# Session overview Burden of NCD and risk factors, particularly diet. Then discuss the relationship between diet and health and some modelling studies which consider the macroeconomic and health impacts of policies and interventions which affect NCDs. ## Learning outcomes - Present an overview of the global health burden of NCDs - Discuss the key difference between ID and NCD effects on the global economy - Present the global causes/influences of selected NCDs - Discuss the links between agriculture, diet/nutrition and NCDs - Discuss the global economic implications of dietary change to reduce NCDs - Discuss the links between NCDs, food, agriculture and trade - Describe a macroeconomic modelling application of dietary change - Discuss the trade-offs between health and economic benefits of reducing NCDs # 1. Introduction ![[Globalization concept diagram.png]] > NCD is like rising sea-level while ID is like tsunami In contrast to infectious disease pandemics, non-communicable diseases impose a less sporadic but increasing burden on health and the global economy. Some NCDs, such as Alzheimer's disease and dementia, impose a burden on older members of society and, although care by relatives may have a wider economic impact, the bulk of the direct disease or patient costs occur to the healthcare sector1. However, many of the chronic NCDs of greatest global concern such as cardiovascular disease, diabetes, and some cancers impose a heavy burden on those of working age with more than 15 million NCD deaths occurring amongst those aged 30-69 globally, 85% of which in low and middle-income countries. This has implications for economic productivity as well as imposing substantial health sector costs and therefore requires a macroeconomic approach to cost estimation. Interventions to address many NCDs, particularly those of highest global burden, target healthy eating and nutrition. Healthier eating in high- and middle-income countries would be expected to reduce the chronic disease burden whilst improved nutrition in low-income countries would, amongst other things, improve child health. # 2. Global overview ## 2.1 Introduction > Regular media coverage often indicates that this burden is highest in developed, rich countries, but in fact 77% of chronic disease deaths now occur in lower income countries. To give an example of the total burden of NCD-related deaths: in 2019, 41 million, or 74% of deaths, were due to non-communicable diseases (NCDs). The Four Horsemen of NCD: cardiovascular diseases, cancers, diabetes and chronic lung diseases. In the case of NCDs prevention is better than cure and it is cheaper than cure (from the health sector perspective) because there are major modifiable risk factors that are preferable to treatment for NCDs. Coronary heart disease, stroke and other cerebrovascular diseases accounted for 17.9 million worldwide deaths and diabetes for more than 2 million deaths, but what people eat can affect their likelihood of suffering from these conditions. The adoption of a healthy diet to reduce the NCD burden is the focus of this session and we will be considering it in some detail. The focus of this session is over-nutrition: excess calorific or fat intake. However, it is important to highlight the opposite problem too. In some countries there is a double burden from unhealthy eating in terms of under-nutrition and over nutrition existing together in the same country. ## 2.2 A Healthy Diet? Dietary habits and available food varies across the world. Therefore no standard diet can be adopted globally. WHO regulations suggest that a healthy diet consists of a large amount of cereals, vegetables, fruits and pulses, but limits consumption of red meat and processed meat. Broadly, · Fat should not exceed 30% of total energy intake · Saturated fat should be less than 10% and trans fatty acids less than 1% · Free sugar intake should be less than 10% of total energy intake · Less than 5g per day of salt should be consumed and · More than 400g per day (five portions) of fruit and vegetables should also be consumed However, the economic benefit may only be true when viewed from the micro economic perspective and this is the problem with only using a partial equilibrium or health sector analysis. ==By focussing attention on the areas or sectors where the benefits of a reduction in NCDs is observed, it is possible to ignore the areas where negative effects may occur. It is true that the brunt of the discernible NCD burden is borne by the health service but changing behaviour to reduce the health service burden may have other, perhaps unconsidered, consequences.== ## 2.3 Globalisation and diet > Healthy food is expensive, so it disincentivize healthy diet. Conversely, in order to disincentivize unhealthy eating, government must introduce the policy. There are several barriers to changing diets and these can occur from different perspectives. There are barriers at the point of sale: these are interventions that change consumer purchasing behaviour which are influenced by price. Prices may discourage healthy eating because the under nourished cannot afford the nutritious food that they need. Also, those who are overweight may find that lean meat, fruit and vegetables are more expensive to purchase than the processed foods that they more commonly eat. Therefore, at the point of sale there are discouragements from eating healthily. Conversely, in order to reduce unhealthy eating, it is possible for governments to change the purchase price of healthy or unhealthy foods by using subsidies or taxes (fat taxes) which could deter unhealthy eating and enable those who choose to eat healthy to do so affordably. While, at the policy level the goal of agricultural