the energy balance - milken institute€¦ · • coronary heart disease • stroke • gallbladder...

Energy balance

Source: Centers for Disease Control And Prevention (CDC).

THE ENERGY BALANCE

INTAKECalories from foods

OUTPUTCalories used during

physical activity

• Hypertension (high blood pressure)

• Osteoarthritis

• Dyslipidemia

• Type 2 diabetes

• Coronary heart disease

• Stroke

• Gallbladder disease

• Sleep apnea and respiratory problems

• Some cancers (endometrial, breast, and colon)

Health consequences ofoverweight and obesity

• Psychosocial risks

• Cardiovascular disease risks

• Other health risks (asthma, hepatic steatosis,sleep apnea and type 2 diabetes)

Consequences ofchildhood overweight

Prevalence rates of obesity U.S., 1976-2006

Source: National Health And Nutrition Examination Survey.

Healthy People 2010 Target

2005-062003-20042001-021999-20001988-941976-80

50

40

30

20

10

0

Percent

Obesity prevalence for U.S. adults By age and sex, 2005-2006

60 and over40-5920-39Total

50

40

30

20

10

0

Percent


Men

Women

2003-042001-021999-001988-941976-801971-741966-70

20

15

10

5

0

Percent

Childhood prevalence of obesity U.S., 1966-2004


6-11

2-5

12-19

Overweight and physical activity U.S., 2003-2004, ages 10-17

Source: National Survey of Children’s Health.

0.5

0.55

0.6

0.65

0.7

0.75

0.8

0.05 0.1 0.15 0.2 0.25

Overweight

Ph

ys

ica

l A

cti

vit

y

Adult obesity-attributable percentand expenditures U.S., 1998-2000

MedicaidMedicareTotal

12

10

8

6

4

80

70

60

50

40

30

20

10

Percent US$ billions

Percent (L)

Expenditures (R)

Source: Finkelstein, Fiebelkorn, and Wang, Obesity Research, 2004.

Prevalence of cardiovascular risk factorsamong overweight and obese workers 1999-2000

Metabolic syndromeType 2 diabetes

DyslipidemiaHypertension

60

50

40

30

20

10

0

Percent

NormalOverweight Obese


Prevalence and number of diabetes U.S., 1980-2005

Source: National Health Interview Survey. U.S. Bureau of the Census.

0504

0302

0100

9998

9796

9594

9392

9190

8988

8786

8584

8382

8180

6.0

5.0

4.0

3.0

2.0

16

14

12

10

8

6

4

Percent Millions

Prevalence rates (L)

Number (R)

Age-adjusted male prevalence ofdiagnosed diabetes by race U.S., 1980-2005

Source: National Health Interview Survey.

05

04

03

02

01

00

99

98

97

96

95

94

93

92

91

90

89

88

87

86

85

84

83

82

81

80

9

8

7

6

5

4

3

2

Percent

Black

White

05

04

03

02

01

00

99

98

97

96

95

94

93

92

91

90

89

88

87

86

85

84

83

82

81

80

9

8

7

6

5

4

3

2

Percent

Age-adjusted female prevalence ofdiagnosed diabetes by race U.S., 1980-2005


Black

White

Obesity (BMI > 30) As percent of U.S. population

Source: Milken Institute.

049994898479746964

30

25

20

15

10

5

0

Per 100,000 Population

Causes of mortality: diabetes 1960-2004, selected countries

Source: OECD HealthDivision.

United States

United Kingdom

Japan

International trends of obesity 1991-2004

Source: OECD Health Division.

2004200220001991

40

30

20

10

0

Percent

JapanFranceUnited KingdomUnited States

Diabetes and obesity 2003-2004, Selected countries

Source: OECD Health Division.

0

5

10

15

20

25

30

35

0.0 5.0 10.0 15.0 20.0 25.0

Causes of Mortality (Diabetes): Deaths per 100,000 Population

Obe

sity

Rat

es

U.S.

