Overweight and Obesity

in Asia & the Pacific:

Facts, Consequences and Fiscal Policies for Better
Health

Matthias Helble
Senior Economist, Co-Chair, Research Department
Asian Development Bank Institute
20/03/2018

Copyright © 2016 by Asian Development Bank Institute. All rights reserved.

 Motivation
Better understand the obesity crisis:
• Prevalence
• Determinants
• Costs for ADB DMCs
• Policies for ADB DMCs

Think about policies:

• Inside health system
• Outside health system
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Key takeaways:
1. In Asia and the Pacific economic growth has been followed
by rapid increase in overweight and obesity.
2. Both conditions cause high direct and indirect costs for
households, firms and governments.
3. ADBI estimates costs 12.4 % of total health care
expenditures or 0.8% of gross domestic product.
4. People in poorer countries suffer most from obesity.
5. Fiscal policies to curb obesity complemented by other
measures.

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1. What we know about obesity:
Prevalence and Determinants
 Prevalence Rate of Obesity and Overweight
Asia-Pacific is becoming fatter...
by regions of ADB DMCs
Overweight Obesity
.6

.6
Prevalence rate
.4

.4
.2

.2
0

East South East South Central Pacific 0 East South East South Central Pacific

1990 2000 1990 2000

2013 2013

Source: Global Burden of Disease Study, 2013 (simple average)

Source: Global Burden of Disease Study 2013. Simple average.
5
Women and Men not equally affected...

Source: IHME (2016) avaible at: http://vizhub.healthdata.org/obesity/

6
 Including South-East Asia...
70.0

60.0

50.0

40.0

30.0 1990
2013
20.0

10.0

0.0

Source: Global Burden of Disease Study, 2013 (simple average)

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The poor are catching up quickly...

Source: Aizawa and Helble (2016)

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Main determinants:
• Biological factors (ex. age, genetic predisposition)
• Education and individual preferences
• Social factors (ex. being married, behavior of peers)
• Economic growth (more food at relatively cheaper price available)
• Urbanization (Asia latecomer in urbanization)
• Economic transformation (higher degree of services’ industry)
• Food transition (ex. availability of softdrinks, fast food)

9
2. What we want to know:
Costs of Obesity
in Asia and the Pacific
Overweight as major risk factor...
DALYs Loss Attributable to High BMI, both Sexes, All Ages, ADB Member
Countries, 2013

Source: Kosen (2017)

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Overweight as major risk factor for diabetes...

Estimated Growth Rate of Diabetes from 2000 to 2030

by regions of ADB DMCs
150
Growth rate %

100
50
0

East South East South Central Pacific

Source: WHO.

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Costs of Overweight and Obesity
Direct costs: Health care costs (medical expenditures)
• Health care costs associated with obesity vary between 2-5 % in Europe and
between 5-8 % in the United States.
• Medical expenses 2,741 USD higher for obese Americans (Cawley and
Meyerhoefer, 2012, JHE).
• Studies for Asia:
Authors Country Year Costs as % of health Absolute costs
spending
Zhao et al, 2008 PRC 2003 3.7 % 2,74 billion USD
Ko, 2008 Hong Kong 2002 8.2–9.8 % 430 million USD
Kang et al, 2011 Korea 2005 - 1,1 billion USD
Lee et al, 2012 Korea 2011 4.6 % 2,128 billion Won
Pitaya. et al, 2014 Thailand 2009 1.5 % 725 million USD
Source: Helble and Francisco (2017)
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Costs of overweight and obesity (BMI ≧ 25)

Direct costs:
Higher health care costs (medical expenditures) for the
person and health care system.

Indirect costs:
All costs due to absenteeism from work, lower
productivity at work, disability costs and costs due to
higher mortality.