producers and food processing and production sectors, is to maximise profits and to try and maximise sales and output, this is often in conflict with people consuming healthily. Both of these issues, whether it be point of sale prices or whether it be decisions made at a policy level are strongly influenced by globalisation and trade. [[Foreign Direct Investment (FDI)]] is another means by which [[Trade liberalisation boosts adoption of behaviours such as smoking and unhealthy diets|globalisation affects diet]]. Changes in regulations have made it possible for companies to be purchased to enable products and services to be offered more easily across national borders. The possibility of production companies being purchased from abroad creates incentives for large organisations such as Transnational Food Companies or TFCs to grow. The growth of TFCs has resulted in vast supermarket chains and fast food networks such as McDonalds. ### Food production Globalisation of the food market means that we now have an integrated market place and in that integrated market place some countries choose to specialise in producing certain foods. This choice is sensible because it makes the best use of the available factors, the type of land, growing conditions and other strengths of the country concerned for production of particular products (food in particular). ==Sometimes, it is not only the production capacity but the ability and positioning of a country to transport certain goods that enables those countries to profit from global food markets==. By specialising in production of a particular food or distribution of goods, larger profits can be obtained because larger sale volumes and lower prices can be achieved by mass production and distribution. The profits obtained by this means are larger than those that might be obtained if a country did not specialise and so tried to produce all the various types of goods that are desired by consumers on the domestic market. It also enables a wider variety of foods to be made available in countries that are able to purchase them since some countries cannot produce certain goods. Globalisation of food marketing can be split into three different components. 1. First of all, there is the globalisation of transnational food companies and their foods. We are familiar with this, for example McDonalds, Coca Cola and so on. These are transnational food companies which are marketing their foods in many countries. 2. The second component is the globalisation of advertising and marketing agencies. Big international advertising agencies now exist and they are reaching into lower income countries seeking to sell for example Pepsi to the exclusion of competitive brands and are creating demand in new places for their products. Also, through globalisation of communication technologies, global marketing is enabled so we now have large global phone and television companies all of which enable communication and advertising of the same product (or the same company’s product) all over the world. ## 2.4 Example (Hawkes 2007) In the 1960s and 1970s the Brazilian government began to promote production, domestic consumption and export of soybean oil recognising that this is a product which could be well marketed and could become more profitable since Brazil was able to support its increased production. Therefore, in line with the globalisation agenda in the 1990s, the Brazilian government opened up its soybean market and reduced government intervention in that market with regard to trade. In terms of policies, this meant that there were reduced foreign investment restrictions allowing companies from outside to invest in Brazilian soybean companies in the manner discussed previously (see also Figure 1 below). ![[Brazil soybean oil export strategy.png]] By viewing these interactions retrospectively, we can see how, over time, globalisation and the mechanisms of trade between producers and large transnational food companies generate changes in production. This example also clearly illustrates the role of tariffs and incentives to investment, but the emphasis of the changes that were produced was clearly economic gain and the welfare of producers. Production, sales and profits were increased by the policies and procedures implemented in this example, but when considering the impacts of these policies from the perspective of producers, companies and economic gain only, it is possible to miss the effects on consumption. Changes in consumption have a potential influence on health either positive or negative but these health changes are not usually considered at the policy level. ## 2.5 NCD vs ID Standard yada yada about the differences of NCD and ID. ## 2.6 Tariffs, trade barriers and incentives Governments can impose barriers, for example, licences or quotas to prevent a country from importing particular foreign goods in any great quantity in order to protect the domestic market: it might be that cheaper alternative goods are available in other countries but allowing large quantities of imports would cause those who produce those same goods in the domestic economy to go out of business. By restricting imports, domestic livelihoods are protected. By tariffs, such as import taxes, can be imposed or, tariffs can be lifted or reduced. By these mechanisms trade can be restricted or liberated. Tariffs are intended to reduce imports therefore securing certain aspects of the domestic market, perhaps encouraging growth of a particular market within a country by preventing the goods it produces being imported from elsewhere. Incentives for investment, such as tax exemptions, are also used since by making a product tax exempt its price is minimised which encourages