Japan

U.K.Greece

France

PolandHungary

Finland Germany

Netherlands

SpainLuxembourg

78%

65%

48%

6%

16%

31%

0%

20%

40%

60%

80%

100%

18-34 35-44 45-54 55-64 65-74 75+

Prevalence of hypertension U.S., 1999-2000

Hy

pe

rte

ns

ion

Pre

va

len

ce

Age

Source: Fields et al. Hypertension. 2004:44;398-404.

Obesity trends among U.S. adults 1991

Source: Behavioral Risk Factor Surveillance System.

No Data <10% 10%–14% 15%–19%

Obesity trends among U.S. adults 2006


State laws addressingchildhood obesity 2007

Source: Childhood Obesity Prevention Legislation, 2007, State Legislation Report.

35

30

25

20

15

10

5

0

Mandates obesity

treatment coverage (4)

Establishes state task force

(12)Mandates

BMI screening(7)

Addresses physical activity (24)

Addresses school nutrition (27)

Number of states

VIDEO SAFE

Avoidable chronic disease treatment andproductivity costs if obesity were eliminated 2008


38.234.6434.1387.4836.791.59Total

10.10.6615.04.4110.11.66Stroke

52.411.2552.478.1052.445.86Heart disease

31.012.8731.0124.2131.013.48Hypertension

36.56.0234.453.1836.513.42Diabetes

30.42.7537.992.1430.411.47 Other cancers

52.00.6552.119.3652.03.15 Prostate cancer

1.70.0061.10.511.70.08 Colon cancer

34.00.4434.015.5734.02.53 Breast cancer

31.23.8531.6127.5826.317.23Cancer

PercentDiff

MillionsPercent

DiffBillions

$Percent

DiffBillions

$Disease

CasesProductivityTreatment

Economic burden of chronic disease Introduction: Two Paths, Two Choices

1. What does chronic disease currently cost us?

2. Where is the current course taking us?

3. What costs are avoidable if we make improvements inprevention and treatment?

4. What are the impacts of chronic disease at the statelevel?

5. What is the long-term impact of reducing the diseaseburden?

6. What are the conclusions and recommendations of ourfindings?

The Human Cost: Number ReportingSeven Common Chronic Diseases U.S., 2003

2.4

10.6

13.7

19.1

30.3

36.8

49.2

- 10.0 20.0 30.0 40.0 50.0 60.0 70.0

Population Reporting Condition (Millions)

Stroke

Cancers

Diabetes

Heart Disease

Mental Disorders

Hypertension

Pulmonary Conditions

Source: Medical Expenditure Panel Survey, Milken Institute.

The Human Cost: Number of PeopleReporting Selected Cancers U.S., 2003

7.7

1.1 1.0

0.4 0.3

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

Other

Cancers

Breast

Cancer

Prostate

Cancer

Lung

Cancer

Colon

Cancer

Population Reporting Condition (Millions)


