Cost of foodborne illness varies by US state

An understanding of the costs associated with foodborne illnesses is important to policy makers for prioritizing resources and assessing whether proposed interventions improve social welfare.

sorenne.moneyAt the national level, measured costs have been used by federal food safety regulatory agencies in regulatory impact analyses. However, when costs differ across states, use of national cost-of-illness values for state-based interventions will lead to biased estimates of intervention effectiveness.

In this study, the costs of foodborne illness at the state level were estimated. Using a more conservative economic model, the average cost per case ranged from $888 (90% credible interval [CI], $537 to $1,419) in West Virginia to $1,766 (90% CI, $1,231 to $2,588) in the District of Columbia. A less conservative model generated average costs per case of $1,505 (90% CI, $557 to $2,836) in Kentucky to $2,591 (90% CI, $857 to $5,134) in Maryland. Aggregated across the states, the average national cost of foodborne illness was estimated as $55.5 billion (90% CI, $33.9 to $83.3 billion) using the conservative model and $93.2 billion (90% CI, $33.0 to $176.3 billion) using the enhanced model.

State estimates for the annual cost of foodborne illness

Journal of Food Protection®, Number 6, June 2015, pp. 1064-1243, pp. 1064-1071(8), DOI: http://dx.doi.org/10.4315/0362-028X.JFP-14-505

Scharff, Robert L.

http://www.ingentaconnect.com/content/iafp/jfp/2015/00000078/00000006/art00001

Foodborne Illness: Consumer Costs, Consequences, and Choices (via The Abstract)

I’m collaborating with Matt Shipman, public information officer at NC State University and curator of The Abstract, on a set of food safety-related posts from other NCSU folks as we roll toward WHO’s World Health Day on April 7– which is focused this year on food safety. Here’s a post on consumer purchasing issues as they relate to food safety from my friend Kathryn Boys, an assistant professor of agricultural and resource economics at NC State.

Changes to our food system have increased the availability and variety of foods for U.S. consumers, but these changes have also introduced food safety challenges that can have significant impacts on human health and the economy. Researchers are working to develop new food safety tools – and in the meantime there are actions consumers can take to lower their risk of foodborne illness.Boys-Food-Safety-HEADER-848x477

The U.S. Centers for Disease Control and Prevention (CDC) estimates that 48 million instances of foodborne illnesses occur annually in the U.S., resulting in 128,000 hospitalizations and 3,000 deaths. The value of medical costs, productivity losses, long-term mental and other health impacts, and the costs of premature deaths stemming from these events is substantial. The fourteen pathogens that account for a majority of U.S. foodborne illness have recently been estimated to cost the U.S. economy $14 billion and cause a loss of 61,000 quality-adjusted life years annually.

The potential for a specific foodborne illness outbreak to have a broad and significant impact on human health and the economy is compounded by the integration and globalization of food supply chains. Historically, because of perishability and the fact that produce was predominantly consumed in its raw form, incidents involving produce contaminated in a farm setting would have only affected consumers geographically near the farm. Today, through improved transportation and logistics networks and increased processing, that same produce has the potential to be used in a wider variety of products and affect consumers far from where it was grown.

In addition, identifying the source of contamination may be challenging and time consuming for food wholesalers and other distributors who aggregate products from across many suppliers and who have not implemented traceability practices. And that delay in tracing the source of the contamination means there is more time in which additional consumers may become sick.

When Illness Strikes: Impact on Individual Consumers

A majority of consumers who become ill due to foodborne illness recover at home or with minor medical assistance. In cases of severe illness that can be attributed to either food prepared outside of their home (i.e., restaurants), or contaminated prior to entering their home, consumers may pursue legal remedy for their illness. Information on the number or outcomes of cases settled out of court is not available. We do have some insight, however, of food safety cases settled through jury trials.

Buzby, et al., analyzed federal jury trials (1988-1997) for foodborne pathogens to determine which factors of the incident/case most influenced the trial outcomes. These authors found that 31.4 percent of cases were won by plaintiffs, and juries awarded a median of $25,560 (ranging from $0 to $2.37 million in 1998 dollars). Demographic characteristics of the plaintiff, the ability of plaintiffs to link their illness to a specific pathogen, and the severity of the health impact resulted in higher awards.

