Hampton Bay Lighting HD

Hampton Bay Lighting HD

Tag: Spending

Sugar Deadly: Linked To $1 Trillion In U.S. Healthcare Spending

 It’s not new, but last month’s Credit Suisse report on sugar is both detailed and provocative. The sobering assessment is worth a second look – especially during this week’s binge festival of candy – Halloween. Sugar deadly for teens.

While the focus of the report is largely financial, there’s something for everyone – including healthcare professionals, researchers, politicians and really all of us as consumers. There are many highlights, but this one is a good summary of the sheer size and scope of excess sugar consumption on the U.S. healthcare system:

“So 30% – 40% of healthcare expenditures in the USA go to help address issues that are closely tied to the excess consumption of sugar.” Credit Suisse Report –

At this level, the math clearly lacks scientific precision, but it does emphasize the huge burden associated with a single and truly ubiquitous substance – sugar. Assuming a U.S. National Healthcare Expenditure of $3 trillion per year – and further assuming we simply take 33% (the lower end of the Credit Suisse range), the calculation is easy. Basically, the U.S. healthcare system spends about $1 trillion per year (and possibly more) fighting the effects of excess sugar consumption.

The report references a constellation of health effects around that excessive consumption – including coronary heart disease, type 2 diabetes and metabolic syndrome. Other known risks – mostly around being overweight and/or obese – include osteoarthritis, high blood pressure, high cholesterol, gout, non-alcoholic fatty liver disease and cancer. A broader summary list of findings in the 40 page report include these:

 The 2012 Global Burden of Disease report highlighted obesity as a more significant health crisis globally than hunger and/or malnourishment.

 More than half a billion adults (over age 20) worldwide are obese.

 The world average daily intake of sugar and high-fructose corn syrup (HFCS) is now 70 grams (17 teaspoons).

 A scientific statement issued by the American Heart Association in 2009 recommends that women take no more than six teaspoons of added sugar a day and men no more than nine.

 A single, 12 ounce can of regular soda has about 8 teaspoons of sugar.

There’s a bonanza of charts and graphs too, but perhaps the single most compelling one is this one for global soda consumption:

According to the study, sugar itself accounts for over 80% of the global sweetener market. With a single commodity of this size, it’s no surprise that the lobbying power of the sugar industry is often compared to another global commodity – oil. “There are 15 million cane growers in China and 350,000 beet growers in Europe.” Another metric is the sheer volume of sugar (all its forms) in the typical U.S. daily diet – 38% – and Credit Suisse estimates that 43% of that is from a single product category – sweetened beverages.

While the toxic health effects of sugar are generally well known, there is mounting evidence to suggest that sugar has addictive properties as well.

“Sugar may not pose the clear addictive characteristics of illicit drugs such as cocaine and heroin, but to us it does meet the criteria for being a potentially addictive substance.” Credit Suisse

As a sub-category of sweetened beverages, the “energy” drink market delivers a compounding effect with another central nervous system stimulant – caffeine. The combination of sugar and caffeine (often served in small sizes to belie their potency) is in many ways a perfectly legal, over-the-counter, high calorie cocktail. Like any rebellious product, it’s targeted directly at the younger – mostly teenage demographic.

The story behind Monster’s high octane success was highlighted last month in a provocative piece by Simons Chase where he compared beverage “innovations” to financial “innovations” like derivatives.

“Food undergoes the equivalent of a leveraged recapitalization designed to suit the financial goals of its creator.  Consumption of junk food (for example a Twinkie or a sugary drink) is akin to a financial exchange where short-term gains are privatized and long-term costs are socialized in the form of horrific health outcomes.  The metabolic donkeys – consumers – pay relatively little money and turn a blind eye to the health consequences of their food choices – instead hoisting the fantastic profits of companies like Monster and opting for a shortened, diseased life.”Simons Chase – 2 Perspectives On Food Innovation: Sodastream vs. Monster Beverage MNST +1.09% (here)

Just how big are the profits we’re delivering as metabolic donkeys? Here’s a chart comparing some key metrics of Monster’s phenomenal success to another innovation juggernaut – Apple AAPL +1.64%:

Chase goes even further.

The truth is that Monster produces nothing – literally.  All of its beverage production is outsourced to third-party co-packers and suppliers.  In fact, Monster even claims not to own the formulas used in the production of its beverages.  According to company filings,  Monster says, “we do not have possession of the list of flavor ingredients or flavor formulas used in the production of our products.” It’s core value appears to be a vast collection of trademarks (3,700 at last count) and an army of part-time marketing employees.

In a marketing sense – we’ve traded our chiseled-jaw Marlboro Man (in this image a tattooed, shotgun-loading hunter) with a green-eyed, animated vixen. Unfortunately, just like cigarettes, the consequences are often lethal. As reported by Today Health (here) – the official cause of death in the case of one 14-year Maryland teenager last year was “cardiac arrhythmia due to caffeine toxicity.” The girl did have a known heart ailment, but according to the U.S. National Library of Medicine (here) “most of the time, mitral valve prolapse is harmless and does not cause symptoms.” The day before her death she had consumed two 24 ounce cans of Monster’s Energy drink.

A 2011 report (here) by the Drug Abuse and Warning Network (published bySAMHSA) suggests a non-trivial spike in ED visits tied to energy drink consumption.

If “patient engagement is the blockbuster drug of the century” (a phrase coined by Leonard Kish here), we may need a new accountability for companies that simply engage us as ”metabolic donkeys” for windfall profits. Unlike cigarettes, there are relatively easy ways to ”innovate” around food and beverage products that deliver more health and less disease. Before we demand healthier food and beverage choices from consumers (and penalize behavior that is less so), we need healthier (and more affordable) options to replace ones that simply promote “a shortened diseased life.” The financial mechanics of how those are likely to arrive on a global scale is another reason to read the Credit Suisse report.

