Researchers study true costs of mandatory health programs
7 May 2015
Health economists are using the tools of consumer behaviour to determine the true costs of mandatory public health programs, in work that will have implications for policy makers, industry and consumers.
Governments are increasingly turning to mandatory programs to improve health, on the grounds that they offer high health benefits and are cost–effective.
But a group of UTS researchers is investigating whether public health program funding decisions are based on the true cost, if the loss of consumer choice is not considered.
Supported by a three-year, $350,000 ARC grant, a group from the Centre for Health Economics Research and Evaluation (CHERE) at UTS Business School has begun a study that will help governments and regulators determine whether – and how – restricting choice should be explicitly considered.
“From the health point of view, you might say it looks like ‘a good buy’. But if you take into account the choice you are taking away from people, if you value that loss of choice, that may change the equation,” says Professor of Health Economics and Director of CHERE Rosalie Viney.
"...if you value that loss of choice, that may change the equation”
In an early pilot study, the CHERE team looked at compulsory vaccination, fortification of bread with folic acid, and banning trans fats from foods.
“Using discrete choice experiments, we found that some people strongly opposed mandatory vaccination to the extent that they would value their loss of choice in the hundreds of dollars,” says Associate Professor Stephen Goodall, who is leading the project.
On the other hand, there was only a small response to compulsory fortification of bread with folic acid, and no price signal for the removal of trans fats.
In discrete choice experiments (DCE), people are given hypothetical but realistic sets of choices, each alternative set containing a different group of attributes and levels. In this way, researchers can drill down into the most important drivers for a decision.
Now in the first phase of the ARC project, Prof Viney, Assoc Prof Goodall and Research Fellow Elena Meshcheriakova are collaborating with Food Standards Australia New Zealand (FSANZ) to consider this issue in the context of mandatory labelling of food that has been irradiated.
Food irradiation is used to destroy bacteria and pests that cause human illnesses, to inactivate pests of quarantine concern and to extend shelf life. It has been used to treat food since the late 1950s, providing a safe and effective alternative to chemical and heat treatments.
“If you give people more information, does it change their perceptions?”
Unlike chemically treated food, however, irradiated food has had to be labelled, and the question being asked in some quarters is whether that has been a help or a hindrance.
In the wake of the Blewett Review of Food Labelling Law and Policy, the Australia and New Zealand Ministerial Forum on Food Regulation is to consider
whether mandatory labelling of irradiated food should now be dropped.
It has asked FSANZ to explore this proposal, and as a result the standards maker has sought UTS’s expertise in consumer behaviour and health economics.
“As an evidence-based standards maker, much of the evidence we use comes from the biosciences,” says Dr Trevor Webb, FSANZ’s Principal Social Scientist and Manager of its Behavioural and Regulatory Analysis Section.
“But, increasingly, the consumer, social and economic sciences are important to us, and collaborations like this one with CHERE provide us with the sort of rigorous evidence we need for our decisions.”
Dr Webb says FSANZ needs to know how consumers use the information they are given about irradiation now, and what potential benefits or losses there may be if labelling were no longer mandatory.
It is the first time FSANZ has directly used this sort of discrete choice experiment work, he says. “The methodology is of particular interest because it’s getting closer to the sorts of decision trade-offs that consumers might be making in the real world, in the supermarket,” he says.
The UTS researchers say this sort of study of choice also raises questions around the education of consumers.
“If you give people more information, does it change their perceptions?” Professor Viney says. “What would the consumer want if they knew what the full set of choices were?”
Ms Meshcheriakova has found, for instance, low public awareness of food irradiation and the Radura symbol used in its labelling.
The food labelling study is attracting international interest, with representatives of the United States Food and Drug Authority (FDA) and food regulators from Britain, Canada and Korea recently taking part in a webinar to learn more about the project.
Lesley Parker for UTS Business School