The Economics of Meats and Sweets

It's no secret America's health care system has a major problem with affordability...we hear about it all the time. Costs are increasing faster than inflation, Medicare is bankrupting this country, and there are so many uninsured poor people that need care.

It's also no secret that America has many obese citizens. I think there is a connection...

Thanks to the good folks at CBS, this 60 Minutes episode titled Is Sugar Toxic (video link here) blew my mind; I highly recommend it. The video starts with the bold but arguable claim that "75% of the diseases in America are preventable." I've heard this 75% number before in the documentary Forks Over Knives. Both films qualify cancer, Type-II diabetes, hypertension, and heart disease as largely preventable via proper diet. I strongly believe the overwhelming majority of these diseases are preventable; there is an abundance of scientific evidence showing that a diet heavy in plants, and light on meats and sweets (aka Western pattern diet), decreases the occurrences of these diseases. It's pretty self-explanatory. If I eat healthy foods, then I probably won't be obese, and I probably won't suffer from obesity related diseases like Type-II diabetes or heart disease.

But I'm not here to preach about why you should eat vegan, put down the potato chips, and abandon the Western diet. That would be annoying. I'm arguing there is a better way to fix our health care system and address America's obesity problem...a way that doesn't involve expanding Medicaid, or using the IRS to threaten the American public into purchasing health insurance.

My solution revolves around this theme: people should be held accountable for their lifestyle choices. If I make poor lifestyle choices, then I should pay the costs for my choices. If I indulge in the Western diet, can't foot the associated insurance costs and/or doctor bills, then I should go bankrupt and hopefully society can learn from my mistake. America's health care system is falling apart because America is addicted to the Western diet and then passing along the costs to someone else in America. In short, there is a lack of accountability.

My scheme is akin to insurers charging smokers a higher premium because they addictively inhale nicotine and hundreds of other toxic carcinogens. If I addictively inhale a diet heavy in meats and sweets, and my medical tests are not in line with some baseline of health, then I should pay more to insure myself against cancer, heart disease, type-II diabetes, hypertension, and other largely Western diet related diseases. If I eat a healthy diet and my vitals are good, again relative to some baseline, then I should pay less. (Note: I do like the new regulation that requires insurers to cover pre-existing conditions, with a fair incentive structure that discourages any potential scams...so yes the Affordable Care Act has a few good provisions).

The economic impact of diet-related disease is as follows. Something like 17% of America's GDP,  or $2.5 trillion per year, is spent on health care. Of this, ~$1.92 trillion (75%) is arguably spent treating preventable diseases. If the 75% estimate is anywhere close to accurate, then it suggests our health care system is swelling with an unsustainable amount of demand, which results in price inflation and a perception of declining quality (which may very well be true).

To truly fix this problem, barring some amazingly cheap medical breakthrough that allows humans to load up on processed foods, requires Americans to eat less processed foods. It will be tough, the Western diet is addicting. Sugary, salty, meaty snacks tastes good, and humans have evolved to love foods that taste good. However, if humans were accountable for over consuming unhealthy foods, then the health care system would have less demand, prices would fall, and health care would be more affordable for everyone.

Here are some additional ideas to help fix the system:

1. Contact your representatives and request they support legislation that links health insurance premiums to lifestyle choices. Doing so offers an incentive to replace unhealthy diets with more fruits and veggies. This system just makes sense...there needs to be a price for poor lifestyle choices.

Health insurance was invented to secure us from infrequent, catastrophic diseases...now we expect insurance to cover not only the $640 billion of unpreventable diseases, but also the $1,923 billion of preventable diseases. That's a tough job.

Establishing the definition of "preventable" may not be the easiest task at first, however a competitive insurance market (along with legal precedents set by courts) will lead to industry standards and improved customer satisfaction.

2.  Contact your representatives and request they end the employer provided health insurance tax loophole. This odd program is unique to America and it's one of the stupidest tax loopholes around. I'm not arguing companies shouldn't offer group health plans, I'm arguing they shouldn't be incentivized to offer them. In it's current form, group health insurance programs mask and socialize the true costs of the Western diet. Furthermore, it's not clear this program is more efficient than alternative schemes, so it should not be treated as such by government.

3.  Contact your representatives and request they end the federal tax credit that incentivizes the overproduction of corn and soy. These subsidies artificially lower prices and increase supply, hence the reason why livestock are fed corn (although they naturally eat grass), and why high fructose corn syrup is in so many American foods.

4.  Contact your representatives and request they remove the import tariffs on sugar. This is somewhat counter to the conclusion from Is Sugar Toxic, however tax loopholes are a symptom of a corrupt government system where political favors, influence and votes are bought and sold (i.e. crony capitalism). Crony capitalism is on display in Is Sugar Toxic when Sanjay Gupta interviews a spokesman for The Sugar Association.  This association is comprised of a group of domestic sugar producers that lobby the government for favors. It's a fact that lobbyists and cronyism lead to tax loopholes, lopsided and corrupt regulations, and a bad reputation for capitalism.

Here is a tangentially related 60 Minutes report on Jack Abramhoff, in which Abramhoff paints a sobering portrait of crony capitalism in action.

Eat your plants, avoid meats and sweets, and see you in the year 2100 (hopefully).