Now there's an idea with a slim chance of success

Glad to see I’m not the only economist putting out silly stories to suit the silly season. According to Brisbane’s newspaper of record, economist Paul Frijters (ex-ANU, now QUT) has called for a ‘fat tax’.

Queensland University of Technology’s Paul Frijters said introducing a user pays principle was the best way to curb the escalating costs of the obesity epidemic on the health system.

Professor Frijters urged the Federal Government to lift restrictions on health insurance companies to ask questions about a person’s weight and allow them to calculate increased premiums based on body mass index.

“Why should the whole population basically pay for the preventable actions which other people choose?” he said.

About 16 per cent of Australian men and 17 per cent of women are considered obese.

Obesity has been linked to a number of life-threatening conditions such as type 2 diabetes, high blood pressure and heart disease.

“There’s a much heavier use of medicine and there’s much heavier use of hospital care by obese people,” Professor Frijters said. “Obesity is so closely related to lifestyle choices and the costs associated with it are becoming so great that it’s no longer tenable to simply gloss over it.”

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26 Responses to Now there's an idea with a slim chance of success

  1. Joshua Gans says:

    Silly is the word. Let’s start with the “where will it end?” Answer: complete monitoring of all health-related effort.

    And then let’s go to “Is it even true that there is a disproportionate burden on the health system by obese people?” Seems it is unclear and certainly unclear it is related to the incentive-driven obesity. Compare that to sports injuries, drug use, driving, not driving, people who work in offices, people who don’t work in offices, alcohol use, being poor, oh yes, and childbirth (which can really stuff up women’s health). Is it really disproportionate?

  2. Peter says:

    Three questions which need answering before we run wildly off with this idea:

    1. Do obese people actually result in higher average health spending than the non-obese over the course of their lives? Since obese people typically die earler than the general population, just as smokers do, it is arguable that over the course of their shorter lives, they require less, and less expensive, medical care than the non-obese. People who die of diabetes don’t usually require decades of care for Alzheimers, for example.

    2. Is obesity preventable? Just because doctors say it is does not in fact make it so. Medical science is fond of blaming patients for the diseases they endure, and nearly always wrong. Stomach ulcers, for example, weren’t caused by stress as we’d been told by doctors for over 100 years, but by a bacterium; stress, of course, is the patient’s fault, and “preventable”. Heart attacks weren’t caused by Type-A Personality-types, but by a complex of factors, over which a patient has only limited control; there may even be a virus at work here, according to some researchers. Chronic fatigue syndrome (CFS) and RSI are real conditions, not examples of patients malingering, as medics first pronounced.

    The sudden increase in proportions of human obesity in the west over the last 3 decades may be due to many factors, only a few of which may be within the control of the patient. To say otherwise on the current medical evidence may be good medical practice but it is poor science, and very poor public policy.

    3. Does BMI actually measure obesity? Most professional athletes are obese by this measure. Despite its obvious and severe limitations, known for decades, the medical profession continues to use BMI. This fact says a great deal about the moral paucity of the medical profession.

  3. Russell says:

    Alternatively we could criminalise obesity. Obese people could then be made to do community service, some calorie burning activity like street sweeping, on the weekends.

  4. Ian Holsman says:

    FYI Life Insurance companies already have this.

  5. Private companies (ie the health insurance funds) should be allowed to impose any condition they like. They can then ask the questions raised by some of the commenters and decide whether higher charges for fat people make commercial sense or not.

    Given the link between obesity and low SES, the existing price signals may be sufficient to keep most of the fatties in the public health system, where health insurers don’t need to worry about them.

  6. conrad says:

    I’m with Andrew with this one — I don’t see why it shouldn’t be incorporated into insurance by private companies, as are many other things, including pre-existing conditions, gender, age, smoking status etc. I can’t see how obesity is somehow worse to include that any of these things.

    Peter: I think you are an apologist for people’s lack of self control. No doubt there are lots of factors causing obesity, some of which are genetic, some of which take years to change (like the long term effects of a sedentary lifestyle on metabolism), and there are certainly a small number of people who happen to be outliers for these things in terms of loadings on responsible factors. However, in the end, the idea that there are lots of factors responsible for things, some of which are out of the individuals control, can simply apply to everything (addictions, violence, etc.). If we accept that obesity is in this category, then I don’t see why we shouldn’t accept other behaviors too , in which case based on this argument being an alcoholic and beating your wife up should be fine.

  7. Patrick says:

    Does BMI actually measure obesity? Most professional athletes are obese by this measure‘ –

    professional props
    weightlifters
    sumo wrestlers
    powerlifters
    bodybuilders
    linebackers
    defensive ends, and
    baseball hitters

    but not

    tennis
    golf
    cricket
    AFL
    athletics
    hockey
    any other racket or bat sport except some baseballers
    martial arts
    motor sports
    any jumping event
    dancers
    swimmers
    divers
    skiers
    surfers
    netballers
    basketballers
    rugby backs, backrows and second rows
    yachtsmen and women
    runners
    soccer players
    gaelic footballers, or
    pelota players.

    If you added it up, you’d probably have about 99% of professional athletes in the ‘not’ category.

