Fatima Masse
Consultant
IMCO
/
Insight

Obesity: a Costly Epidemic for Mexico

Wed, 09/09/2015 - 13:23

Several indicators prove that Mexico faces an epidemic of overweight and obesity. The last National Survey of Health and Nutrition (2012) showed that almost 61 million Mexicans suffer from this problem, which is equivalent to 52% of the total population. Three in every ten adults are obese. This statistic makes Mexico the Organization for Economic Co-operation and Development (OECD) country with the second highest levels of obesity after the US. According to the Global Burden of Disease (GBD) 2010, high body mass index (BMI) is the main risk factor for developing non-communicable diseases such as diabetes, cardiovascular diseases, cancer (breast, colon and prostate, among others) and disorders in muscles and bones. Moreover, in the most recent edition of the GBD (2013), diabetes is the third cause of disability in Mexico.

Traditionally, obesity has only been studied from a health perspective. However, this risk factor also threatens the country’s economic competitiveness. This is because, firstly, non-communicable diseases require long-term treatments that are expensive and can become a huge burden on financial stability for both health institutions and families. Secondly, a sick worker is less productive and takes more days off, which harms firms and the economy in general. But, how big is the economic toll?

IMCO developed a simple methodology to measure the aggregated costs of obesity, based on national statistics, the GBD and economic theory. First we identified the number of cases and deaths of diabetes attributable to high BMI. Then, we estimated the monetary loss associated with said cases and mortality. These calculations are based on conservative assumptions, such as average income loss for productive years (not the value of statistical life).

We found that almost 60,000 deaths of patients who had been diagnosed with diabetes in 2012 were attributable to overweight and obesity. Around 45% of these happened in productive ages (15-65 years). Also we estimated that by 2012 there were almost 8.6 million people in the country living with diabetes. Half of whom are unaware they are sick. It is those 4.3 million that pose the greatest challenge, given that most of them will not go to the doctor until they develop some diabetes-related complication such as blurry vision, neuropathy or kidney failure, to name only a few. By the time they begin treatment, it is likely that procedures will be more expensive and their disability levels could be higher than they would have been had they sought care earlier.

In economic terms, we estimated that all the diabetes cases and deaths attributable to obesity generate social costs totaling over US$6 billion (MX$85 billion) each year. From this amount, 73% constitutes to medical treatment expenditure for those who know they are sick (either covered by the government in public services or by families that use private care). The rest comprises income lost due to premature mortality and absenteeism. The social costs that we found are not trivial. For example, they account for half the budget to build the new airport in Mexico City, one of the current administration’s main infrastructure projects, and probably one of the largest projects of its kind in recent history.

One of the main findings of our study was the impact overweight and obesity has on the labor market. Every year Mexico loses more than 400 million working hours due to diabetes that can be attributed to obesity (attaining medical services or physical discomfort). Each worker with this disease misses on average ten days of work per year due to his or her condition. In practical terms, this is the equivalent to almost 185,000 full-time workers, which accounts for 32% of all formal jobs created in 2014 (based on the Mexican Social Security Institute numbers). If nothing is done about this situation, by 2018 this number could increase by 14%.

According to the National Survey of Occupation and Employment 2014, 63% of total workers declared not having access to medical services. Despite the efforts that the government has made to increase health coverage, this statistic might reveal that not every Mexican has actual coverage due to waiting times or dubious quality. To quantify the resulting costs, we developed a simple analysis to quantify treatment costs in private healthcare for two scenarios measured over 30 years. The first scenario involves a person who has pre-diabetes and controls it with a balanced diet, exercise, and routine laboratory tests. The second one is a person who has pre-diabetes, but does not change habits and develops complications until eventual death.

In this second part of the analysis, we found that it is 20 times cheaper for a person to change habits than treat “complicated” diabetes. The accumulated loss for the first case adds up to US$7,000 (MX$92,000) in 30 years or an average of US$235 (MX$3,095) per year. Meanwhile, the accumulated loss for the second case adds up to US$150,000 (MX$1.9 million) over 30 years or an average of US$5,000 (MX$66,000) per year. An average worker in Mexico earns US$4,700 (MX$61,896) per year, meaning that the average worker’s total income is not enough to pay for the medical bills of “complicated” diabetes. This reality often leads affected families to bankruptcy. Based on our results, it seems that spending on obesity and associated non-communicable disease prevention is cost-effective, not only for the public sector but also for families themselves. The current administration has made considerable efforts to prevent and control this epidemic. Policies to this end are articulated through an ambitious national strategy that aims to tackle these issues from many angles. Today we are the only country in America with national taxes on sugar-added beverages and high-density calorie food. Recently, a labeling system for foods was established by law. Furthermore, rules to obtain a distinctive stamp for healthy products were recently approved. Also, there are many policies to improve children’s habits: a ban on publicity for food and beverage with high sugar content or fat on television and movie theaters before a certain time, rules for types of products sold in schools, and funding to install water dispensers in some public schools.

We have identified four elements that could undermine the government’s fight against obesity. These are: 1) very few resources dedicated to prevention, 2) low quality of health statistics, 3) a lack of mechanisms to guarantee coordination among different ministries and other levels of government, and 4) lack of incentives for companies to promote healthy lifestyles. To overcome these challenges, IMCO has four proposals. The first one is to increase the budget assigned to the national prevention strategy. For 2015, this program had a budget of over US$24 million (MX$320 million). This is equivalent to less than US$1 per person with overweight or obesity. However, taxes on sugar-sweetened beverages and high-density calorie food are projected to collect more than US$2.5 billion (MX$33 billion) in 2015, which is 100 times greater than the budget assigned to prevention actions. The budget should be consistent with the official public discourse that claims that dealing with this epidemic and non-communicable diseases are public health priorities.

The second recommendation is to improve health statistics. Today, the most complete source of data on health is the National Survey of Health and Nutrition. However, it is a survey that is only released every six years and does not comply with open data standards, for example it requires an account to download databases and some data has not been released three years after the survey was conducted. To make matters worse, administrative records from public institutions are extremely hard to compile, given the different information systems that each institution uses. The use of technology, such as electronic files with standardized formats, could help in gathering this data and facilitating its dissemination for proper study such as by disease and municipality.

The third recommendation is to create what we call a National System to Fight Obesity, as an institutional mechanism to coordinate different ministries and other levels of government. The implementation of some actions considered in the national strategy exceeds the sphere of competence of the Ministry of Health. For example, the regulation of food and beverages offered to children in schools should be a coordinated action between the Ministries of Health and Public Education. However, to this date there is no mechanism that can enforce this coordination or that is subject to public accountability. A mechanism to make the decision-making process more efficient must be introduced.

Lastly, the forth recommendation is to create incentives for firms to promote healthy lifestyles among their workers. Despite the fact that these initiatives can be extremely helpful, 99% of Mexican companies have less than 51 employees and it could be difficult for them to invest in these actions. Thus, financial and fiscal incentives designed for small and medium firms could be a first step. In conclusion, obesity is not only a matter of health. The dimension that this epidemic has reached could have disastrous repercussions. Therefore, investing in prevention may be a way of investing in a more productive future.