President Barack Obama has pledged to reform the nation’s health care system in an effort to make it more affordable and efficient for businesses and consumers alike. The effort almost certainly will affect food processors if for no other reason than it will impact the costs businesses incur in providing health coverage to employees. Way beyond that, though, is how such program changes may provide a significant opportunity to the food and beverage industry.
That the nation’s health care system needs some sort of reform is undeniable. In 2008, the United States spent 17% of its gross domestic product on health care. That amount compares unfavorably with the health care spending of other industrialized nations, including Switzerland, Germany, Canada and France.
The debate in Washington will focus on reforming the private health insurance industry, providing subsidies to help individuals acquire health insurance, taking advantage of the benefits afforded by health information technology and reforming payment to providers to spur efficiencies. But there is no better way to reduce health care costs than through prevention efforts, and this is where food processors ought to position themselves centrally as well as successfully.
The Centers for Disease Control and Prevention’s National Center for Chronic Disease Prevention and Health Promotion calculates the number of obese people in the United States to be approximately 72 million -- one-third of the nation’s adult population -- and it estimates obesity-related costs to be $117 billion annually. A study conducted by the RAND Corporation in 2004 estimated the lifetime medical costs related to diabetes, heart disease, high cholesterol, hypertension, and stroke among the obese to be $10,000 higher than among the non-obese. Among the overweight, the researchers estimated the lifetime medical costs may be reduced by $2,200 to $5,300 following a 10% reduction in body weight.
Unlike many other health-related issues, obesity and the chronic conditions associated with it are preventable. Yet, public health professionals increasingly are frustrated by the rising number of consumers diagnosed as obese or morbidly obese.
At a time when value has become a central trend in consumer food purchasing patterns it makes sense for food processors to promote the value of their products in a healthy diet. Calculating the long-term costs associated with a diagnosis of type 2 diabetes or chronic heart disease, for example, should starkly deliver the message that there are significant cost savings associated with a healthy diet that are not registered at the checkout counter.
Food processors have done an admirable job of bringing a wide variety of healthy foods to market in an effort to capitalize on the health and wellness trend. Yet, third parties such as Hannaford Brothers through its Guiding Stars nutrition scoring program, NuVal L.L.C. and others are trying to position themselves as the arbiters of what is healthy and what is less than healthy. By selling the value of prevention and identifying the building blocks of a healthy diet to consumers, food processors may gain additional credibility.
In addition, focusing on prevention should provide additional benefits to food manufacturers. As public health professionals remain frustrated with efforts to reduce and prevent the incidence of obesity, they are turning to governments at the local, state and federal level to implement programs aimed at prevention. Policies passed by cities and states to include calorie counts on food service menus are an example. The trouble for the food industry is potentially inconsistent policies that do more to increase costs than enhance prevention.
Any effort to reform the nation’s health care system will be a long, difficult task given the number of entrenched interests involved. Food marketers would serve themselves well to take advantage of these efforts by highlighting the benefits of prevention and the roles their products play in reducing health care costs.
This article can also be found in the digital edition of Food Business News, April 28, 2009, starting on Page 11. Click