The Human Cost

Milken Institute State Chronic Disease Index

Top QuartileSecond Third Bottom Quartile

States in Top Quartile have the Lowest Rates of Seven Common Chronic Diseases


The Human CostMilken Institute State Chronic Disease Index Composite Scores


State Rank

Composite

Score State Rank

Composite

Score

Utah 1 100.00 Vermont 26 75.62

Alaska 2 96.58 Maryland 27 75.05

Colorado 3 95.29 Michigan 28 74.82

New Mexico 4 93.50 Ohio 29 74.71

Arizona 5 91.50 Oregon 30 74.48

California 6 89.83 Georgia 31 74.12

Hawaii 7 88.38 New Jersey 32 74.10

Idaho 8 87.68 North Carolina 33 74.08

Washington 9 86.43 Connecticut 34 73.28

Wyoming 10 83.13 Delaware 35 73.18

Minnesota 11 82.59 South Dakota 36 72.20

Texas 12 82.26 Louisiana 37 70.55

Nevada 13 80.80 Florida 38 70.15

North Dakota 14 80.64 South Carolina 39 68.76

Illinois 15 80.04 Massachusetts 40 68.65

Kansas 16 79.87 Alabama 41 68.59

Nebraska 17 79.61 Oklahoma 42 67.76

New Hampshire 18 79.29 Maine 43 67.60

Montana 19 79.05 Rhode Island 44 66.76

Virginia 20 77.68 Pennsylvania 45 66.37

Wisconsin 21 77.29 Mississippi 46 66.17

New York 22 77.26 Kentucky 47 65.98

Indiana 23 77.14 Arkansas 48 65.68

Iowa 24 76.91 Tennessee 49 65.31

Missouri 25 76.12 West Virginia 50 62.19

The Economic Cost: TreatmentExpenditures by Chronic Disease U.S., 2003

$27

$33

$45

$46

$48

$65

$0 $10 $20 $30 $40 $50 $60 $70

US$ Billions

Stroke

Diabetes

Hypertension


Mental Disorders

Cancers

Heart Disease

$14


The Economic Cost:Lost Productivity by Source, U.S. US$ Billions, 2003

Presenteeism

Caregiver,

$80.2

Lost

Workdays

Caregiver,

$10.8

Lost

Workdays

Individual,

$127.5

Presenteeism

Individual,

$828.2

Total Lost Productivity in 2003 = $1,046.7

Source: National Health Interview Survey, Milken Institute.

The Economic Cost:Lost Productivity by Chronic Disease U.S., 2003

$22

$94

$105

$105

$171

$271

$280

$0 $50 $100 $150 $200 $250 $300 $350

US$ Billions

Stroke


Heart Disease

Diabetes

Mental Disorders

Cancers

Hypertension

Source: National Health Interview Survey, Milken Institute.

Population Projections U.S., 65 and Over

202320182013200820031998199319881983

20

18

16

14

12

10

8

Percent

History Forecast

Male 65 and overFemale 65 and over

Source: U.S. Census Bureau.

Projection of Cases and TreatmentCosts Baseline vs. Optimistic Scenario Process

1. Develop Based on Aging Population

2. Develop Based on Behavioral Risk Factors andOther Demographics

3. Develop Based on Screening, Early Detectionand Medical Innovations

4. Develop Based on Different Health Care CostGrowth

5. Avoidable Cost = Difference in ExpenditureBetween Baseline and Optimistic Scenarios

Percent Growth in Number ofPeople Reporting Chronic Diseases Current Path vs. Alternative Path, U.S., 2003-2023

42%17%

54%35%

29%5%

41%-8%

39%13%

39%6%

53%33%

31%13%

65%35%

75%38%

34%9%

32%9%

51%32%

62%33%

-10% 0% 10% 20% 30% 40% 50% 60% 70% 80%

ALL CANCERS

Breast Cancer

Colon Cancer

Lung Cancer

Prostate Cancer

Other Cancer


Diabetes

ALL CARDIOVASCULAR

Hypertension

Heart Disease

Stroke

M ental Disorders

Total

Current Path Alternative Path

Heart Disease


Avoidable Treatment Expenditures U.S., 2023

$27 $10

$63 $17

$65 $23

$92 $26

$107 $28

$109 $37

$110 $76

$0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200

Treatment Expenditures (US$ Billions)

Stroke

Diabetes

Hypertension


Mental Disorders

Cancers

Heart Disease

Alternative Future

Expenditures Avoided


Avoidable Productivity Losses U.S., 2023

$14

$218 $47

$182 $137

$277 $73

$480 $88

$666 $173

$587 $373

0 100 200 300 400 500 600 700 800 900 1000

Productivity Losses

(US$ Billions)

Stroke


Heart Disease

Diabetes

Mental Disorders

Hypertension

Cancers

Alternative Future

Productivity Losses Avoided

$47


Avoidable Economic CostsAttributable to Decline in Obesity U.S., 2023

$15

$52 $39

$100 $87

$73 $118

$85 $312

$0 $50 $100 $150 $200 $250 $300 $350 $400 $450

Avoidable Economic Impact (US$ Billions)

Stroke

Diabetes

Hypertension

Heart Disease

Cancers

Obesity Other Factors

$3

=$397

=$191

=$187

=$92

=$19


Long-Term Economic Impacts Overview

• Attempt to quantify health (chronic disease) impact

– on human and physical capital formation

– the restrictions imposed on intergenerational economic growth

• Determinants of economic growth and model specification

– Historically, only few have been found to be significant in explaining growth

• Human capital’s role

– Dynamic economic growth depends upon

• health (life expectancy at 65),

• stock of labor (labor force),

• quality of labor (percent of adult population with bachelor’s degree or above),