sales. In contrast, imposing taxes to increase the price of production or sale of a commodity can be used as a policy instrument to discourage consumption. A recent example of this is the UK Soft Drinks Industry Levy (SDIL). In April 2018 the UK introduced the SDIL, which applies to the production and importation of soft drinks containing added sugar. The levy is a business tax which applies to the producers and importers of these types of drinks and consists of a low rate of 18p per litre (for drinks with a total sugar content of 5 grams or more per 100 millilitres) and a high rate of 24p per litre (for drinks with 8 grams or more per 100 millilitres). The objective of the levy was to reduce childhood obesity by removing added sugar from soft drinks. By applying the tax to the producers, the levy is intended to ensure that producers will either - reformulate their products to reduce the sugar content - reduce portion sizes for added sugar drinks Therefore, there are several different ways in which to affect consumption/production of different foods or other goods which are a risk factor for NCDs. From the health perspective, the key issue is, if consumption of one good should increase/decrease, how does this affect the consumption of other food goods in consumer’s shopping baskets? and, how much more/less healthy is that new shopping basket? However, a change in consumption of food goods will also influence other sectors within the economy. ## Activity Think of a product or commodity which is a risk factor for health or is closely related to a risk factor for health. This could be cigarettes, an unhealthy food or perhaps something which encourages sedentary lifestyle and low levels of physical activity. If you were in a policy-making position, what policies or interventions would you impose to attempt to reduce the adverse health effects of that product/commodity/risk-factor? On Moodle, write a brief paragraph (or more if you prefer) to describe your policy/intervention and try to list some - Health and economic benefits of your intervention (and who benefits) - Negative consequences (and who loses by your intervention) # 3. Macroeconomic perspective ## 3.1 Introduction For the Covid example, there were also non-health related shocks (where labour and capital was removed from non-essential sectors to reflect closure of businesses). For dietary change a non-health shock is also applied but it is a food tax which will reduce the demand for particular (unhealthy) foods by making them more expensive. ## 3.2 Outline of the model setup The model used in the example is a CGE model of the UK, similar to the one presented in the previous session. Although we focus here on the healthy diet scenario of the study, the full paper from which this example is taken is included in the reading list and considered strategies to meet UK targets for greenhouse gas (GHG) reduction in the agriculture, transport and housing sectors. For each sector, an intervention was designed which would accomplish the required GHG reductions but also improve health. You may find it interesting to read the paper and notice how other non-health interventions may affect risk factors for NCDs and how CGE models can be used in this context. ==However, you will not be expected to understand or demonstrate the technical side of CGE modelling beyond the information supplied in the GHM101 core materials for sessions 7 and 8.== The modellers calculated that, in order to reduce agricultural production sufficiently that the emissions (from ruminants) would fall within the UK government’s GHG targets by 2030, a 26% tax on animal products would be required. The CGE model was therefore able to work out the combined macroeconomic impact of both the - Non-health impacts (the economic impact from changes in supply and demand resulting from the tax) - Direct health impacts from the change to a healthier diet where people eat less saturated fat from meat and dairy products (labour supply effects and healthcare costs) ## 3.3 Calculating the impact The 26% food tax used in the CGE model reduced consumption of meat and dairy products by 30%. ### 3.3.1 Health Impact Separate health modelling estimated that, because people would be eating 30% less saturated fat from meat and dairy products, the health effects that would accumulate between 2011 (when the tax was assumed to be implemented) until 2030 would be equivalent to saving - 185,000 years of life lost (YLL) — 45,626 of which would be in the workforce - 12,014 years lived with a disability (YLD) — 3,322 of which would be in the workforce These may not be measures you are familiar with, but saving 185,000 years of life lost (YLL) can be understood as follows: The change in diet from the food tax makes people live longer. It is estimated that, if you were to add up how much longer people will live because of the change in diet resulting from the tax, across the whole UK population it would come to a total of 185,000 years by 2030. By a similar measure, saving 12,014 years lived with a disability means that, across the whole population, the change in diet would give a total of 12,014 years lived in perfect health by 2030. For the CGE model, the health modelling suggested that the change in diet from the food tax would be equivalent to 48,9487 years of work gained by 2030 across the whole economy (workforce). It was also estimated that the cost to the health service of caring for those with diet-related NCDs would be reduced by £3.15 billion by 2030 from the change in diet. ### 3.3.2 Macroeconomic Impact When the food tax and the health effects (labour supply and health service costs) were applied in the CGE model the results were a total loss to the UK economy