Obesity Crisis: How the Food Industry Profits While Society Pays

Sam Ali, DiversityInc, May 3rd, 2010

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By Sam Ali, Senior Business Editor

Children's Hospital in Philadelphia, one of the leading pediatric hospitals in the country, boasts that it's "100 percent smoke-free, inside and out."

But like many hospitals across the nation, it is certainly not fat-free.

Come breakfast, lunch and dinner, one can find med students donning crisp white lab coats, alongside fresh-faced volunteers, patients in hospital gowns and visitors queued up at the registers at McDonald's right in the lobby, sometimes six patrons deep, waiting to fill their orders of burgers, fries and Chicken McNuggets. The McDonald's is located right on the ground floor and the smell of grease wafts down the hall.

What's wrong with this picture?

A 2006 study published in the American Academy of Pediatrics estimates that fast-food restaurants can be found in nearly 30 percent of U.S. hospitals. This was published in a report by Corporate Accountability International, a consumer-advocacy group that has launched a campaign calling on McDonald's to retire Ronald McDonald as a spokesperson and get out of the nation's hospitals and schools.

"The medical community must practice what it's preaching," says Dr. Lenard I. Lesser, Robert Wood Johnson clinical scholar and family physician at University of California, Los Angeles, in the Corporate Accountability International report. "It is deplorable for a doctor to ask a patient to avoid harmful foods that cause heart disease while there is McDonald's in the hospital's lobby serving a menu that is mostly burgers, fries and soda."

A Major Strain on the Healthcare System

Indeed, the epidemic of overweight and obesity has been described as the fastest-growing public health challenge the nation has ever faced. Who's to blame? The fast-food restaurants and snack-food and beverage industries, like Big Tobacco, focus on consumer choice and personal responsibility as the cause of the nation's unhealthy diet.

But health advocates argue that these companies have a responsibility to consumers and to the nation's long-term health. There are racial and social-justice questions as well, since Blacks and Latinos are the largest consumers of fast-food products and, therefore, have a higher incidence of obesity-related diseases, including hypertension, cardiovascular disease, and Type 2 diabetes. Children are also being dramatically impacted as well, with frightening percentages of obesity and obesity-related diseases.

If Americans continue to pack on pounds, all that excess weight will cost the United States about $344 billion in medical-related expenses by 2018 as a tsunami of chronic preventable diseases are unleashed on the healthcare system, according to a joint report from United Health Foundation, the American Public Health Association and Partnership for Prevention.

These numbers are based on the projection that in 10 years, 43 percent of American adults may be obese–roughly 30 or more pounds over a healthy weight, according to the report.

Using weight data, census statistics and medical expenditure information, the study found:

*An obese person will have an average of $8,315 in medical bills a year in 2018, compared with $5,855 for an adult at a healthy weight. That's a difference of $2,460.

*Obesity]related direct expenditures are expected to account for more than 21 percent of the nation's direct healthcare spending in 2018.

*If the percentage of obese adults stays at the current rate of 34 percent, then excess weight will cost the nation about $198 billion by 2018.

*If the obesity rate continues to rise until 2018, then Colorado may be the only state with less than 30 percent of residents who are obese.

*More than 50 percent of the population in several states could be obese by 2018: Oklahoma, Mississippi, Maryland, Kentucky, Ohio and South Dakota

The report adds to the growing body of evidence of obesity's impact on medical costs. Another study released in July showed that obese Americans cost the country about $147 billion in weight-related medical bills in 2008, double what it was a decade ago. Much of that was financed by Medicare and Medicaid, government health insurance for seniors and families on low incomes, the report says. Obesity-related medical bills now account for about 9.1 percent of medical spending, compared with 6.5 percent in 1998.

"The medical costs attributable to obesity are almost entirely a result of costs generated from treating the diseases that obesity promotes," says the report's lead author Dr. Eric Finkelstein, director of the Public Health Economics Program at North Carolina—based RTI International, a research institute. He says as long as obesity prevails to the extent that it does today, it will continue to be a significant burden on healthcare.

Younger Americans Getting Fatter, Sicker

Adult obesity rates have doubled since 1980, from 15 percent to 30 percent, and childhood obesity rates have nearly tripled since 1980, from 6.5 percent to 16.3 percent, according to a Robert Wood Johnson Foundation report, "F as in Fat: How Obesity Policies are Failing in America."

According to the report, the health-related consequences of obesity, including diabetes, coronary heart disease, high blood pressure, strokes, elevated cholesterol intake, cancer and other adverse health effects, are dire.

Approximately 20 million Americans have Type 2 diabetes, and another 54 million more have pre-diabetes, putting them at high risk for developing diabetes. About 1 in 4 Americans have some form of heart disease, and 1 in 3 Americans have high blood pressure.

*Obesity and overweight are contributing factors to more than 20 chronic diseases, including some cancers, arthritis and even Alzheimer's disease and dementia.