• physical capital (real stock of equipment and structures)

– Good health increases the rate of return to investments in education

– Improves the nation’s competitiveness in the long-term

– The higher the income earner’s human capital, the greater the probability that theywill invest in their children’s and grandchildren's education

Health and Human Capital 2003



Life Expectancy at 65 Population with Bachelor’s Degree Percent


U.S. Long-Term Foregone Economic Output

Change in Real GDP Between Baseline and Optimistic Scenarios

0

1

2

3

4

5

6

US

$ T

rillio

ns

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Year


Economic Burden of Chronic Disease: Conclusions and Recommendations

Conclusions:

• Lost Productivity Surpasses Treatment as the Cause of EconomicBurden

• Early Interventions and Medical Innovations Improve Quality andLongevity of Life

• Healthcare Expenditure Accounts by Disease Are Needed

• Good Health Is an Investment in Economic Growth

Recommendations:

• Incentives for Prevention and Early Intervention

– We need private-public partnerships to incentivize patients andproviders to prevent chronic disease effectively

• “Healthy Body Weight Initiative”

– We need a strong, long-term national commitment to promotehealth, wellness, and healthy body weight

Hungry Man “All Day Breakfast”

Socio-Ecological Model

The Scope of the Obesity Problem

Source: JAMA 2006;295:1549-1555.

VIDEO SAFE

Prevalence of Obesity by Family Income 1999-2004, NHANES

12%21%21%18% 22% Mexican-American

21%27%17%19% 18% Black

11%14%15%15% 17% White

Race/Ethnicity

12%18%19%17%20% 12-19.9

14%16%18%16%21% 6-11.9

8%8%9%15%11% 2-5.9

Age Group (years)

11%17%15%15%18% Girls

12%15%17%17%18% Boys

Sex

12%16%16%16%18%Overall

43.0-3.92.0-2.91.0-1.9< 1.0

Income Ratio to Poverty Threshold

Source: Freedman et al.. Childhood overweight and family income. MedGenMed. 2007 May 3;9(2):26.

A comprehensive school-based trial to determineif changes in the school environment can reduce

risk factors for type 2 diabetes

Performed at 7 sites, in 42 middle schools

Studies to Treat Or Prevent Pediatric Type-2Diabetes

• 6th Grade Cohort

• 6367 participants (57.6% ofstudents)

• 11.8 + 1.1 years (range 9-15)

• 47.5% male; 52.5 females

• Ethnicity

– 53.1% Hispanic

– 19.8% African American

– 18.8% Non-Hispanic White

– 0.5% Native American

– 7.7% Other, Mixed

• 8th Grade Pilot

• 1740 participants (47% ofstudents)

• 13.6 ± 0.6 years (range 12-16)

• 43% male, 57% female

• Ethnicity

– 53% Hispanic

– 23% African American

– 15% Non-Hispanic White

– 3% Native American

– 6% Other, Mixed

Source: Diabetes Care 29;212;2006.

20

30

40

50

60

70

80

Male Female

White Black Hispanic American Indian

Total 49%Males 51%Females 48%

20

30

40

50

60

70

80

Pe

rce

nt

Male Female

White Black Hispanic American Indian

Total 50%Males 52%Females 47%

6th grade 8th grade

Percent with BMI 85th Percentileby Gender and Race/Ethnicity 6th Grade vs. 8th Grade

Diabetes Care 29;212;2006 Presented at ADA 2007

15.9% FBG 100-125 mg/dl 39.1 % FBG 100-125 mg/dl

What does the environmentoffer youth?

• 6212 children andadolescents 4-19 year

– 30% consumed fast foodon typical day

– Children eating fast foodconsumed additional 187kcal/day

• Teens consume 2X amountof sugar than recommended= 44% from soft drinks

– Evidence – 1 extra sodaincreases risk foroverweight by 60%

• Adolescents watch 3hours TV a day

• 32% of 2-7 year olds and65% of 8-18 year olds haveTV in their bedrooms

0

5

10

15

20

25

30

35

0-2

Hours

2-3

Hours

3-4

Hours

4-5

Hours

>5

Hours

% Overweight

Sources: Ludwig DS, Peterson KE, Gortmaker SL. Lancet 2001;357:505-08.Bowman SA et al. Pediatrics2004; 113: 112-118. Pereira MA et al. Lancet 2005; 365:36-42, 4-5.

