prevention and wellness programs.

Government Decisions:

Chicago’s Mayor Rahm Emanuel initiated in September 2011 a new public employee wellness program to cut in half the USD 500 million-a-year healthcare bill. The program is mandatory for nearly all of the city's unions and its members, including even those members that already abide by their own personal wellness programs; individuals that do not comply with it, will have added fees on their health insurance premiums.

Governments all over have started health programs to stop the growing rates of obesity, at least to treat the youngest generation.

Health promotion efforts were intensified, particularly through local initiatives and further measures at the school level (e.g. in France, Spain, Italy, Mexico). Coordinated national programs were launched in countries like United States (Let’s Move), United Kingdom (Change4Life), Switzerland (Actionsanté), and others.

“Let’s Move!” is a comprehensive initiative, launched by the First Lady, dedicated to solving the problem of obesity within a generation, so that children born today will grow up healthier.

The Real Novelty

The real novelty of the last three years has been a strong and increasing interest in the use of fiscal measures to limit the consumption of foods high in fat, sugar, and salt.

Several OECD countries introduced taxes on unhealthy foods and beverages in 2011 as part of their efforts to counter obesity. Taxes, along with other measures, can improve health by changing eating habits.

Taxation of unhealthy foods or beverages is being discussed in a number of other countries. Belgium, Ireland, Romania, and the United Kingdom are among the countries actively considering a levy on unhealthy food and/or drinks. Debates are taking place in the United States and Italy.

The Lancet suggests that the United States Government should somehow begin a top down approach to regulating and taxing unhealthy foods in order to reduce obesity, all while reducing the cost of healthy foods and making them more accessible.

The Pharma Industry

For the Pharma Industry the Holy Grail is the promise of a blockbuster drug to fight globesity without side effects; however, as bariatric surgery is not the answer, new drugs for obesity are far from being successful, as payers do not perceive drug therapy as effective.

Conclusion

Obesity management continues to be a major challenge to health plans as the prevalence continues to rise. It is unlikely that there will be a pill that "cures" obesity.

Will “Fat taxes”affect consumption, and eventually obesity?

The impact of imposing taxes on the consumption of certain foods depends on the responsiveness of consumers to price changes, i.e. price elasticity.

Caveat emptor: it is difficult to predict how consumers will react to price changes caused by taxation.

Will obesity treatment ever be cost effective? 

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Cristina Falcão
Contributor: Cristina Falcão
Posted: 03/23/2012

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