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Rebates a cost-effective way to boost healthy eating among low-income people, study finds

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CHAMPAIGN, Ill. — Providing low-income households that receive federal food assistance benefits with financial incentives to buy fruits and vegetables would encourage them to purchase and consume more healthy food, and slightly increase their longevity, a new study suggests.

Despite some critics’ concerns, these incentives, in the form of rebates for purchasing healthy foods, are unlikely to prompt consumers to increase their spending on junk food as well, according to University of Illinois kinesiology and community health professor Ruopeng An.

An evaluated the cost effectiveness of the Healthy Incentives Pilot, an experimental initiative that offered a 30 percent rebate to participants in the Supplemental Nutrition Assistance Program when they bought targeted fruits and vegetables at participating retailers. SNAP, formerly known as Food Stamps, provides food assistance benefits to more than 46 million Americans – or more than one in five people – nationwide. The program is administered by the U.S. Department of Agriculture.

University of Illinois kinesiology and community health professor Ruopeng An evaluated the cost effectiveness and health benefits of implementing a rebate program for low-income households that receive federal food assistance. Credit: Photo by L. Brian Stauffer

University of Illinois kinesiology and community health professor Ruopeng An evaluated the cost effectiveness and health benefits of implementing a rebate program for low-income households that receive federal food assistance. Credit: Photo by L. Brian Stauffer

In response to a mandate in the 2008 Farm Bill, the USDA implemented HIP in one Massachusetts county from November 2011 to December 2012 to assess whether making targeted fruits and vegetables more affordable for SNAP households would impact consumers’ purchase and consumption of healthy foods.

For every dollar of SNAP benefits that the 7,500 participating households spent on targeted fruits and vegetables – including fresh, frozen, dried or canned fruits and vegetables without added sugars, fats, oils or salt – they received a rebate of 30 cents.

In a paper published in the journal Social Science and Medicine, An evaluated the feasibility of rolling out HIP to SNAP households nationwide. An calculated the expected monetary costs to society, the projected gains in participants’ life expectancy, and the cost-effectiveness ratio of HIP compared with competing healthy-diet policies.

According to the USDA’s final report, the HIP trial run increased SNAP participants’ fruit and vegetable consumption by 0.48 servings per person per day.

“There is evidence that a nationwide expansion of HIP is likely to nudge SNAP households to eat more fruits and vegetables,” An said, but added that changes in consumer behavior are always proportional to changes in prices. “Even a large incentive like HIP, which provides a 30 percent rebate, closes only a very small fraction – less than 18 percent – of the gap between the number of servings of fruits and vegetables that consumers eat and the targeted amount set by federal officials in the Healthy People 2020 campaign.”

In the Healthy People 2020 initiative, federal officials sought to increase American adults’ intake of fruits and vegetables to five or more servings per day.

An, who recommends that HIP be implemented for SNAP recipients nationwide, found that HIP’s cost-effectiveness ratio is very high, compared with other dietary initiatives such as the federal nutrition labeling law.

An said alternative polices aimed at improving Americans’ diets have either not been passed into law; were struck down on appeal, as were taxes on junk food and sugar-sweetened beverages; or were found to have limited impact on consumer behavior, as were regulations banning new fast-food restaurants in South Los Angeles and a menu labeling law for chain restaurants.

The average household participating in HIP earned about $3.65 in incentives monthly. Although some scholars speculate that the additional income provided by healthy eating rebates such as HIP might prompt recipients to buy more junk food as well, An said the monetary gains for most households are rather small, making that outcome “very unlikely.”

An’s estimates included a one-time implementation cost of $5 and an annual cost of $44 in HIP incentives, per SNAP household, based on 2012 U.S. dollars.

If all SNAP participants nationwide received the HIP incentive at the age of 30 and stayed in the program throughout their lifetime, the federal government’s discounted costs would increase by an average of $1,323 per capita, by An’s calculations.

Examining the incentive’s impact on health-adjusted longevity, An estimated that HIP participants would gain 20.083 quality-adjusted life years, compared with 20.001 QALYs gained by SNAP recipients not receiving the incentive.

A quality-adjusted life year is an estimate of the societal value and cost effectiveness of a medical intervention that considers the impact on both longevity and quality of life. Scientists allocate one QALY for one year of life in perfect health, and zero QALYs for death.

For U.S. populations, researchers estimate a willingness-to-pay threshold of $50,000 to $100,000 per QALY gained. The lower the cost of each QALY gained, the more cost effective an intervention is deemed to be.

An estimated the HIP incentive, if expanded to all SNAP households nationwide, would have a cost effectiveness ratio of $16,172 per QALY gained – significantly below the $50,000 to $100,000 threshold.