Total Costs = Direct Costs + Indirect Costs

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 Costs of Overweight and Obesity
• Few studies for developing Asia
• Some recent studies:

Author(s) Country Year Type of Costs as % of Absolute costs

cost health spending

Zhao et al, 2008 PRC 2003 D+I 3.7 % 2,74 billion USD
Ko, 2008 Hong Kong 2002 D+I 8.2–9.8 % 430 million USD
Lee et al, 2012 Korea, Rep. 2011 D - 2,13 billion Won
Lee et al, 2015 Korea, Rep. 2013 D+I - 6,77 billion Won
Chung, 2017 Korea, Rep. 2013 D - 0,54 billion Won

Pitaya. et al, 2014 Thailand 2009 D+I 1.5 % 725 million USD

Source: Helble and Francisco (2017)

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Direct costs in Asia and Pacific
Main data challenges:
• Few countries with data on costs of medical procedures
• Few countries with household level data on medical
expenditures available

Solution:
• Collect sparse data and check for correlation with deflators,
e.g. GDP per capita.
• Approximation of direct cost based on existing data for
developed countries (e.g. Japan) and adjusted for lower GDP
per capita.

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Direct costs in Asia and Pacific

Step 1: Check for cost of medical procedures across Asian

countries and correlation with GDP per capita
• Examples: Heart bypass, angioplasty and heart valve
replacement
• Countries: India, Korea, Malaysia, Singapor, Thailand, USA
• High correlation (above 0.7) between cost of medical procedures
and GDP per capita.

Step 2: Find estimate for representative developed country

• Japan: Average of 430 USD direct costs of obesity
• Use GDP per capita to adjust to different income levels
• Adjust for actual health care expenditures in countries
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Direct Costs in South East Asia

% of Total Health
Country Value Care % of GDP
Brunei 76,900,000 16.27 0.43
Cambodia 2,415,455 0.27 0.02
Indonesia 450,000,000 1.68 0.05
Lao PDR 1,429,996 0.66 0.01
Malaysia 1,090,000,000 8.40 0.34
Myanmar 5,002,899 0.39 0.01
Philippines 145,000,000 1.17 0.05
Thailand 640,000,000 3.80 0.15
Viet Nam 53,500,000 0.44 0.03

Source: Helble and Francisco (2017)

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Indirect costs of overweight and obesity
• Based on the disability-adjusted life year (DALY) metric from
the 2010 Global Burden of Disease (GBD) study.
• DALYs measure the life lost due to premature death
(mortality) as well as the time lived with disability (morbidity).
• Calculated as the sum of years of life lost due to premature
mortality (YLL) in the population and the equivalent of
healthy years lost due to disability (YLD):
𝐷𝐴𝐿𝑌 = 𝑌𝐿𝐿 + 𝑌𝐿𝐷
• DALY represents a year loss of healthy life.
• Method developed by Institute for Health Metrics and
Evaluation (IHME)
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Indirect costs of overweight and obesity

Diseases included in DALYs:

Real contribution of
Risk Factor Proportion from
Disease BMI>=25 to DALY
Attribution (%) Total DALY (%)
(%)
1 Ischemic heart disease 15.63 6.76 1.06
2 Stroke 19.56 8.73 1.71
3 Diabetes 40.99 3.19 1.31
4 Liver cancer 9.99 2.26 0.23
5 Breast cancer 11.86 0.54 0.06
6 Esophagus cancer 14.59 0.86 0.13
Gall bladder & Biliary tract
7 cancer 11.28 0.15 0.02
8 Hypertensive heart disease 29.83 0.96 0.29
Total 4.79
Source: Helble and Francisco (2017)