Gut

Food

Pancreas

Muscle

Insulin Glucose

Elevation of blood glucose:The hallmark of diabetes

• Type 1 diabetes - <10% of all diabetes

– Genes and the environment

– Cannot be prevented

– Destruction of pancreatic cells due toautoimmune disease

– Failure to secrete sufficient insulin

– Must take insulin everyday

• Type 2 diabetes - >90% of all diabetes

– Can be prevented – 90%overweight or obese

– Genes and the environment

– Insulin resistance and relativeinsulin deficiency

– Can take pills, and/or insulin

<4% 4%-6% 6-8% 8-10% >10%

The Global Diabesity Epidemic

Diabetes World WideDiabetes World Wide 2003 = 194 million 2003 = 194 million 2025 = 333 million 2025 = 333 million

Increase 72%Increase 72%

Diabetes Trends1990 1995

2001

Type 1 increase – 3%/year

Type 2 increase – 10-fold in 10 years

0-9 years, 0.79 per 1000 10-19 years, 2.80 per 1000

The SEARCH Study

1.82 cases per 1000 youth

Total cases 154,369 in 2001

Source: Pediatrics 2006;118:1510.

Diabetes is the 2nd MostCommon Chronic Childhood

Type 2 diabetes in theyoung: there has been aglobal increase

•Children in both developedand developing nations

•The risk of type 2 diabetesis linked to obesity(associated with•changing dietary andlifestyle patterns)

• NHANES 1999-2002

– 0.5% of adolescents

– 39,005 US teens withT2D

• Australia

– Aboriginal children

• Doubling to 1.3%

• Canada

– 4% prevalence inNative Canadian

• Different in Europe

– 0.5% of children havetype 2

Sources: Duncan, Arch Pediatr Adolesc Med 2006;160:523; Geiss, Am J Prevent Med 2006;30:371

More children worldwide aredeveloping type 2 diabetesIDF Atlas of Diabetes 2006: Type 2 diabetes key facts

9

8

7

6

5

1975 1980 1985 1990 1995

10

20

30

40

50

60

70

80

Ty

pe

2 d

iab

ete

sin

cid

en

ce O

be

sity

(%)

Type 2 diabetes

Obesity

Pediatric type 2 diabetes in Japan

4 fold rise in 6-15 year olds, type 2 has now overtaken type 1 in Japan … Challenge of best treatment

Source: Kitigawa T et al. Clin Pediatr (Phila) 1998; 37: 111-115.

Standard Approaches to Therapy Resultin Prolonged Exposure to Elevated Glucose

Source: Brown JB et al. Diabetes Care. 2004;27:1535-1540.

Intensive Therapy for Diabetes

Source: DCCT Research Group. N Engl J Med. 1993;329:977-986; Ohkubo Y, et al. Diabetes Res Clin Pract. 1995;28:103-117; UKPDS 33: Lancet. 1998;352: 837-853; Stratton IM, et al. Brit Med J. 2000;321:405-412.

Reduction in Incidence of Complications

Diabetes is Serious Even in KidsA Cause of Morbidity and Mortality

Type 1 versus Type 2 Outcomes in Youth In Australia

Diabetes Care 29:1300,06

Opportunity to Improve U.S. DiabetesTreatment Standards

Source: The Lancet, Vol. 356, August 26, 2000.

“The age-adjusted death rate for diabetes in the USA hasincreased 30% since 1980.”

Uncontrolled diabetes destroyspeople’s lives

HEALTHY Study

Decrease percent of students with risk factors for

type 2 diabetes compared to control

The cohort is over 6,367 6th graders, followed to 8th grade

Type 2 Diabetes PreventionResults of Randomized Trials

The Diabetes Prevention Program

A Randomized Clinical Trial to Prevent Type 2 Diabetes in Persons at High Risk

The U.S. Diabetes Prevention Program

Lifestyle vs. Placebo

U.S. Diabetes Prevention Program

Source: DPP Research Group NEJM, 2002.