    In any case, first the number of professional athletes is statistically insignificant, and secondly the BMI is a readily calculable from widely available and collected data measure.

    see also: club troppo debates the same

  8. Paul Frijters says:

    The best analogy I can give is with car insurance. If you have a more expensive car that needs more maintainance you need to pay higher insurance. Similarly you’d often pay a higher life insurance premium when going on an adventure holiday rather than just going on a cruise. The principle that one should base incentives on the behaviour that causes the costs is a standard one in economics and I’m surprised to hear Joshua arguing against it.
    Is there any evidence for higher cost? Using the HRS data (peolpe between 51 and 71 in the US), it turned out obese people had a total medical expensiture bill per year that was about 1800 US$ higher. That’s a big number, equivalent to something like 10% of the total income of the average Australia.
    I think the main issue is simply that of numbers: if the numbers of people who are obese are very small, it makes sense for the rest of the community to simply carry their effect on total health costs. If the number of obese people becomes very high, say close to half the population, that solidarity wont be sustainable any more because the health cost differences just seem too great.

  9. Why stop at fatso’s. I’d impose a sports tax. Go into a public hospital ED on a saturday afternoon and night and see it full of idiot football players etc with broken arms ankles etc. Motor bike riders have a greater injury rate per capita than car riders. Squash players.

  10. Peter says:

    Conrad calls me an apologist for people’s lack of self-control. No, I’m a stickler for evidence-based medical decisions. If you can point me to scientific evidence which demonstrates beyond reasonable doubt that for the majority of patients, obesity is caused by individual lack of self-control, I will reconsider my argument. I don’t believe such evidence exists. Until I see it, I’ll stand by my claim that the cause(s) of the west’s current obesity epidemic has yet to be identified; being unidentified, one would be both naive and possibly reckless to design a public health policy based on a particular assumption as to the cause. Assuming the cause is individual fecklessness is, in addition, morally reprehensible.

  11. Peter says:

    On BMI — British newspapers last week reported that UK medics now consider many people with low (ie, non-obese) BMI levels to be actually “hiding” fat deposits between their organs, and thus also at risk from diseases commonly associated with obesity (such as diabetes). As well as showing the absurdity of the BMI measure as a measure of anything meaningful, no patient will now be safe from the medical police.

    First they came for the grossly obese people, and I said nothing. Then they came for the moderately overweight people, and I said nothing. Then they came for the thin people, . . .

  12. conrad says:

    http://scholar.google.com/scholar?q=causes+of+obesity+us&hl=en&lr=

    Read the last few paragraphs (Impact of environmental factors) of the first Nature article that appears — and those people are supporters of the idea that sticking food into your mouth is only a potentially small component of obesity. Note the phrasing, the references, and the fact that there is little dispute that eating the type of garbage people do in the Anglo-Saxon world leads to weight gain (even if more in some groups than others and even if some people are genetically lucky cf. genetically unlucky). Some of the other articles are far less kind on genetic factors, and point to the more popular belief (don’t excersize enough and eat too much).

    I might note again here more explicitly that there is far more evidence for factors that are not in people’s control and violence (mountains of it in fact), yet no-one gets away with that as an excuse — everyone is expected to overcome agression via self control. Thus the fact that person A has high testosterone, was constantly beaten as a child, and is borderline retarded doesn’t stop him going to jail when he assults person B.

    Thus the fact that people often agree that obesity is out of people’s control but violence is in it shows that it is not the strength of the evidence that people are using to make this judgment, but the consequences of the action, when logically for this arguement it should be just the strenght of the evidence (I did X because of Y based on evidence Z?). Given that almost everything has some genetic/environmental component, if we start denying that one factor in things like obesity is self-control, then I find it hard to imagine what I couldn’t do and blame on something/someone else.

  13. Paul Frijters says:

    I agree with Conrad. The medicalisation of obesity (i.e. blaming generic proclivities) with its inherent notion that people are not responsible for how much they weigh disempowers people.

  14. Tony Healy says:

    Airlines already apply a tax on the grossly obese, by requiring them to pay for a second seat if appropriate. In my view that’s a legitimate tax. This is not to discount the hurt felt by the French gentleman in the story, nor the social problem represented by extreme obesity.

    On the same theme of user pays, car insurers are experimenting with ways of adjusting premiums according to drivers’ car usage. Some drivers benefit from 25 percent lower premiums as a result.

  15. TB says:

    Patrick, I think you’re off the mark with the classifications of sportspeople who are, and aren’t, overweight according to the BMI. A quick perusal of the wallabies and nbl websites suggests that the majority of rugby players (not just props) and roughly half of b’ball players ARE overweight according to the BMI.

    As such, I think your estimate of 99% of professional sportspeople being ‘not overweight’ according to the BMI is far too high.

  16. derrida derider says:

    But Paul, the knowledge that some people are far more prone to obesity than others because of genetics or early childhood may disempower them, but it may also be the truth. Would you suppress that truth as being a socially harmful one?

    Your point that an obesity tax makes more economic sense as the percentage of the population who are obese rises may be true, but as that percentage rises it makes ever less political sense.