 As originally published on Forbes.

Obesity’s Affect on Healthcare, Corporate Spending, Education and Homeland Security

The obesity epidemic the U.S. is facing should be one of the primary concerns of the future president of the United States.

“This issue that is plaguing our nation should not be delegated to the second, third, or fourth in charge, but should actively involve the president themselves. Some presidential candidates are saying their spouses would be interested in promoting the health of this nation, insinuating that fighting the obesity epidemic would not be their concern” Samir Becic said. I’m strongly opposing this notion and this is my reasoning why:

“We are one of the most obese countries in the world, and statistics are showing that by 2020 over 75 percent of Americans will be overweight or obese. We must change this and to do this we need more than just policy and jargon – we need a leader, a president who knows the real issues concerning the health of America”.- Samir Becic

Obesity Rates Spike in America

An analysis conducted by the National Heart Forum found that by 2030, 1 in 2 people will be obese – not merely overweight, but obese. Considering 60 to 70 percent of all chronic illnesses can be linked to obesity, this is more than just a national problem. According to Trust for America’s Health, twenty years ago, no state had an obesity rate above 15 percent. Today, there are 41 states with an obesity rating above 25 percent. And since 1980, the rate of obesity in children and adolescents has nearly tripled.

Read: Statistics On Obesity’s Affect on America

Obesity a Big Factor in Healthcare Costs

Healthcare and healthcare reform are big issues in politics. The magic solution to these issues, however, is not rooted in subsidies, single-payer systems or the actual affordability of healthcare unique to every American – it’s in the individual health of Americans themselves. Ideally, the healthier you are or aim to be, the less you have to worry about chronic illnesses and injury, and by extension, the less you have to worry about healthcare costs.

Given the state of American health and the economy, obesity has taken more than a few dollars from Americans. Regarding health care costs, for every dollar spent on healthcare, $0.95 is spent on treatment; the other $0.05 is spent on preventative care. While that may not sound like much, in total, obesity-related medical treatment can cost up to $210 billion a year. Researchers estimate that if obesity trends continue, obesity-related medical costs could rise by up to $66 billion each year.  

Comparatively, obese people spend 42 percent more on healthcare costs than those of healthy-weight. In fine numbers, per capita medical spending is about $2,741 higher for the obese than healthy-weight individuals.

Read: Top 10 Health Tips for Americans

Corporations Spend More Due to Obesity-Related Medical Concerns

Along with monetary concerns, obesity has played an active role in decreasing American employee productivity, discipline, focus, energy and even creativity. Corporations who provide benefits to their employees  with healthcare take a big hit as well.

According to the U.S. Department of Labor, the current annual impact of poor health costs Americans about $1.8 trillion. This number is a sum of costs concerning obesity-related job absenteeism ($4.3 billion annually) and various forms of medical care among other things, which is almost no surprise given than 80 percent of Americans work in jobs that require little or no physical activity.

All is not lost when it comes to healthcare reform, however. Statistics show for every dollar spent on wellness initiatives, corporations can save as high as $10 in costs amounting to obesity-related medical concerns in the private sector. In fact, medical costs fall by about $3.27 for every dollar spent on wellness programs – great news for the employee.

Perks go to the employer as well, as companies with wellness programs in place have an average 28 percent reduced sick leave and spend 26 percent less on healthcare costs. Additionally, the money corporations save as a result of implementing wellness programs could be used for improving the quality of the workplace, adding more employee benefits, or even increasing employee wages.

Childhood Obesity a Contributing Factor in Inhibiting Education Success

For children, obesity can play a vital role in that child’s academic success. Studies found that obese students – and especially girls – tend to have lower test scores than their slimmer peers, are more likely to be held back a grade and are less likely to go on to college.

The latest such study, published in the journal Child Development, followed 6,250 children from kindergarten through fifth grade and found that, on average, those who were obese scored lower on math tests than non-obese children.

Additionally, studies found that physically fit children had a 2.4 times greater chance of passing math tests and a 2.2 times greater chance of passing reading tests compared with aerobically unfit children.

According to a study in 2010 by the University of Pittsburgh, overweight people had four percent less brain tissue than people of normal weight, and obese people had eight percent less brain tissue than people of normal weight. These results are serious for children who are obese as a lack of brain tissue can result in a lower IQ, decreased attention span, impairment of memory functions and poor coordination.

In terms of costs, of the approximate $210 billion Americans spend on medical care due to obesity-related illnesses, childhood obesity alone is responsible for $14.1 billion in direct costs.

Annually, the average total health expenses for a child treated for obesity under Medicaid is $6,730, while the average health cost for all children covered by Medicaid is only $2,446.

Homeland Security at Risk Due to Rise in Obesity

While the United States continues to lead the world in military spending, the U.S. can’t deny how the rise in obesity has become a significant concern for national security. In fact, a 2010 report by mission readiness found that obesity is the leading medical reason why applicants fail to qualify for military serve – and no wonder, with 27 percent of Americans ages 17-24 – that is, 9 million young adults – cannot serve due to their weight.  

The last time military leaders were active in the health young adults and its effect on the future of the U.S. military was during World War II, following the Great Depression.

Needless to say, this is a problem. Obesity does not affect us merely the obese with medical problems, but the entire country as well. We would do well to take care of this epidemic as we would any other – to inspire many to partake in regular physical activity and be conscious of their nutrition intake. Little steps we can take like drinking more water or going for a walk 20 around the neighborhood 20 minutes a day are significant lifestyle changes that can lead to a healthier, more enjoyable life.

Read: Why is America So Fat?