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Indirect costs for South East Asia:
Country DALY all Contributio Productive % of health Percentage
diseases n of years lost care of GDP
overweight due to expend.
& obesity obesity
Brunei 72,185 0.81 585 5.5 0.1
Cambodia 5,736,940 0.31 17,795 2.0 0.1
Indonesia 72,340,657 1.05 1,771,258 10.4 0.3
Lao PDR 2,635,899 0.42 11,002 8.1 0.2
Malaysia 63,836,217 0.09 59,586 4.9 0.2
Myanmar 19,078,657 0.52 99,270 9.0 0.2
Philippines 28,205,496 0.73 204,948 4.6 0.2
Singapore 763,405 0.50 3,852 1.6 0.1
Thailand 19,075,344 0.47 89,665 3.3 0.1
Viet Nam 21,840,038 0.27 58,439 0.9 0.1
Source: Helble and Francisco (2017)
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 Total costs for South East Asia (2013)
Country Estimated direct Estimated indirect
costs % of health costs % of health
care expend. care expend.
Brunei 2.2 5.5
Cambodia 1.1 2.0
Indonesia 1.5 10.4
Lao PDR 1.1 8.1
Malaysia 2.0 4.9
Myanmar 1.3 9.0
Philippines 1.4 4.6
Singapore 1.5 1.6
Thailand 1.7 3.3
Viet Nam 1.1 0.9
Source: Helble and Francisco (2017)

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Costs of Overweight and Obesity
Indirect costs (absenteesim, lower productivity, disability and
mortality costs)
• Higher level of absenteeism observed in United States and
European countries (e.g. Bungum et al, 2003; Wolfenstetter et al,
2011; Neovius et al, 2012)
• Relationship stronger for women than for men (Finkelstein et al,
2005).
• Obesity-related job absenteeism costs US business 4.3 billion USD
(Cawley, 2007, JOEM).
• Lower productivity costs US business 31 billion USD every year
(Finkelstein et al., 2010).
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3. Policies to Fight Obesity
Multifaceted Policies to Curb Obesity
Improve intake of food and nutrition:
• Healthy school foods
• Regulate advertising of unhealthy foods
• Nutritional labelling
• Zoning of restaurants
• Taxes on unhealthy foods (ex. sugar tax)
Promote physical activity and healthy lifestyle:
• Make physical activity easier, safer, and more attractive
• Reduce TV watching and videogaming
• Use new technologies (e.g. Pokemon Go)
• Incentive schemes in health insurance

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Fiscal Policies

• WHO Technical Report on Fiscal Policies on Diet:

• Fiscal policies can promote healthier diets
• Strongest evidence for taxes on sugar-sweetened beverages (SSB
tax)
• 20% or more will change consumption patterns
• Studies on US suggest elasticity of -1.21 (i.e. for each 10% change in
price, a -12.1% change in consumption).
• Low and middle-income groups show strongest reaction (Powell,
2009)
• However, effect on weight loss small (Lin et al. 2011).

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Asian Countries with SSB Taxes or Plans
Obesity (adult Overweight
Countries SSB Policy Status
2016) (adult 2016)
China 6.2% 32.3% Discussing option of introducing SSB tax

Brunei Darussalam 14.1% 41.2% Implementing tax on SSB (2017)

Maldives 8.6% 30.6% Has import tarrifs on energy and soft drinks

Initiated modelling and recommendations in place for

Sri Lanka 5.2% 23.3%
design and implementation of SSB tax
Thailand 10.0% 32.6% SSB tax in place (2017)
Indicated interest and Initiated discussion on possible
Indonesia 6.9% 28.2%
SSB taxation
India 3.9% 19.7% Excise tax on SSB
Passed legislation and now implementing SSB taxation
Philippines 6.4% 27.6%
(2017)

Modelling initiated and recommendations in place for

Vietnam 2.1% 18.3%
design and implementation of SSB tax
Singapore 6.1% 31.8% Discussion on SSB tax
Malaysia 15.6% 42.5% Discussion on SSB tax

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Price of Foods

Source: Powell et al. (2013)

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Pathways for the effect of fiscal policy interventions

Source: WHO (2015)

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Fiscal policy development and
implementation framework

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Source: WHO (2015)
Conclusion

• Specific excise tax (where a set amount of tax is charged on a

given quantity of the product) is most effective.
• SSB taxes based on sugar content more difficult to administer
compared the SSB tax based on volume
• Earmarking of tax revenue should be used to improve the health
care system adn encourage healthier diets
• Monitoring and evaluation of SSB tax is important to know
effectiveness.
• Policy coherence needed (education strategy, limiting marketing
for children, etc.)

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Many thanks.

Questions?