RAND Review News for Winter 2009

  • Lowering Sodium Consumption Could Yield Large Societal Savings
  • Rapid Growth in Health Care Costs Hurts U.S. Industries
  • Retail Medical Clinics Perform Well Relative to Other Medical Settings
  • Europe and Australia Offer Lessons in Building Efficiency
  • NGOs Can Play Larger Roles in Long-Term Human Recovery
  • Price Is an Important Lever to Reduce Alcohol Consumption in Europe

Lowering Sodium Consumption Could Yield Large Societal Savings

Reducing Americans’ average intake of sodium to the amount recommended by health officials could save the nation billions of dollars annually in avoided health care costs and improve the quality of life for millions of people, according to a RAND study published in the September/October edition of the American Journal of Health Promotion.

Excessive consumption of sodium is a persistent health problem in the United States, causing increased rates of high blood pressure and related illnesses such as cardiovascular disease. The Institute of Medicine recommends that adults consume no more than 2,300 milligrams of sodium each day, with lower amounts recommended for groups that are at higher risk: older adults, African-Americans, and those with high blood pressure. However, the authors estimate that the U.S. average daily consumption is roughly 3,400 milligrams per day, much higher than the recommended limits.

The study — one of the first to estimate the economic benefits of lowering sodium consumption among the U.S. public — estimates that meeting national sodium guidelines could eliminate 11 million cases of high blood pressure nationally (see the table). Moreover, meeting sodium consumption guidelines would save, in just one calendar year, 312,000 quality-adjusted life years — a research measurement that adjusts increased longevity for the relative healthiness experienced during those additional years of life. The monetary value of the improved quality of life would be an estimated $32 billion annually.

Generally Speaking, the Lesser the Sodium Intake, the Greater the Societal Savings

Average Sodium Consumption (milligrams per day) Societal Savings Relative to Estimated Average Sodium Consumption Among U.S. Residents of 3,400 Milligrams per Day
Cases of Hypertension Reduced (millions) Direct Health Care Costs Saved in 2005 (billions of dollars) Annual Quality-Adjusted Life Years Saved
2,300 (upper limit recommended by Institute of Medicine) 11.1 $17.8 312,000
1,700 14.9 $23.8 417,000
1,500 16.4 $26.2 459,000
1,200 17.7 $28.3 497,000
SOURCE: “Potential Societal Savings from Reduced Sodium Consumption in the U.S. Adult Population,” American Journal of Health Promotion, Vol. 24, No. 1, September/October 2009, pp. 49–57, Kartika Palar, Roland Sturm.
NOTES: “Estimated average sodium consumption” is based on a RAND analysis of data from the National Health and Nutrition Examination Survey (NHANES), 1999–2004. NHANES is a federal study that routinely assesses the health and nutritional status of adults and children in the United States.

“This study provides an important first step toward quantifying the benefits of reducing the intake of sodium by the American public,” said Kartika Palar, the study’s lead author and a graduate fellow at the RAND Pardee Graduate School. “These findings make a strong case that there may be value in pursuing a population-based approach to sodium reduction.”

Researchers calculated that lowering sodium intake could also trim nearly a third of the $55 billion spent nationally each year to treat high blood pressure. Moreover, about half of the $18 billion in annual health care cost savings would accrue to public-sector health spending. The total savings estimates are conservative, because researchers were not able to directly calculate the savings for cardiovascular disease, including heart attack and stroke, for which sodium consumption plays a less-defined role.

“Our results are driven by the fact that nearly 30 percent of the nation’s population has hypertension,” said coauthor Roland Sturm. “One of the reasons hypertension is so pervasive is that sodium consumption is so high.”

Researchers say that better strategies for lowering sodium intake across the nation’s population still need to be developed. Studies estimate that more than 75 percent of Americans’ dietary sodium intake comes from processed foods rather than from salt added during cooking at home or at the dining table. Restaurant food is also generally high in sodium.

Population-based strategies that have been discussed include redesigning food-labeling information to better highlight sodium levels, having manufacturers voluntarily lower sodium levels, and adopting regulations that would require food processors to reduce the use of sodium. square

[Back To Top]

Rapid Growth in Health Care Costs Hurts U.S. Industries

The rapid growth in health care costs in the United States is linked to job losses and lower gross economic output among industries that commonly provide workers with health insurance, according to a RAND study published online in the journal Health Services Research.