Today, obese children and teenagers are developing obesity-related diseases, including diabetes, coronary heart disease, high blood pressure, elevated cholesterol and Type 2 diabetes–that were formerly only seen in adults, the report says.

*For instance, approximately 176,500 people younger than 20 have Type 2 diabetes, and 2 million adolescents ages 12—19 have pre-diabetes.

*The percentage of obese and overweight children (ages 10—17) is at or above 30 percent in 30 states. Mississippi had the highest rate of obese and overweight children, at 44.4 percent. "Overall, this generation of children could be the first to have shorter, less healthy lives than their parents," the report says.

The Prevalence of Fast Food & Soft Drinks in Black and Latino Neighborhoods

But obesity is not an equal-opportunity killer. It is often the poorest and most deprived citizens and neighborhoods that suffer the most.

In fact, the prevalence of obesity for Blacks is 51 percent higher than for whites, according to the Centers for Disease Control and Prevention. And the prevalence of obesity among Latinos is 21 percent higher than for whites.

Not surprisingly, the fast-food, snack and soft-drink industries actively target Black, Latino and inner-city communities. "There is much more outdoor advertising in communities that are (Black) and Latino and in lower-income communities versus affluent communities and white communities for fast food and sugary beverages,'' says Dr. Antronette K. Yancey, a professor in the Department of Health Services at UCLA School of Public Health, who studied the prevalence of obesity-related outdoor advertisements in cities such as Austin, Los Angeles and Philadelphia. "There is 10 times more advertising for food, period, than there is for anything related to physical activity."

Thirty percent of Burger King's 1998 sales were from Blacks and Latinos. In the same year, "25 cents of every $1 spent at McDonald's" was spent by Black and Latino consumers, says Philadelphia attorney Jonathan Scott Goldman in a paper published in the Temple Political & Civil Rights Law Review. (McDonald's and Burger King have not released more current internal marketing data that would reflect Black and Latino consumption of fast food.)

"These numbers are neither surprising nor accidental,'' says Goldman. "Minority consumers are actively sought by the fast-food industry.''

Indeed, inner-city communities are saturated with fast-food restaurants–which is ironic, considering that up until the 1980s, "fast-food chains assiduously avoided inner-city neighborhoods," says Regina Austin, a law professor at the University of Pennsylvania School of Law.

A study of fast food restaurants such as Church's Chicken, Pizza Hut, Subway, Burger King and Taco Bell in pre-Katrina New Orleans found that predominantly Black neighborhoods had 2.4 fast-food restaurants per square mile, while white neighborhoods only had 1.5 fast-food restaurants per square mile.

When "Super Size Me" hit theaters in 2004, Austin says she couldn't help but notice the absence of any Blacks or Latinos in the movie. The low-budget documentary, inspired by a highly-publicized class-action lawsuit against McDonald's, Pelman v. McDonald's, was created by independent filmmaker Morgan Spurlock to chronicle his month-long experiment eating nothing but McDonald's and the measurable toll it took on his physical health.

But Austin, who is Black, was struck by the irony of Spurlock positioning himself as the all-American, fast-food-eating everyman–white, male, college-educated. In fact, she couldn't help but notice that all the people gorging on the greasy, salty, sweet, processed fast food in the movie "Super Size Me" were white.

"The man who drank gallons of soda a day, developed sudden blindness from undiagnosed diabetes, and underwent physique-transforming gastric bypass surgery is white," says Austin. "So too are the middle-school students who ate French fries and drank canned sodas for lunch every day … a substantial majority of the interviewed passers-by appear to be white. Latinos are scarcer than Blacks. There are no Black women in the film, as least as far as the eye can discern."

"The prevalence of fast food in low-income urban neighborhoods across the United States, combined with the lack of access to fresh, healthy food, contribute to an overwhelmingly disproportionate incidence of food-related death and disease among (Blacks and Latinos) as compared to whites," writes attorney Andrea Freeman in the California Law Review article, "Fast Food: Oppression Through Poor Nutrition."

Indeed, the two plaintiffs in the Pelman lawsuit–the case that inspired Spurlock to ultimately embark on his film–were Black and lived in the Bronx. At the time the suit was brought in August 2002, Ashley Pelman was 14 years old, 4-feet-10-inches tall and weighed 170 pounds. Her 19-year-old sister Jazlyn Bradley was 5-feet-6-inches tall and 270 lbs.

"If Spurlock had taken his camera to the Bronx, he would likely have seen a higher percentage of overweight and obese people, particularly women, than he captured on the streets of Manhattan, where his office and apartment are located, given the incidence of obesity and overweight among the racial and ethnic minorities who comprise the majority of the population of the Bronx," Austin says.

The population of the Bronx is 15 percent white, 31 percent Black, 48 percent Latino, Austin says. It has the highest rate of obesity in New York City.

Similarly, John Robbins, author of "The Food Revolution," notes:

*The hypertension (high blood pressure) rate among Blacks compared with whites in the United States is 40 percent greater.

