Soda & Diabetes, How Much Does That Can of Soda Really Cost? Part II
Filed under: Cost Control, Proposed Legislation, preventive care
Photo by Michael Reeve
Diabetes. In a brief but interesting interview on NPR’s Marketplace, Kaiser Permanente CEO George Halvorson had this to say:
HALVORSEN: …. Right now, when you look at diabetes, 32 percent of the cost of Medicare is diabetes. It’s the number one cost of blindness, it’s the number one cause of amputations, it’s the number one cause of kidney failures. And when you look at the care delivery patterns in America, we only get care right for diabetics 8 percent of the time. If we got care right for diabetics 80 percent of the time, we’d cut the number of kidney failures in half.
A few days ago we began to ask, “How Much Does that Can of Soda Really Cost?” We considered cost in terms of external or social cost (not price for the actual can of soda, but that which results incidental to the primary transaction and may be borne by other than the buyer or seller), and noted that a recent study shows that obesity plays a prominent role in health care expenditures, and that many believe that soda and other sugary soft drinks play a prominent role in obesity. We noted that the Wall St. Journal reported that
Overall obesity-related health spending reaches $147 billion, double what it was nearly a decade ago, says the study published Monday by the journal Health Affairs.
Obesity-related conditions now account for 9.1% of all medical spending, up from 6.5% in 1998, the study concluded.
Obesity is a key factor in Type 2 diabetes. And 32% of Medicare costs are attributable to diabetes. It is no stretch to say that if we have a Medicare cost problem in this country (we do), what we really have is a diabetes problem (and, considering Halvorsen’s “we only get it right 8% of the time” figure, a diabetes treatment problem as well).
But first things first. 32% is a mere scooch (yes, that’s the technical term) away from ONE THIRD. That’s an enormous number. If one were to relate this portion of Medicare expense to houesehold expenditures, it occupies a place similar to a mortgage– but an expensive mortgage in a house that no one wants to live in.
In addition, according to the American Diabetes Association (ADA)
The total annual economic cost of diabetes in 2007 was estimated to be $174 billion. Medical expenditures totaled $116 billion and were comprised of $27 billion for diabetes care, $58 billion for chronic diabetes-related complications, and $31 billion for excess general medical costs. Indirect costs resulting from increased absenteeism, reduced productivity, disease-related unemployment disability, and loss of productive capacity due to early mortality totaled $58 billion. This is an increase of $42 billion since 2002. This 32% increase means the dollar amount has risen over $8 billion more each year.
Importantly, the ADA believes those numbers may be understated:
The actual national burden of diabetes likely exceeds the $174 billion estimate because it omits the social cost of intangibles such as pain and suffering, care provided by non-paid caregivers, excess medical costs associated with undiagnosed diabetes, and diabetes-attributed costs for health care expenditures categories not studied.
I do not mean to attribute the entirety of the costs of obesity and diabetes to that can of soda in the fridge you were thinking about drinking, but there does seem to be a connection worth considering.
A Time Magazine article from a few years back, “Diabetes And Soda: Drawing A Connection,” put it thus:
Want to stay trim and lower your risk of Type 2 diabetes? Try cutting out the soft drinks. A study published in the Journal of the American Medical Association found that women who regularly drank sugar-sweetened soda or fruit punch gained significantly more weight and had a greater risk of developing Type 2 diabetes than women who rarely indulged in high-sugar drinks. (Drinking diet soda had no significant effect.[1]) The frequent soda sippers, who downed more than one sugary beverage a day, also tended to exercise less, smoke more, weigh more and eat more, but when researchers adjusted for such unhealthy factors, these women still showed a 40% greater risk for developing diabetes than did women who had fewer than one sugar-sweetened drink a month.
Another recent study published in the Archives of Pediatrics and Adolescent Medicine showed that
“Overweight Latino children who cut sugar or added fiber to their daily diets — even in small amounts — managed to lower certain risk factors for type 2 diabetes, researchers said.”
