Strategy and forward thinking

The ReThink Health Dynamics Model, developed in the USA, utilises systems thinking and agent-based modelling ¹Homer, J., Milstein, B., Hirsch, G. B., & Fisher, E. S. (2016). Combined regional investments could substantially enhance health system performance and be financially affordable. Health Affairs, 35(8), 1435-1443 to enable health planners to envision changes to the health system, see the effects unfold and learn from the results. A model such as this holds promise for designing health promoting services as tool for service delivery and for creating a dialogue with different sectors, service providers, and citizens.²Hirsch, G., Homer, J., Milstein, B., Scherrer, L., Ingersoll, C., Landy, L., & Fisher, E. (2012). ReThink Health Dynamics: Understanding and influencing local health system change. In 30th International Conference of the System Dynamics Society, St. Gallen, Switzerland (Vol. 80).

 

ReThink Health Dynamics Model The ReThink Health (RTH) Dynamics Model is a fictive regional health system in a computer. By simulating a health system's respons to changes, it lets leaders see which investments will do the most to save lives, reduce costs, improve quality, enhance equity, and boost productivity. The model can help discover a new path to system transformation. It lets you ask 'what if' questions and get the results instantly to see how various strategies are likely to unfold. With a diverse menu of initiatives and financing options, everyone can test their own ideas and track results across scores of measures. Designed by an award-winning team of MIT-trained system modellers, the RTH Dynamics Model brings together decades of evidence and is regularly updated to reflect the latest research and input from users.

 

The ReThink Health Dynamics Model, representing a US region (city, county, or larger), simulates changes in population health, health care delivery, health equity, workforce productivity, and health care costs by quarter year increments from 2000 to 2040. This is done within a single, testable framework tied to many sources of empirical data and open to sensitivity analysis. It is a compartmental stock-and-flow structure with causal feedback, built according to the principles of system dynamics.

 

The model divides the population into ten subgroups by age (youth, working age, seniors), socioeconomic status (advantaged or disadvantaged, based on household income above or below 200 percent of the federal poverty level), and insurance status (yes or no) for youth and those of working age. The model simulates changing health states as they are shaped by unhealthy behaviours, crime, environmental hazards, poverty, lack of insurance, aging, and the quality of care. Together, those drivers affect physical illness (mild and severe), mental illness (treated and untreated), acute clinical episodes (urgent and nonurgent), and deaths.

 

The model considers financial incentives from different payment schemes (such as fee-for-service versus global payment) along with the program cost and return on investment for each simulated initiative. If an intervention does save health care expenditures, model users might choose to reinvest a fraction of those savings in an effort to sustain or expand the initiatives over time.

 

The model contains more than twenty options for simulating the likely effects of efforts to alter health risks, health care delivery, provider payment, or program financing. Each strategy can be simulated individually or in combinations. The model rests on data from more than a dozen national sources, along with numerous studies in the literature on health services, health economics, and population health. It can be calibrated to represent a particular region using available local data and small-area estimates.

In 2011, to improve Hungarian health statistics as well as to make some funding available for the health service staff, the Hungarian Minister for Health suggested to introduce a tax on unhealthy food and beverages. The food industry fiercely opposed the tax, and even complained to the European Commission saying that the planned measures would harm the industry. However, the Minister of Health was ready to respond and a working group created to examine the national data on population health delivered strong evidence to support the introduction of a new tax.

 

The new tax was introduced in September 2011 and included sugar-sweetened beverages, energy drinks, confectionery, salted snacks, condiments, stock cubes, flavoured alcohol and fruit jams. The targeted food product prices rose by an average of 29%. At the same time, sales of taxable products fell by an average of 27%. Overall, the impact assessments concluded that consumers changed their eating habits and tax revenues contributed to the increase of wages for 95,000 health workers.

 

In addition to the support for the tax from health NGOs and medical staff, teachers in Hungary pushed for the energy drinks to be covered by the tax. They expressed their concerns about the direct correlation between the consumption of energy drinks among pupils and poor behaviour at school.

 

Initially, the national media was unsupportive of the tax and sided with the industry claiming that the measure was discriminatory. As a response, the public health sector launched several campaigns, organised several conferences and actively engaged with the media to explain the positive impact on health that the tax could bring³ Giles, A., Costigan, D., Graff, H., Stacey, R. & Modi M. (2019). Case study: The Hungarian public health product tax. UK Health Forum http://ukhealthforum.org.uk/wp-content/uploads/2019/01/Hungary.pdf.

 

The first impact assessment conducted in 2012 showed that around 40% of unhealthy food products manufacturers changed their product formulas either reducing (28%) or eliminating (12%) unhealthy ingredients. At the same time, since the introduction of the tax, legislation had to be reviewed five times to close the loopholes permitting manufacturers to replace taxed ingredients with other tax-exempt unhealthy ingredients.

 

A 2015⁴IbidWHO analysis concluded that a fiscal instrument can play an effective role in improving a population's nutrition behaviour. However, the Hungarian tax is not a silver bullet for addressing poor nutrition or a budget shortfall. Healthier products due to product reformulation are a positive consequence of tax avoidance.