The study is the first to assess the economic effects on U.S. industries of “excess” growth in health care costs, defined as the increase in health care costs that exceeds the overall growth in the nation’s gross domestic product (GDP). The study examined the economic performance of 38 industries from 1987 through 2005, comparing changes in employment, gross economic output, and the value added to the GDP for industries in which a large portion of workers have employer-sponsored health insurance to those industries in which few workers have such insurance.

The study found that excess growth in health care costs has adverse effects on employment, output, and value added to GDP — and that the effects are worse for industries in which high percentages of workers have job-based health insurance. For example, industries in which a larger percentage of workers received health insurance had significantly lower employment growth during the study period than did industries in which health benefits were less common.

Workforces Grew More Slowly in Industries in Which Higher Percentages of Workers Have Employer-Sponsored Health Insurance

Workforces Grew More Slowly in Industries in Which Higher Percentages of Workers Have Employer-Sponsored Health Insurance
SOURCE: “Employer-Sponsored Insurance, Health Care Cost Growth, and the Economic Performance of U.S. Industries,” Health Services Research, Vol. 54, No. 5, Part 1, October 2009, pp. 1449–1464, Neeraj Sood, Arkadipta Ghosh, José J. Escarce.

As shown in the figure, which plots the 38 industries, the workforce in the construction industry, in which only 43 percent of workers were given health insurance, grew about 2.1 percent. In the hotel industry, which provided health insurance to 54 percent of workers, the workforce grew about 1 percent. But in the utilities industry, in which 84 percent of workers were given health insurance, the workforce shrank by 2.8 percent.

“This study provides some of the first evidence that the rapid rise in health care costs has negative consequences for several U.S. industries,” said Neeraj Sood, the study’s lead author, a RAND senior economist and an associate professor at the University of Southern California. “Industries in which more workers receive job-based health insurance are hit the hardest by rising health care costs.”

Researchers underscore that their findings do not necessarily mean that rapid growth in health care costs results in large job losses in the overall economy, because losses in industries that provide a high proportion of their workers with health insurance are likely to be at least partially offset by gains in industries that provide a low proportion of their workers with the insurance.

“Still, our findings clearly show that the rapid rise in health care costs has a measurable impact on many industries and that it leads to a redistribution of workers from industries that provide insurance to their workers, such as manufacturing, to those that do not provide insurance,” explained study coauthor José Escarce, a RAND researcher and a professor at the David Geffen School of Medicine at the University of California, Los Angeles.

The study does not assess the relative effects of employer-sponsored insurance on the overall economy in the United States compared with alternative approaches to financing and providing health insurance, such as the public system in Canada. Rather, what the study demonstrates is that the U.S. approach hurts the economic performance of some industries more than others. square

[Back To Top]

Retail Medical Clinics Perform Well Relative to Other Medical Settings

Retail medical clinics located in pharmacies and “big box” stores such as Wal-Mart can provide care for routine illnesses at a lower cost and similar quality as offered in three other typical medical settings, according to a RAND study published in the September 1 edition of the Annals of Internal Medicine.

“The study findings provide more evidence that retail clinics are an innovative way of delivering health care,” said lead author Ateev Mehrotra, a professor at the University of Pittsburgh School of Medicine and a RAND researcher.

The study examined retail clinics relative to physician offices, urgent care facilities, and emergency departments, evaluating the quality of care provided and the costs per episode of care for three common acute conditions — middle ear infections, sore throats, and urinary tract infections — and assessing whether the use of retail clinics discouraged preventive care.

As the figure shows, the quality scores for retail clinics were equal to or higher than those for other care settings. The quality of medical care was judged using 14 indicators of quality and determining whether patients received preventive care services, either during the initial visit or over the subsequent three months, for the three conditions examined.

For Routine Illnesses, Retail Medical Clinics Score Well on Three Dimensions of Care

For Routine Illnesses, Retail Medical Clinics Score Well on Three Dimensions of Care
SOURCE: “Comparing Costs and Quality of Care at Retail Clinics with That of Other Medical Settings for Three Common Illnesses,” Annals of Internal Medicine, Vol. 151, No. 5, September 1, 2009, pp. 3217–328, Ateev Mehrotra, Hangsheng Liu, John L. Adams, Margaret C. Wang, Judith R. Lave, M. Marcus Thygeson, Leif I. Solberg, Elizabeth A. McGlynn.