The researchers concluded that
“Modest changes in sugar and fiber consumption equivalent to omitting one can of soda or adding a half of a cup of beans daily could lead to substantial improvements in adiposity and metabolic parameters.”
This quote from the study used in the Time Magazine article (and published in JAMA) is also worth noting:
In conclusion, our findings suggest that frequent consumption of sugar-sweetened beverages may be associated with larger weight gain and increased risk of type 2 diabetes, possibly by providing excessive calories and large amounts of rapidly absorbable sugars. Public health strategies to prevent obesity and type 2 diabetes should focus on reducing sugar-sweetened beverage consumption.” (JAMA. 2004; 292:927-934.)
Considering the circumstances, and the expense of obesity and diabetes, it does not seem outlandish to tax soda and sugary soft drinks at the rate of 10 cents per 12 ounces. We sketched out the math a few days ago:
10 cents per 12 oz. can = .8333 cents per ounce. If the average consumption is 1.4 cans per day, or 16.8 oz, we’re talking about an average tax of roughly 14 cents per day. You simply cannot buy anything with 14 cents– but in the aggregate it can get you a little closer to funding universal healthcare. And perhaps, if the spectre of that 14 cents did cause some to consume slightly less soda, perhaps we as a country would not be the worse for it.
A tax of 10 cents per can of soda is expected to generate $140 billion in revenue over ten years. That does not take into account the economic impact of any of the health benefits that may be associated with a decrease in consumption. Having said that, the more medical expense numbers one examines, from an external or social cost perspective, that can of soda is beginning to seem rather expensive– and the 10 cent tax relatively cheap.
The plan to tax soda and sugary soft drinks at such a rate is said to have met with staunch opposition by the soft drink lobby. As said the other day, this is understandable, they have an interest to protect. But so, I imagine, do we. As Health Care reform is being more than decimated by Blue Dog Democrats and so called “Centrists” in the name of so called savings (excellent post by Prof. Nathan Cortez: “The Less You Change, the More it Costs“), it would behoove us to begin to back measures to fund what we need: thorough reform, universal coverage and a public option worthy of the name.
UPDATE: Professor Frank Pasquale on the latest in beverage tax utilitarian calculus
[1] Since then, some studies have shown associations between the consumption of diet soft drinks and risk of Type 2 diabetes.
Posts from Health Reform Watch have been cited by media sources throughout the country, including Kaiser Health News, The Health Care Blog, NPR's Planet Money Blog, Duke Univ. Med. Center News, American Health Line Alerts, BusinessWeek.com, Concurring Opinions, Balkinization, The New England Journal of Medicine, Harvard's Nieman Foundation for Journalism, The New York Times, Washington Post, L.A. Times, Las Vegas Sun, Maggie Mahar, Ezra Klein, Tom Geoghegan, and the official homepage of the Office of the Democratic Majority Leader of the House of Representatives, Steny Hoyer.
Whether they admit it or not we really can’t resist the taste of sodas especially in a very hot day, it’s taste was so refreshing so we crave more of it but its very alarming to know that its the no.1 cause of obesity that leads to type 2 diabetes.
Maybe moderate drinking will be a good idea to avoid its harmful effect in our health and besides nowadays there are sodas in diet and zero sugar that reduces the possibility of having diabetes.
What a biased article. In the first place, the statistics used to flame anti obesity hysteria come from weight loss interests who want the government to intervene to help them sell more products. They are as unreliable as testimonials from used car sales men. Anyone can do studies and manipulate statistics for their own benefit.
Secondly, lets call this new junk food tax for what it is, another way for politicians to rip off the public. What are they going to say, well we have bleed you dry because of the follies of our banker masters, now we want you to cough up even more? Of course not, they are going to try and disguise it as for the public’s own good. With the added benefit of having people so distracted by their scales, so consumed with guilt over not meeting unrealistic weight standards, they won’t have time to organize. And they will scapegoat their fat neighbors instead of the power-elite.