of £95.9 billion. ==The modellers reported that the main reason for this economic loss was because of the food tax which was very inefficient==. We discussed efficiency in session 1 and in this case, the CGE model was set up so that, when the food tax was applied, there was a big reduction in production of livestock. This meant that the resources (land, for example) which would have been used (efficiently) to produce livestock were no longer properly utilised- there was now an inefficient use of resources, which became very costly over 20 years. In fact, the modelers showed that the tax by itself (without the health effects) produced an even bigger loss (more than £104bn). The figure below shows how the CGE model captures the impact across all sectors. The inefficiency introduced by the tax has resulted in a large decline in production in the meat and dairy sectors, but, since the CGE model captures how all of the sectors in an economy interact, the plot below also shows how a decline in one sector can affect others. For example, the decline in meat and dairy production has caused a fall in the livestock sector too, because these two sectors are very closely related. The health-related economic benefits from the change in diet (increased labour supply and reduced costs to the health service) brought an economic gain of £4.6 billion by 2030, but this was not enough to counter the loss from the food tax. In fact, the authors of the study also found that, if they allowed the CGE model to expand agricultural production in other ways (for example taking land from the livestock sector and using it for other kinds of agricultural production) the economic loss from the food tax would be much smaller, but this would have also increased the GHG emissions so that UK targets for 2030 would not be met (and meeting those targets was the goal of the study). Also, it takes a while for changes in diet to affect health (sometimes many years) so the food tax would have continued to produce health improvements and health service savings beyond the time that was modelled and, in that sense, the health-related economic benefits were under estimated. ### 3.3.3 Other macroeconomic examples The macroeconomic modelling example above might give the impression that the health benefits and healthcare savings of adopting a healthy diet are not worth the cost to the rest of the economy. However, this example has been used because it is a straightforward modelling application which illustrates the use of CGE in the context of NCDs. Other, often more complex, studies have found different results. For example, several CGE modelling studies have been conducted which analyse the impact of policies to affect consumption of palm oil in Thailand. It has been suggested that, because palm oil has a higher saturated fat content compared with other oils, it may adversely affect health and Thailand is one of the world’s largest palm oil producers. We mentioned [[comparative advantage]] in session 1 and Thailand has a [[comparative advantage]] for producing palm oil (which grows best in humid tropical conditions close to the equator). #### Sales Tax Study Using quite a complex CGE model (where health and environmental effects were built-in to the macroeconomic model), a sales tax study estimated that a 54% sales tax on palm oil in Thailand would be needed to halve consumption of palm oil by the Thai population. However, in contrast to the UK study mentioned earlier, the modellers found that the level of efficiency in the current Thai economy (where taxes and subsidies are already in place relating to palm oil) can be increased by taxation: the sales tax had a favourable economic impact and the study indicated that halving consumption of palm oil using a sales tax - Increased Thai GDP by US$9.9 billion over a 20 year period - This included US$95 million in health-related gains (labour and health care costs) - Reduced incidence and mortality of myocardial infarction and stroke by 0.03–0.16% across the population - Increased GHG emissions (because land that had been used to produce palm oil switched to other agricultural production which had less favourable characteristics for emissions) Other results are presented in the paper, but the analysis concluded generally that CGE modelling demonstrated how applying these sorts of food taxes may involve important trade-offs between nutrition, health, the environment and the macroeconomy. #### Import Tariff Study A second study, using the same Thailand CGE model, was used to analyse the health and macroeconomic impact of removing import tariffs in Thailand, but not just on palm oil, but also on food and non-food sectors. Although both the model and analysis in this paper include technical information beyond the scope of this module we summarise one result which demonstrates some of the theory and issues we have outlined earlier in this session and it is relevant to the economics of global health policy. One of the analyses in this study involved simulating full [[Trade liberalisation]]in Thailand (that is removal of all import tariffs in the Thailand economy). Although not all of the analyses presented in this study showed outright economic benefits from removing tariffs, this particular analysis suggested that, ==if trade was to be fully liberalised in Thailand (by removing all existing import tariffs on both food and non-food sectors), it would increase GDP by US$15bn over 20 years==. As you might expect from our discussion of taxes and tariffs in earlier sessions the removal of tariffs also changed the prices in the model of all the goods from which the tariffs are removed (including food). Changing prices, as mentioned in session 1, changes demand and the model therefore predicted that demand for many goods (including food goods) would change if tariffs were removed. Of course, if demand for food changes, it means that people are buying (and eating) different quantities and combinations of food, which affects health. The modellers were able to estimate the health impact of this change in food consumption/diet (by converting changes in food (and fat consumption) into health effects for the population) and including them in the CGE model. They concluded that ==removing tariffs would increase premature deaths from myocardial infarction (MI) and stroke by 6.7%.