Lifestyle vs. Placebo

• Compared with the placebo intervention, thelifestyle intervention was cost-saving in participantsyounger than 45 years of age and cost effective inall age groups.

• From the perspective of a health system, thelifestyle intervention was highly cost-effective,costing only $1100 per QALY.

DPP

• How do we bring the DPP to the 50 millionAmericans at imminent risk?

- It requires behavior change to increase physicalactivity and improve nutrient and calorie intake

• To replicate the DPP

- Lifestyle coaching (1 coach for 25-30patients)

- Cost per patient: $3,540 over 3 years

- We would need 1,500,000 coaches at acost of 5.3 billion dollars

The Public Health Question of MyGeneration of Health Care Providers

We Need to Translate the DPP

This cannot be done in the Health Care Setting

It must move to Community Venues

The Workplace

Established Lifestyle Programs – combiningphysical activity and nutrition coaching and

support

Use technology for enhancement, maintenance

DPP Results

Kids N Fitness ProgramA Program for Weight Maintenance

Change in mean BMI Percentiles Baselineto Follow-up Mean time elapsed 9.1 months +/- 1.7

70

72

74

76

78

80

82

Baseline Follow-up

Intervention Control

Economic and Public Health Approaches

• Positive Analysis: Explain how health is determined

• Private Costs and Benefits drives Behavior

• Normative Analysis:

• Social vs Private Costs and Public Interventions

• Maximize health is not sensible policy objective

• Highways, airports, etc

• Transportation Induced Mortality vs TechnologicalChange and Obesity

Discussed Work Today

• Lakdawalla, D., T. Philipson, and J., Bhattacharya, (2005) "WelfareEnhancing Technological Change and The Growth in Obesity",American Economic Review, v 95 (2), pp 253-257.

• Philipson, T., and R., Posner, (2003), “The Long Run Growth ofObesity as a Function of Technological Change, Perspectives inBiology and Medicine, Summer, v 46, No 3, 87-108. [Also NBERWorking Paper # 7423].

• Lakdawalla, D., and T. Philipson. “Labor Supply and Weight”,Journal of Human Resources, 2006.

• Lakdawalla, D., and T. Philipson. “The Growth in Obesity andtechnological Change: A Theoretical And Empirical Examination.”NBER Working Paper #8446

• Philipson, T., and R., Posner, “ Is The Obesity Epidemic a PublicHealth Problem? A Decade of Research on The Economics ofObesity”, forthcoming, Journal of Economic Literature.

Historical Growth in Weight

Source: Costa D. and R. Steckel (1995), NBER Historical WP #76.

Calories Produced per Person-Day 1906-1998

Source: USDA’s Economic Research Service.

Food Price Time Series

Technological Change & Obesity

Economic Forces Have Been Neglected

• Agricultural TC: Price of Calorie ConsumptionFallen

– Specialization In Production: Agriculture

– Specialization in Preparation: Home vs. Market

• Female Labor Supply + Value of Speed

• Productivity Enhancing TC: Price of CalorieSpending Has Risen

– Pay, as opposed to get Paid, to Exercise

– Labor to Leisure : Gym +Jogging (Total Up)

Why Both Forms of TechnologicalChange ?

• Together Imply: weight rises, calorie intake ambiguous,and price falls

• Fall in Food Prices Alone:

• Cannot Explain Lack of Time Series CorrelationBetween Weight and Calorie Intake

• More Sedentary Technologies Alone:

• Cannot Explain Increases in Calorie Intake

• Demand Explanations (“Food Culture”):• Demand increase alone cannot explain the 3 time

trends together

Earned vs. Unearned Income Effects

• Asset Market vs. Labor market Effects

• Income Effects Within vs. Across Countries

• Public Redistribution Effects

• Future Time-Series dependent on which effectdominates.