If we are really concerned with reducing diabetes, tax Weight Watchers. Yo-yo dieting, which all commercial weight loss programs contribute to, increases diabetes and shortens life. And look into chemicals in plastic which produce diabetic obese mice on the same diet as controls. Finally research MSG further, which is in everything, including those “healthy” diet foods.
As a sociologist who researches fat stigma, as well as an extremely healthy proud fat women myself, I have to say shame on you for such a sloppy article. It was pure propaganda!
The obesity statistics come from this report, http://content.healthaffairs.org/cgi/content/short/hlthaff.28.5.w822, you’ll notice that its authors come from the CDC and the Public Health Economics Program at RTI International in Research Triangle Park, North Carolina. http://www.ahrq.gov/clinic/epc/rti-unc.htm. The University of North Carolina association of is well worth noting.
I took the time to peruse your webpage (http://www.bigfatfacts.com/) (worth a look for anyone reading this), your blog (http://www.bigfatblog.com/) (also worth a look) and some of its links (the Atlantic interview with Paul Campos—and, as you say, especially the comments— are well worth reading http://meganmcardle.theatlantic.com/archives/2009/07/americas_moral_panic_over_obes.php.
As for the need to eschew a moral stigma, I happen to agree with you, applaud your efforts, and have written on the subject as it regards an overweening congressional initiative to empower employers to sanction workers for a failure to address health issues such as weight and cholesterol readings, etc…. http://www.healthreformwatch.com/2009/05/11/harkin-baucus-considering-enabling-employers-to-punish-employees-for-failure-to-address-health-issues/
I am no stranger to John Stuart Mill, and to my knowledge no one has ever referred to me as svelte (in my mid-thirties I played football as an interior defensive lineman on a semi-pro team, which should give you some idea). But there is, I believe, an important distinction between imposing moral stigma and punishments in the workplace tied to weight and cholesterol and imposing a modest tax on soda to help fund universal healthcare, using monies attributable as externalities to that which is being taxed. The one is punishment, the other is merely asking one to pay for their pleasure.
Most importantly, as an externality, is the enormous expense of Type 2 Diabetes. In looking at healthcare expense one simply cannot disregard ONE THIRD the cost of Medicare for diabetes. And the association of obesity and Type 2 Diabetes is pretty sound. One study I cited as an example, Sugar-Sweetened Beverages, Weight Gain, and Incidence of Type 2 Diabetes in Young and Middle-Aged Women was peer reviewed and has author affiliations as follows:
Author Affiliations: Departments of Nutrition (Drs Schulze, Stampfer, Willett, and Hu) and Epidemiology (Drs Manson, Colditz, Willett, and Hu), Harvard School of Public Health, Division of Preventive Medicine (Drs Manson and Stampfer) and Channing Laboratory (Drs Manson, Colditz, Stampfer, Willett, and Hu), Department of Medicine, Brigham and Women’s Hospital and Harvard Medical School, and Department of Medicine, Children’s Hospital (Dr Ludwig), Boston, Mass. Dr Schulze is now with the Department of Epidemiology, German Institute of Human Nutrition, Nuthetal, Germany.
Again, not particularly ascribable to “weight loss interests.” In addition, might I suggest that to tack on ten cents to a can of soda to help pay for universal healthcare seems a relatively painless way (unless you are a soft drink manufacturer or someone who consumes a truly inordinate amount of soda) to pay for something we need. Again, I understand the desire for pleasure, but do not think it untoward to ask one to pay for it. That may well amount to a bias, but it is one I am comfortable with.
I believe that all added sugar should be taxed. Those who want to avoid taxes could choose to avoid purchasing products with added sugar. And since diabetes is responsible for nearly 30% of medicare costs, added sugar should be taxed at a rate that will bring in approximately 30% of the projected health care reform costs over the next 10 years. And since heart disease is even more prevalent and more costly than diabetes, I also believe saturated fat should be taxed at a rate that will nearly cover the costs of heart disease. Hopefully, the tax would deter people from purchasing so much sugar and saturated fat. If not, at least the revenue would be there to cover the expenses of these terrible diseases.