The costs of treating the illnesses were substantially lower at retail clinics than in the three other settings, especially emergency departments. The differences were caused primarily by lower payments for professional services and lower rates of laboratory testing. Prescription costs per episode were similar across the four settings.

There has been concern that patients who visit retail clinics might be less likely to receive preventive care than are patients who receive similar care at physician offices. The study found that the rates of preventive care received were similar for patients at retail clinics and physician offices. In fact, for patients who visit a retail clinic, the preventive care was typically delivered in a physician’s office, suggesting that the clinics are not disrupting traditional opportunities for preventive services.

Researchers caution that their findings might not adequately represent the care provided at all retail medical clinics. The study was conducted only in Minnesota, among insured patients, and among patients of only one retail clinic chain. Moreover, the findings could be influenced by unmeasured factors, such as whether patients who are less sick and who need less-intensive services seek care at retail clinics rather than going to one of the other medical providers.

Still, “the results we have seen thus far suggest retail medical clinics provide high-quality care in a convenient and cost-effective fashion,” Mehrotra said. square

[Back To Top]

Europe and Australia Offer Lessons in Building Efficiency

The United States can become more energy efficient and generate more “green” jobs by learning from some of the strategies used by the European Union and Australia to create more energy-efficient buildings, according to a RAND study.

More than a third of the energy consumed in developed countries is used to heat, cool, and light buildings or is utilized within the buildings. As shown in the figure, each type of occupied commercial building in the United States used hundreds of trillions of British thermal units (Btu) in 2003. The good news is that commercial buildings offer opportunities to achieve substantial, relatively low-cost improvements in energy efficiency.

Among Types of U.S. Commercial Buildings, Office Buildings Consumed the Most Energy in 2003

Among Types of U.S. Commercial Buildings, Office Buildings Consumed the Most Energy in 2003
SOURCE: Energy Information Administration, Commercial Buildings Energy Consumption Survey (CBECS), Washington, D.C.: Department of Energy, June 2006, Table C1A.

However, the building sector has unique characteristics that make designing energy efficiency policies particularly challenging: Transfers of ownership are infrequent, capital costs are high, and the variability of design and location make energy-efficiency comparisons difficult. Often, owners must bear the costs of efficiency improvements, while the savings accrue to tenants.

The study focused on the potential roles of building codes, energy efficiency ratings, public buildings, expert training and certification, and the issuance of tradable “white certificates” — or rights to consume. The experiences of Europe and Australia suggest that effective policies to promote energy-efficient buildings can be designed using information disclosure, building codes, financial incentives, and benchmarking. But the rollout of such policies and their consistent implementation pose special challenges.

“Incentives may be needed to improve the energy efficiency of older, poorly performing buildings where the biggest aggregate gains are to be made,” said Charles Ries, the report’s lead author and a senior RAND fellow.

The study reaches several conclusions of interest to U.S. policy- makers. First, it will be easier for building-materials manufacturers to standardize their products if there is regional consistency in energy-efficiency requirements. Second, energy-performance certificates should be understandable and meaningful enough to affect marketplace behavior. Third, widespread efficiency gains are possible only through retrofitting and making operational improvements to existing buildings.

Fourth, public buildings should continue to serve as a test bed for energy-saving ideas and should promote awareness of energy-efficiency in buildings. And fifth, energy-efficiency programs for buildings can play an important role in a cap-and-trade program for reducing carbon dioxide emissions.

“Investments in renovation and energy-aware construction should also be part of a green jobs strategy,” said Ries. square

For more information:

Improving the Energy Performance of Buildings, RAND/TR-728-RER/BOMA, ISBN 978-0-8330-4787-8, 2009.
[Back To Top]

NGOs Can Play Larger Roles in Long-Term Human Recovery

Nongovernmental organizations (NGOs) like the United Way and the American Red Cross have proven that they can be invaluable community assets after a disaster, but their roles are poorly defined and frequently not supported by state and federal guidelines, according to a RAND study. Focusing on Louisiana four years after Hurricane Katrina, the study reports on the lessons learned by leaders of NGOs in the Gulf Coast region in supporting the often overlooked area of long-term human recovery.

“Recovery is more than just restoring roads and buildings. Human recovery includes rebuilding people’s social routines and a community’s support networks.”

