Health Impact and Cost-Effectiveness of Financing Fruit and Vegetable Subsidies with a Sugar-Sweetened Beverage Tax in the US: A Micro-Simulation Study

Abstract Objectives Financial incentives and disincentives are effective tools for improving food purchases and health. Healthy food subsidies have only been considered for vulnerable populations and can be costly, while sugar-sweetened beverage (SSB) taxes can be considered financially regressive and punitive. The potential joint health and economic impacts of combining these approaches at a national scale have not been evaluated. Methods A validated microsimulation model, CVD PREDICT, was used to estimate reductions in CVD events, diabetes cases, gains in quality-adjusted life-years (QALYs), costs, and cost-effectiveness of a national U.S. fruit and vegetable subsidy fully or partly financed by SSB excise tax revenue ($0.01/tsp of added sugar). For the fully financed subsidy, cost could not exceed net tax revenue; while for the partly financed subsidy, costs were greater and ensured that taxes paid did not exceed subsidies received in either low or high income subgroups. Model inputs included national demographic and dietary data from NHANES 2009–2014; policy effects on consumer intakes, industry responses, and diet-disease effects from meta-analyses; and policy costs (tax and subsidy implementation, subsidy costs, industry reformulation), and health-related costs (formal/informal healthcare costs, productivity costs) from published sources. Findings were evaluated over 10 years and lifetime, with costs (in constant 2019 USD) and QALYs discounted at 3% annually. Results Both the fully and partly financed joint intervention was estimated to be cost-saving, compared to a base-case scenario accounting for gradual voluntary SSB industry reformulation. At 10 years, the fully financed intervention would prevent approximately 1.11M CVD events, 0.14M CVD deaths, and 0.34M diabetes cases, gain 0.87M QALYs, generate 1.49B net revenue, and save $56B in formal healthcare costs. Corresponding values for the partially financed intervention were 1.42M, 0.17M, 0.34M, 1.18M, −13.9B, and $65B. Estimated benefits and cost-savings were approximately 4–15 fold higher over a lifetime. Conclusions A joint national strategy combining revenue from an SSB excise tax to fully or partially finance fruit and vegetable subsidies could generate substantial health gains and cost-savings for the US, while minimizing government spending. Funding Sources NIH, NHLBI.