Given increasing public and media attention to foodborne illness, continued integration of food supply networks, and improved traceability systems, it is likely that both the number of cases and the amount of these awards will increase over time. I am currently working with collaborators at Virginia Tech and the USDA Economic Research Service to examine this issue.

Foodborne Illness: Preventative Market Measures

Most U.S. consumers have faith in the safety of food supply chain. In general, consumers expect their products to be free from dangerous levels of contamination and to be efficiently recalled if there is a problem. However, the incidence of foodborne illness suggests that problems remain.

Higher levels of food safety can be attained for most food products, lowering the risk of purchasing a contaminated product. But increased food safety comes at a cost.

Research has explored how much more consumers are willing to pay for higher levels of food safety.

In general, findings indicate that U.S. consumers are willing to pay more for higher levels of safety due to risk from microbial, chemical or physical (e.g., metal) contamination. How much more, however, has been found to vary considerably depending on the research setting, the particular food products being studied, the extent of risk reduction, and the research participants’ adherence to safe food handling practices, perception of risk, and demographic characteristics.  The same is true for perceived threats to food safety from other sources.

Consumers concerned about pesticide residues or genetic modification, for example, are willing to pay higher prices for organic and non-GMO foods. Consumer willingness to pay to avoid other food technologies, such as artificial colorants, fruit-ripening technologies, growth hormones and other growth promotants, and nanotechnology (among many others) has been summarized by Lusk, et al.

Consumers interested in decreasing their risk of foodborne illness have the option of buying products from companies with good food safety records, and to keep abreast of product recalls and safety alerts. Once food has entered the home, the food handling and sanitation practices that consumers can take to limit their risk of foodborne illness are generally well known. Information about safe food handling techniques can be found at http://www.foodsafety.gov/index.html.

In the future, additional tools are also likely to be available to consumers. By way of example, food producers often signal the presence (or absence) of specific food attributes through a growing array of food certification and labeling schemes. While at present, there is no label to identify products with higher levels of microbial food safety, it is possible that one may emerge. In addition, human vaccines are currently under development to protect against illness due to Escherichia coli, Salmonella, and Campylobacter. These and other tools are likely to significantly change the food safety market and policy landscape in coming years.

Making food safe costs money

With the absence of Rob Ford antics and Olympic hockey news, Canadian media attention has shifted towards federal budget rumors and posturing for the next election. Taking the opportunity of the news lull and budget discussions the Canadian Federation of Independent Businesses released a, uh, press release (and corresponding report) for redtape awareness week. The report suggests that complying Canadian Food Inspection Agency requirements costs businesses an average of $20,396 per business or a federal total of $657 million.Screen Shot 2014-01-29 at 6.01.51 PM

From the release:

“Farmers support rules necessary to ensure safe food and are tired of getting the runaround from the CFIA,” says Marilyn Braun-Pollon, CFIB’s vice-president, agri-business. “Spending thousands of dollars and countless hours navigating through confusing forms and contradictory information leaves farmers feeling completely frustrated. And this does nothing to promote food safety.”
Key findings on the CFIA:

Since 2006, the annual average cost of complying with the agency’s rules and paperwork has increased from $19,000 to $20,396 per agri-business owner;

Only one-in-five agri-business owners believe the CFIA provides good ‘overall service’, the same as previous findings in 2006, indicating there is no improvement in  overall service.

60 per cent of agri-business owners say CFIA regulations add significant stress to their lives; and

46 per cent report that the agency’s regulations significantly reduce productivity in their business, up from previous findings (40 per cent) in 2006.

Sort of.

The report details how those compliance numbers are calculated: time spent complying with regulations, new equipment and professional fees.

Except some portion of those expenses are the cost of doing business in a marketplace that demands food safety. Not everything is linked to CFIA bureaucracy: some of the equipment, personnel costs and documentation is industry best practice. Stuff that good companies would do in the absence of regulation.

Making food safely is stressful – and costs money.

Is college still worth it?

My two eldest daughters graduated university with $30,000 in debt, each. For Canada, with its exclusively public system, that’s a lot.

backtoschool-01I only became aware of this about five months ago.

