Sugary Drink Tax Good for Health Care Costs, Public Health: Study

A proposed sweetened-drink excise tax in Seattle “will prevent thousands of cases of childhood and adult obesity, prevent new cases of diabetes, increase healthy life years and save more in future health care costs than it costs to implement,” according to researchers at Harvard’s T.H. Chan School of Public Health. The Childhood Obesity Intervention Cost-Effectiveness Study (CHOICES) focused on the impact of the proposed tax on the health and wellness of Seattle residents.

“Our analysis looks beyond revenue and finds that this excise tax on sweetened drinks can generate significant prevention of new cases of obesity, diabetes, improved quality adjusted life years and health care cost savings,” noted the lead investigator of the CHOICES project, Dr. Steven Gortmaker, who is also director of the Harvard Prevention Research Center and a professor of the practice of health sociology at the Chan School of Public Health. “It is our intent that these findings serve as a source of research-based information surrounding potential health impacts of sweetened-beverage taxes.”

The study additionally found:

• The tax would cause many consumers to switch to water or other unsweetened drinks, so that sweetened-drink consumption would fall by nearly 19 percent. (Berkeley, Calif., where a tax has been in effect since early 2015, experienced a 21 percent reduction in sugary drink consumption among low-income communities.)
• Over a one-year period, once the tax reaches its full effect, it would lead to a 4 percent reduction in diabetes incidence, meaning that every year, 105 fewer people wouldn’t develop diabetes. According to CHOICES, consuming an 8.5-ounce sweetened beverage daily raises a person’s risk of diabetes by 18 percent.
• By lowering consumption of sweetened drinks, the tax would prevent 3,170 cases of obesity over 10 years.
• The tax would save Seattle $29 million over 10 years, attributable to health care cost savings from lower rates of obesity and chronic diseases

Beverage companies and retailers have spoken out against the Seattle measure, which they say could cause layoffs and declines in business across the city. Local purveyor Jones Soda noted: “This kind of a tax will impact us in a big way, as well as our peers, our partners, our distributor partners. It doesn’t do enough to educate people about nutrition.”

The Seattle proposal of $.0175 cents per ounce aims to raise an estimated $24.7 million annually. Seven cities and counties – Philadelphia; Cook County, Ill.; Boulder, Colo.; and Berkeley, Albany, Oakland and San Francisco, Calif. -- have already passed sweetened-drink taxes.