 

A key outcome of the tax was increased nutrition literacy, and improved nutrition behaviour beyond the direct impact of the price increase. Intersectoral action enabled accurate problem definition, development of an appropriate policy solution, and effective implementation. Continuous refinement of legislation after initial enactment was essential for exposing and shutting loopholes, ensuring tax’s effectiveness. ⁵Giles, A., Costigan, D., Graff, H., Stacey, R. & Modi M. (2019). Case study: The Hungarian public health product tax.  UK Health Forum

 

There are four intended benefits of a sugar tax⁶Backholer, K., & Martin, J. (2017). Sugar-sweetened beverage tax: the inconvenient truths. Public health nutrition, 20(18), 3225-3227. , they:

reduce consumption through a price increase and produce subsequent public health benefits;

generate revenue, that could be reinvested solely into prevention measures;

emphasise that regular consumption of sugary drinks is not part of a healthy diet; and

incentivise manufacturers to reformulate products to reduce sugar content.

In terms of research outcomes, the 2017 Healthy Ireland survey showed that 16% of adult population drank sugar sweetened drinks (SSDs) daily. Almost half of 13 year olds consume SSDs at least once per day, while males, young people and those from lower socio-economic groups are the most frequent consumers.

 

The Institute of Public Health, Ireland was requested by the Department of Health to undertake a Health Impact Assessment (HIA) of the proposed tax. As part of this assessment, a stakeholder engagement event was organised with representatives from a range of sectors, including the health and the food and beverage industries. In addition, a review of current literature and a modelling exercise were also carried out.

 

The HIA concluded that:

SSDs are a source of energy intake with little or no nutrient value;

Price increases tend to decrease demand, but the degree to which this happens is variable;

There is a positive relationship linking consumption of SSDs to overall energy intake;

A 10% tax on sugar sweetened beverages could reduce the number of obese adults in Ireland by 10,000. This reduction would be greater in young people and regular consumers.

 

A public consultation process was also engaged by the Department of Finance in order to determine views in relation to the design, scope and practical implementation issues of the tax. This process received 30 submissions, which are published on the Department of Finance website.

 

Finally, the Health Research Board commissioned an opinion poll with adults in Ireland on the topic of SSDs. This research revealed that 44% of purchasers would buy SSDs less frequently if the price increased by 10%, while 34% would not change their purchasing behaviour. 40% also stated that they would switch to diet drinks if they were cheaper than SSDs. Women were more likely to respond to this price change than men.

 

Per the Irish budget for 2018, it was estimated that this tax would generate €30 million by the end of 2018 and €40 million within one full year. In 2018, following its inception in May, the tax produced €16.5 million in revenue. Figures released in July 2019 show that the tax had produced €15.8 million in revenue in 2019 so far. The funds generated through this tax are allocated to general funds as hypothecation (the dedication of a specific tax for a particular expenditure purpose) is not a feature of the Irish tax system.

 

The full case study of the Sugar Sweetened Drinks Tax is available here.

Early research from the sugar tax in Mexico has had two noteworthy findings:

The tax on sugar sweetened beverages was associated with reductions in purchases of taxed beverages; ⁷Colchero, M. A., Popkin, B. M., Rivera, J. A., & Ng, S. W. (2016). Beverage purchases from stores in Mexico under the excise tax on sugar sweetened beverages: observational study. bmj, 352, h6704.

Purchases of untaxed beverage increased 2.1 percent in the first two years following the introduction of the tax.⁸Colchero, M. A., Rivera-Dommarco, J., Popkin, B. M., & Ng, S. W. (2017). In Mexico, evidence of sustained consumer response two years after implementing a sugar-sweetened beverage tax. Health Affairs, 36(3), 564-571.  In Mexico, two years after the introduction of a tax on sugary drinks, households with the fewest resources reduced their purchases of sugary drinks by 11.7%, compared to 7.6% for the general population.

A different type of governmental funding via taxes is the Politique gouvernementale de prevention en santé in Quebec, Canada, which is funded by taxes on tobacco. The government of Quebec has developed an inter-ministerial action plan that aims to increase structured upstream action on social determinants of health (SDOH) to improve health, to decrease the incidence of avoidable health problems, and to reduce health inequalities within the province.

 

This is a pan-governmental policy and multi-year action plan that binds the commitment of 15 ministries and governmental organisations from various sectors. The policy and action plan foster collaboration, complementarity, synchronisation and coherence of ministry interventions. It consists of concrete ministerial measures designed and operationalised to affect the individual and environmental dimensions that make a population healthy: lifestyle, schooling, land use, housing, income, working conditions, living environments, and organisation of the health and social services systems.

 

The taxes from tobacco sales are key to funding the prevention plan and none of the revenue from tobacco taxes is directed to the tobacco industry.

 

This study examined sugar-sweetened beverage (‎SSB)‎ taxes in the WHO European Region, which are recommended as part of government efforts to prevent noncommunicable diseases (‎NCDs)‎ such as cardiovascular diseases and diabetes. The aim was to better understand factors that support the uptake of SSB taxes at national level in order to support policy-making in other countries both in the WHO European Region and more broadly. Information was taken from policy documents, media, national statistics and interviews with 20 policy-makers.

 

Taxes were in place in Belgium, Finland, France, Hungary, Ireland, Latvia, Monaco, Norway, Portugal and the United Kingdom. The taxes were excise taxes or levies in all cases: that is, they were applied to industry rather than consumers. Although all taxes applied to carbonated soft drinks containing sugar, some also included products such as sweetened milk, juice and artificially sweetened beverages. More recent taxes tended to apply higher tax rates to beverages with higher sugar content. The taxes were implemented in the context of health policy commitments to prevent NCDs, which present a major health burden. In seven countries a priority was also to increase government revenue. The introduction of SSB taxation was supported by collaboration between health and tax policy-makers and was strongly opposed by the beverage industry, although the policy process was also influenced by external industry and public health stakeholders. Policy-makers continued to work to improve the taxes in response to new evidence and experiences of SSB taxation in other countries.

 

Read the full report here.