*The heart-disease rate for Latino women compared with white women in the United States is double.

*The diabetes incidence among Latino men compared with white men is 53 percent greater.

*The diabetes incidence among Black men compared with white men is 69 percent greater.

By focusing on portly white patrons in upstate New York and mostly white sunbathers at the public beach on Coney Island, Spurlock ignored a very obvious and tragic point: The geography of obesity and disease in this country is largely the geography of poverty and race in America. And the fast-food industry plays a pivotal role in drawing this map and driving the epidemic of obesity and diet-related disease.

Taking Its Toll on the Entire Country

But while Blacks, Latinos and young children suffer the harshest effects of this poor nutrition, obesity and food-related death and disease, the obesity epidemic affects the entire nation.

Current projections for healthcare costs attributable to obesity and overweight are that they will more than double every decade, according to the Robert Wood Johnson Foundation.

"By 2030 … healthcare costs attributable to obesity and overweight could range from $860 billion to $956 billion, which would account for 15.8 to 17.6 percent of total healthcare costs, or one in every six dollars spent on healthcare," the foundation says.

And the indirect costs of overweight and obesity often fall most heavily on employers in the form of increased absenteeism, disability, presenteeism (when employees come to work in spite of illness, which can have similar negative repercussions on business performance), and workers' compensation.

According to the report: Obese employees cost private employers approximately $45 billion a year as a result of medical expenses and excessive absenteeism. Obese people pay 36 percent more for healthcare and 77 percent more for medication when compared with normal-weight people. These increases are higher than the costs associated with smoking or drinking. *Obese workers had 183.63 lost workdays per 100 full-time employees, compared with normal-weight workers, who had 14.19 lost workdays per 100 full-time employees.

Industry Under Fire

Facing scrutiny from nutrition groups, public health professionals, and state and national legislators sponsoring bills that could have a powerful impact on its business, "Big Food," a pejorative term often applied to the fast-food, snack and beverage industry in general, has gone on the defensive. The industry is devoting considerable resources to public relations as its primary weapon to influence public opinion and neutralize calls for government intervention.

Collectively, the industry asserts that they offer consumers a broad range of serving sizes and choices that can be combined to create meal combinations that fall within recommended guidelines for calories, fat, sodium and other important nutrients. They say they offer nutrition information on their menus, emphasize moderation and physical activity and do not encourage consumers to overuse their products.

"To suggest that any single business or group of businesses is responsible for the obesity problem is at best inaccurate, and, at worst, irresponsible," says McDonald's spokesperson Danya Proud. "We're proud of the taste, quality, value and variety our menu provides."

For its part, Burger King says that "it's committed to helping our guests eat and live better by promoting balanced diets and active lifestyle choices." Click here to see fast-food companies' responses.

A number of bills are also winding their way through Congress that could impact the food industry's future. A Senate Agriculture Committee unanimously passed the $4.5-billion Healthy, Hunger-Free Kids Act on March 24. The bill, which now moves on to the full Senate for a vote later this year, would provide an additional $4.5 billion to child-nutrition programs over the next 10 years and will also target the nation's childhood-obesity epidemic by setting new nutritional standards for school-lunch programs.

The healthcare bill targets the food industry as well, requiring chains with 20 outlets throughout the country to put nutrition labels on their food, according to Marion Nestle, a professor in the Department of Nutrition, Food Studies, and Public Health at New York University and author of the popular blog, Food Politics.

"It also covers vending machines," Nestle says. "These are great steps. Calorie labeling has two effects. It educates anyone who is interested to look and think about it. And it encourages chain restaurants to offer lower-calorie options."

The Food and Drug Administration is also beginning to crack down on misleading labeling on food packages, saying that some items labeled "healthy" are not, and dozens of states and local lawmakers are backing efforts to tax sugary beverages to cover obesity-related health costs. But how effective any of these initiatives are remains to be seen.

Fast-food giants such as McDonald's spend enormous sums of money on public relations and political contributions, sending their lobbyists to work for elected officials, and through their trade associations, they shape public health legislation. The food industry also enjoys influential positions in surprising places, according to Kelly Brownell, a psychology professor at Yale University, and Kenneth E. Warner, who recently published a report comparing the legal, political and business strategies employed by the food and beverage industry to those used by U.S. tobacco giants.

"The American Dietetic Association (ADA), which, in its own words, is devoted to improving the nation's health, promotes a series of Nutrition Fact Sheets," they write. "Industry sources pay $20,000 per fact sheet to the ADA and take part in writing the documents; the ADA then promotes them through its journal and on its web site."

"By contrast, ordinary consumers [such as] Ashley Pelman and Jazlen Bradley give little if any money to politicians," says Goldman. "For this reason, individual citizens do not have anything approaching the influence over our elected government that the fast-food corporations can afford."

He adds, "The corporate special interests now control Washington, D.C., and the ordinary people are disorganized, disenfranchised and out of the political loop. While this is not how our government was meant to work, this is the current political reality."