Incentivizing healthy foods could save Medicare and Medicaid more than $100B

Government payer programs are groaning under the weight of continually rising healthcare costs, but promoting healthy foods may be one potential solution.

According to CMS, Medicare spending growth is expected to average 7.4 percent between 2018 and 2027. The story is not much better for Medicaid, which is projecting 6 percent year-over-year spending growth between 2020 and 2027.

In response, CMS has increasingly looked at ways to influence health outside of the clinic. Some examples include the launch of the CMS Accountable Health Communities Model, which connects high-risk patients with care navigators, and the recent pitch by HHS Secretary Alex Azar for hospitals to cover housing costs with Medicaid dollars.

Another instance was the $25 million allocation in the 2018 Farm Bill to pilot financial and non-financial methods of improving healthier eating.

New research published in PLOS Medicine has found that incentivizing a better diet by subsidizing healthy foods for Medicare and Medicaid beneficiaries could have huge potential health effects, leading to cost savings in excess of $100 billion.

The study weighed two different policy initiatives: a 30 percent subsidy on fruits and vegetables – and a 30 percent subsidy on broader healthy foods which includes whole grains, seafood, nuts, plant oils, along with fruits and vegetables.

Based on the researchers’ simulation, the former program would prevent nearly 2 million cardiovascular disease events, save roughly $40 billion in healthcare costs and lead to an increase of 4.64 million quality-adjusted life years (QALY).

Widening the food subsidies past just food and vegetables has an even larger effect, preventing 3.28 million cardiovascular disease events, saving $100.2 billion in formal healthcare costs and helping patients gain 8.4 million QALYs.

According to the research, the subsidies would drive fruit and vegetable intake by more than 40 grams per day, equating to about 0.4 servings per day.

Lifetime policy costs for the subsidy programs would be $122.6 billion and $210.4 billion, respectively. Average estimated annual subsidy costs would be around $110 and $185 per person, depending on the program.

Based on these figures, the policies are cost effective, equating $18,184 per QALY for the fruit and vegetable program and $13,194 per QALY for the larger healthy food subsidy program. This compares favorably to the $50,000 per QALY willingness to pay threshold.

Using incentives to improve diet as a pathway to better overall health is an idea that has gained steam in recent years, driven by the direct connection between unhealthy eating and conditions like heart disease, stroke and Type 2 diabetes.

California approved a three-year $6 million program in 2017 to provide chronically ill patients with two delivered meals and snacks, as well as three counseling sessions with a registered dietitian over 12 weeks.

Hospitals have also started to experiment with prescription food programs that allow clinicians to prescribe healthy foods which patients can receive at a discount or a covered benefit.

“Medicare and Medicaid are the two largest healthcare programs in the U.S., together covering one in three Americans and accounting for 1 in every 4 dollars in the entire federal budget,” Dariush Mozaffarian, the dean of Tufts University Friedman School and one of the study’s lead authors, said in a statement.

“These new findings support the concept of Food is Medicine: That innovative programs to encourage and reimburse healthy eating can and should be integrated into the healthcare system.”

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