Empirical Analysis

• The Effect of Physical Activity at work on BMI– Strenuousness from Dictionary of Occupational Titles

– Merge with data from NHIS (1976-1994) and NLSY(1978-1996)

• Exploit NLSY features– Estimate long-run effects of occupation on weight

– Assess Endogeneity of occupation and weight

• Main Results : Work Effects & Decomposition– Weight differences due work-career 3.3 BMI

• Large relative to secular trends

Alternative Explanations

• Nutritional Knowledge– Wrong Time Trend-Know More Now– Knowledge and Health Covary but Endogenous

• Weight as Signal– Time Trend Difficult to Explain

• Genetics– Speed Difficult To Explain– Interaction (not Nurture vs Nature) explains price effects

• Market Preparation & Fast Food– Producer=Consumer Interest ?– Fast Food Implication of Technological Change and

Value of (Female)Time– Fast Food Share Less Than 10 % of Calories

Public Policy and Obesity

• Positive Analysis• Programs Assessed in Light of Forces of Growth• Example: Public Education & Food Labeling

• Information Ability to Explain Time Trend ?

• Normative Analysis

• Over-weight in Pareto Sense ?• If Yes: Non-Linear Taxes on Calories

• Addiction and Government• Insurance Externalities: Medicare and Social

Security• Smoking Analogy• Fiscal Externalities Really The Issue?

• Obesity Public Health Problem ?

Calories CountReport of the

Working Group on Obesity

Department of Health and Human ServicesFood and Drug Administration

Prevalence rates of overweightand obesity in the United States, adults 1995-2006


200620052004200320022001200019991998199719961995

40

35

30

25

20

15

Percent

Overweight

Obese

Physical activity 2001 and 2005


2001 2005

83MilkenInstitute_v1

Obesity RoundtableMilken Institute Global Conference

April 28, 2008

Steve BurdChairman, President & CEO

Safeway Inc.


US Healthcare Costs Rising Rapidly

25.9%

22.0%

18.7%

16.2%

13.8%12.4%

9.1%7.2%

'70 '80 '90 '00 '05 '10 '15 '20

$ Billion

$75 $255 $717 $1,359 $2,016 $2,992 $4,437 $6,580

Sources: Centers for Medicare and Medicaid Services (CMS), Office of the Actuary; Safeway analysis

Healthcare Costs - % of GDP


We Believe this is a Very Solvable Problem

70% of healthcare costs are driven by behavior

74% of all costs are confined to four chronicconditions

Obesity is the most important and pervasive costdriver . . . the condition and its costs can be reversed

Every private sector company can experience percapita cost declines without cost-shifting orgovernment help


“Big Four” Chronic Conditions Dominate Costs

33%

20%

11%

10%

9%

17% 100%

Cardio-

vascular

Disease

Cancer Diabetes Over-

weight &

Obesity

Other

Chronic

All Other Total

Healthcare

Cost

Source: CDC, HHS

Cost Distribution by Disease State - 2005

74% of Total Costs

Nearlyall can

improve

80%Type 2

40% / 60%80%Heart dis,

stroke % Preventable / Manageable


Cardiovascular Risk FactorsOverweight & Obese vs. Normal Weight

8.3

2.6 2.5

1.11.4

4.4

3.4

1.6

Metabolic

Syndrome

Hypertension Type II Diabetes Dyslipidemia

Obese Overweight

Times Normal Weight Risk


Elements of the Solution

Understanding energy balance – calories in andcalories out

– 3,500 calories = 1 pound

– Pull both levers simultaneously; lots of combinations

Managing calories in

– Healthy alternatives: what you choose to eat

– Recipes and preparation

– Portion control

Exercise and social networking

– Small (10 members) support networks

– Realistic goals and timeframes

– Short interval reporting; sharing what works


Elements of the Solution

Personal movement and exercise program

– Cardio and weight training

– Many possible activities to achieve burn target

– Physical trainer can help get people started

KFS: Each individual defines his / her own program


Food Industry Obesity Challenge

CEO commitments

– 10+ CEO working group developing the details

– 30+ CEOs / companies will be recruited

Three areas of focus

– Understanding energy balance

– Physical education back in the schools

– Walking the talk . . . reducing obesity in our employeepopulation

Deliverable: Proven template for national action

Timeframe: 18 months

the energy balance - milken institute€¦ · • coronary heart disease • stroke • gallbladder...

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