== In fact, the model was also able to distinguish that these adverse health impacts would be relatively larger for rural households than for those living in urban areas. ==The direct health-related costs (labour supply and healthcare costs) to the Thai economy from the additional cases of stroke and MI when tariffs were removed was estimated to be US$55.6mn (which is very small compared with the overall US$15bn GDP gains from removing the tariffs)==. Therefore, for this particular example, the modellers concluded that the current import tariffs which are used in the Thai economy are good for health: they have a protective effect on the Thailand population’s health (by influencing the price of food in a way which made people eat healthier than they would if there were no import tariffs). However, the analysis also suggested that tariffs were not justifiable as a cost-effective policy for health because the overall economic loss from imposing the tariffs was so much larger than the value of the health-related economic benefits which result from the healthier dietary consumption which occurred under the tariffs. This example is a helpful illustration of how ==economics and health policy interact in a globalised world==. ==Import tariffs affect what goods are imported into a country which, in turn, affects consumption and production in the importing country (not just of the imported good, but it will affect other goods/sectors also). Of course, the economies of the countries from which goods are imported are also affected (and this may affect production and/or availability of the good that is exported by the exporting country). Where imported and exported goods are risk factors for health, they may affect consumption/exposure of a population to that risk factor and it could be argued that it is not just the good which is imported/exported, but the effect that good has on health is also traded.== For this reason, CGE models are a very useful tool since they can be used to estimate both the direct health and macroeconomic impact of policies and interventions. However, as with the studies we have summarised, they have also been used to present health, environmental and other indicators for those policies interventions too. This gives a rich source of indicators which can be used for decision making from different (economic, health, environmental) policy perspectives at the national or global level, and there may be trade-offs whereby what is good for health, for example, may not be good for the economy as well. # 5. Integrating activity Look back at the activity you submitted earlier in this session (or an activity submitted by another student). Now that we have thought about a few modelling examples, can you think of any additional impacts of the policy/intervention that was posted which a policy maker might want to consider, this might include - Sectors which are indirectly affected by the policy/intervention - Environmental impacts - Demographic impacts (urban/rural, different population groups) Please post your ideas on Moodle. # 6. Summary - There a is a large global burden of NCDs which is fuelled by globalisation of the food market - There is a disconnect between the agriculture and food sectors in terms of policy goals - Diet is a major modifiable risk factor for NCDs - Macroeconomic modelling is a useful tool to assess the economic impacts of NCDs and economic policies which affect risk factors for health - Health, agricultural, environmental and macroeconomic effects interact together and there may be trade-offs between them # 7. References ## 7.1 [[Essential readings]] Moodie R, Stuckler D, Monteiro C, et. al. 2013. Profits and pandemics: prevention of harmful effects of tobacco, alcohol, and ultra-processed food and drink industries. Lancet 381: 670–79 [[@moodieProfitsPandemicsPrevention2013]] Hawkes C (2006). Uneven dietary development: linking the policies and processes of globalisation with the nutrition transition, obesity and diet-related chronic diseases. Globalization and Health 2:4 18 [online]. Available at http://www.globalizationandhealth.com/content/2/1/4 [[@hawkesUnevenDietaryDevelopment2006]] ## 7.2 [[Recommended reading]] #to-read Beaglehole R and Yach D (2003). Globalisation and the prevention and control of non-communicable disease: the neglected chronic diseases of adults. The Lancet 362(9387):903-908. [[@beagleholeGlobalisationPreventionControl2003a]] Hawkes C (2007). Promoting healthy diets and tackling obesity and diet-related chronic diseases: what are the agricultural policy levers? Food Nutr Bull. Jun. 28 (2 Suppl):S312-22. [[@hawkesPromotingHealthyDiets2007]] Suhrcke M and Urban D (2010). Are cardiovascular diseases bad for economic growth? Health Economics 19(12):1478-1496. [[@suhrckeAreCardiovascularDiseases2010]] #to-read Jensen, H., Keogh-Brown, MR., Smith, R.D., Chalabi, Z., et al., The importance of health co-benefits in macroeconomic assessments of UK greenhouse gas emission reduction strategies. Climatic Change, 2013:p. 1-15. [[@jensenImportanceHealthCobenefits2013a]] [[@daarGrandChallengesChronic2007]] Done