But it dovetails with my observations and own experiences of the intransigence of the university system.

When it makes The Daily Show, which most American university kids go to for news, even though it’s a fake news show, it’s not just me going on about something.

The system is broken.

 

How foodborne illness impacts the economy

First it was nerdwallet, now it’s WalletBlog.

I didn’t know so many financial blogs existed with an interest in foodborne disease.

When an outbreak occurs in this the era of Facebook, Twitter, and streaming news on cell phones, millions of consumers know about it immediately and are likely to swear off the product involved for the foreseeable future.  Therefore, not only will the farm at which it originated almost certainly go bankrupt as a result, but the entire industry will suffer as well.

“Anytime there is an outbreak, sales go down,” said Dr. Douglas Powell, professor of food safety at Kansas State University.  “Any commodity … is only as good as its worst farm.”

According to Robert L. Scharff, a former economist for the US Food and Drug Administration and currently an assistant professor at the Ohio State University, foodborne illness costs the country roughly $152 billion annually. 

As Dr. Powell pointed out, “Any foodborne outbreak has effects far beyond the headlines.”

The question is what to do about this issue not only because our economy could obviously use a break, but also given the simple fact that, as Dr. Powell noted, it seems out of whack that “we’re supposed to be a developed country, and we have all this illness from something as basic as food.”

The answer, according to Dr. Powell, is to give consumers as much information as possible.  People simply have little way to tell whether the food they buy comes from farms that are microbiologically safe or not.  Denoting this on labels much like restaurants emphasize good inspection grades would be a good start, even though it would surely alienate industry bigwigs given that it would imply that certain foods aren’t actually safe to begin with.

Ultimately, some marketing reform is also going to be needed.  A perfect example of why is the case of organic food.  Production issues, such as organic farmers being more conscious of their environmental impact, surely play into its popularity, but its primary driver is the fact that people believe it to be safer than non-organic food, according to Dr. Powell.  While marketers don’t out and out say so, they certainly hint at this falsity.  We just need to point the marketing machine in the right direction.

Dr. Powell is helping lead this effort with his aptly-titled barfblog, which discusses food issues in a way that will keep the attention of today’s ADD society.  Who knows, maybe we can make foodborne illness education the next “in” celebrity cause and in doing so not only save lives, but also save the industry billions of dollars, thereby reducing food prices for everyone and helping our ailing economy.  

Update your references: foodborne illness costs $77 billion a year in US

Here’s the abstract:

Economic burden from health losses due to foodborne illness in the United States
Journal of Food Protection®, Volume 75, Number 1, January 2012 , pp. 123-131(9)
Scharff, Robert L.
http://www.ingentaconnect.com/content/iafp/jfp/2012/00000075/00000001/art00018

The Centers for Disease Control and Prevention (CDC) recently revised their estimates for the annual number of foodborne illnesses; 48 million Americans suffer from domestically acquired foodborne illness associated with 31 identified pathogens and a broad category of unspecified agents. Consequently, economic studies based on the previous estimates are now obsolete. This study was conducted to provide improved and updated estimates of the cost of foodborne illness by adding a replication of the 2011 CDC model to existing cost-of-illness models. The basic cost-of-illness model includes economic estimates for medical costs, productivity losses, and illness-related mortality (based on hedonic value-of-statistical-life studies).

The enhanced cost-of-illness model replaces the productivity loss estimates with a more inclusive pain, suffering, and functional disability measure based on monetized quality-adjusted life year estimates. Costs are estimated for each pathogen and a broader class of unknown pathogens. The addition of updated cost data and improvements to methodology enhanced the performance of each existing economic model. Uncertainty in these models was characterized using Monte Carlo simulations in @Risk version 5.5.

With this model, the average cost per case of foodborne illness was $1,626 (90% credible interval [CI], $607 to $3,073) for the enhanced cost-of-illness model and $1,068 (90% CI, $683 to $1,646) for the basic model. The resulting aggregated annual cost of illness was $77.7 billion (90% CI, $28.6 to $144.6 billion) and $51.0 billion (90% CI, $31.2 to $76.1 billion) for the enhanced and basic models, respectively.