Tulane University student Mary Kilpatrick weeds a community garden near a storm-resistant house built by the Make It Right foundation.
AP IMAGES/PATRICK SEMANSKY
On August 29, 2009, the fourth anniversary of Hurricane Katrina’s striking the Gulf Coast, Tulane University student Mary Kilpatrick weeds a community garden near a storm-resistant house built by the Make It Right foundation in the Lower 9th Ward of New Orleans.

“What we’re seeing in New Orleans and other communities devastated by Hurricane Katrina is that recovery is more than just restoring roads and buildings,” said Anita Chandra, lead study author and a RAND behavioral scientist. “Human recovery includes rebuilding people’s social routines and a community’s support networks — actions that help restore a community’s physical and mental health.”

Long-term human recovery is especially complex following multiple disasters, such as those that occurred in Louisiana, which was hit by Hurricanes Katrina and Rita. In such cases, disaster planning, response, and recovery are parts of an ongoing cycle, not linear processes with clear transitions from planning to implementation to recovery. Rather, long-term recovery entails infrastructure and human elements that can overlap. As this recovery is achieved, it is also possible to develop greater community resilience for the next disaster.

The study found that there is no national operating plan to support long-term human recovery. Moreover, the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act — designed to coordinate disaster relief and recovery through the Federal Emergency Management Agency, state and local agencies, and NGOs — meets the needs of small disasters but can create roadblocks for communities with long recovery periods.

For example, the act does not identify NGO case management and services as eligible expenses for federal aid. The act also requires states affected by multiple disasters to provide matching funds (which often stifles human recovery) and penalizes communities for rebuilding “smarter” in the long-term recovery phase (such as by rebuilding a facility in a more secure location as opposed to simply rebuilding the facility where it was).

The study recommends that NGOs be allowed to enter into contracts with state agencies before a disaster strikes and to provide long-term human recovery services, for which there are only limited provisions in the Stafford Act. “The state and federal governments must recognize that it may take years, not just months, for a community to truly recover from a disaster,” said Joie Acosta, the study’s coauthor and an associate behavioral scientist at RAND. square

For more information:

The Role of Nongovernmental Organizations in Long-Term Human Recovery After Disaster: Reflections from Louisiana Four Years After Hurricane Katrina, RAND/OP-277-RC, ISBN 978-0-8330-4882-0, 2009.
[Back To Top]

Price Is an Important Lever to Reduce Alcohol Consumption in Europe

Changes in alcohol pricing policy in the European Union (EU) could help reduce alcohol-related harms, according to a RAND Europe study.

Europe has the highest proportion of drinkers and the highest levels of alcohol consumption per person in the world. The high levels of alcohol consumption recorded in the EU have been linked to a number of public health and other problems, including violence and crime, diseases such as liver cirrhosis, lost productivity and absenteeism, family breakdown, and accidental deaths.

Despite extensive evidence that raising alcohol prices reduces consumption on a societal level, the trend is that the real value of alcohol taxation and the real price of alcoholic beverages are decreasing across the EU. At the same time, incomes have increased, making alcohol even more affordable.

The RAND Europe study finds that the affordability of alcoholic beverages in the region has increased since the mid-1990s — in some countries by over 50 percent (as the figure shows). This change, as also shown in the figure, was driven primarily by changes in income and only to a limited extent by changes in the relative price of alcohol.

Alcohol Affordability Is Increasing Across Europe, but the Key Driver Is Rising Incomes, Not Alcohol Prices

Alcohol Affordability Is Increasing Across Europe, but the Key Driver Is Rising Incomes, Not Alcohol Prices
SOURCE: EUROSTAT and author calculations.
NOTE: Alcohol affordability is defined as a ratio of real disposable income to the real price of alcohol.

The study also shows that there is a positive relationship between alcohol affordability and alcohol consumption in Europe, with a 1 percent increase in affordability leading to a 0.22 percent increase in consumption. In turn, increased consumption is positively associated with three types of harms for which reliable data are available: traffic injuries, traffic deaths, and liver cirrhosis.

The study thus provides evidence that pricing policy could be an effective policy lever to reduce alcohol-related harms.

However, “to the extent that a public health strategy focuses on alcohol prices alone, such as by trying to keep prices relatively constant, and does not take into account increases in income that drive up affordability, alcohol pricing policies may fall short of the aim of curbing consumption and harms,” said Lila Rabinovich, the study’s lead author. square

For more information:

The Affordability of Alcoholic Beverages in the European Union: Understanding the Link Between Alcohol Affordability, Consumption, and Harms, RAND/TR-689-EC, 2009.
[Back To Top]