    And of course such a tax would be highly regressive, just like tobacco and alcohol excise. We’re clearly intent on taxing all the pleasures of the poor – smoking, gambling, drinking, eating. I suppose it will create powerful incentives not to be poor.

  17. Anthony says:

    I agree with TB: many AFL stars etc have a BMI that makes them technically ‘overweight’. Patrick, strictly speaking, was saying such athletes aren’t obese, but a lot of coverage of the so-called obesity epidemic subsumes overweight and obese within the same category, and suggests that anyone overweight (ie: with a BMI above 25) is somehow at risk. BMI currently serves as a poor proxy for ‘fat’ and fat as a poor proxy for ill health. Overall, our intolerance of diverse body shapes – regardless of whether technically ‘overweight’ people are fit or not – is probably contributing to the far deadlier problem of anorexa and other eating disorders amongst our adolescents

  18. Tony Healy says:

    TB was talking about rugby players, not AFL. Although it’s a side issue, AFL players are actually distinctive in being fit and lean compared with rugby players.

  19. Anthony says:

    Tony, go through an AFL grand final team listing that gives you the height and weight of the players and I bet you find a significant number who have a BMI that makes them ‘overweight’. Of course, they are fit, which just goes to show that BMI – on which the current moral panic around an obesity ‘epidemic’ is largely constructed – tells us little about people’s overall fitness and health.

  20. conrad says:

    I have thought of a more controversial example that should follow the same pattern — skin cancer.

    Ignoring race discrimation laws, the argument should be basically identical except the distinction needs to be done based on skin damage instead of weight. Thus you have a genetic basis (skin color) that interacts with lifestyle-choices (going in the sun), and both can be measured (skin damage vs. weight — although skin damage can’t be reversed).

  21. Russell says:

    Conrad – skin cancer can show up 20 or 30 years after the damaging exposure. Most of us who grew up in the 50s and 60s were burnt to peeling, blistering, lip-cracked, piebald ruin every summer – long before we ever heard about skin cancer.

    So it’s not like diet, where the consequences follow on quickly from the sins, and everyone knows that if calories in are a lot more than calories out, you’ll put on weight. The couple of BCCs I’ve had (so far) were just burnt off in the doctor’s rooms – no big deal, and what with all the running and swimmimg we did at least I didn’t get fat or suffer from ricketts!

  22. Patrick says:

    Anthony is right that I was only talking about obesity. I strongly doubt the AFL example, in fact, let’s see:

    Essendon FC
    Mark Bolton 23.9
    Brad Kepler 26.3
    Scott Camporeale 24.7
    Richard Cole 28
    Alwyn Davey 22.7
    Courtney Dempsey 20.6
    Ricky Dyson 24.2
    Dustin Fletcher 25.8
    Scott Gumbleton 24
    Chris Heffernan 24
    David Hille 26.7
    James Hird 25.2
    Tom Hislop 25.4

    avg= 26.7 Now they were chosen in the order they appeared on the club website, which should be random.

    So they are slightly ‘overweight’, but none of them are ‘obese’.

    But my main point was that professional athletes are such a tiny and unrepresentative sample that they aren’t worth the trouble I just took!

    Since the vast overwhelming majority don’t in a lifetime do one year’s training for a professional athlete, I think that BMI, whilst crude and not a medical analysis, is a fairly useful broad-trend indicator.

    After all, what do you think explains increasing BMI’s? Our national obsession with going to the gym???? Or people becoming fatter and less healthy?

  23. Pingback: Blog alert: a call for a ‘fat tax’ in Australia (Dec. 21, 2006) « Connecting Important Things

  24. I don’t offer any opinion on the proposal itself but it does surprise me to hear people describing a proposal to remove restrictions on businesses to price their products as they choose as a ‘tax’.

  25. Paul Frijters says:

    My answer to derrida is that the issue of genetics and obesity is a red herring. Even if it were true (which it is not) that all people who are obese share some genes that all people who are not obese do not have, it is still not the case that these genes cause obesity (despite the claims of some medics). A good analogy can be made with top swimmers: nearly all top swimmers look alike. They’re nearly all tall, aerodynamic, and have an appropriate fat-to-muscle ratio. Since all these traits are related to genetics, one could naive say that there are such genes as ‘swimming genes’. These genes do not cause swimming though for the simple reason that it is still a choice mediated by the environment that determines whether someone turns out to be a swimmer or not: you can be the world’s greatest potential swimmer in a genetic sense, but if there’s no water where you live you’d probably never know and never become a swimmer. Its the same with obesity: you may be genetically prone to find fattening food hard to resist and to easily give up on exercise, but its ultimately still your food and excercise choices that determine whether you are obese or not. A hundred years ago, when the gene pool was probably extremely similar to what it is now, obesity was a very rare occurence. Hence the same genes that are now held responsible for obesity by some medics did not lead to obesity in those diferent circumstances.
    The notion that this or that genetic make-up causes obesity is hence no more true than saying that this or that genetic genetic make-up causes you to be a swimmer or, indeed, a coal miner. To blame genes is fatalistic and is simply taking liberties with the truth.

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