Cutting Costs and Improving Health: Prioritize Healthful Foods in Food Assistance Programs

The Physicians Committee

Cutting Costs and Improving Health: Federal Food Policy Reforms Could Save Billions

A Report from the Physicians Committee for Responsible Medicine
July 28, 2011

2. Prioritize Healthful Foods in Food Assistance Programs

The U.S. Government could cut program costs over the short term and reduce medical costs over the long term by putting a focus on healthful foods in the Supplemental Nutrition Assistance Program (SNAP) and in commodity purchases.

a. Prioritize Health in SNAP

SNAP (formerly the Food Stamp Program), is designed to provide food for economically disadvantaged people. It serves that purpose, with one in seven Americans now drawing SNAP benefits at a cost of $65 billion annually. However, the program has become a perk for food manufacturers who find that it supports a growing market for candy, soda, fatty cheese, and specialty meats as much as it does for healthful vegetables, fruits, grains, and beans.

As it is currently configured, SNAP perpetuates food deserts—geographic areas with inadequate availability of healthful foods. Because unhealthful, processed, shelf-stable foods are covered on the same basis as healthful, but perishable, fruits and vegetables, grocers have little incentive to provide healthful foods, and providers of perishable fresh fruits and vegetables operate at a disadvantage.

A vanishingly small number of Americans currently suffer from hunger, defined as an inadequate caloric intake. Instead, a great many suffer from poor nutrition. In the period since the U.S. Department of Agriculture began tracking Americans’ eating habits in 1909, the average American has increased his or her annual meat intake by 75 pounds, and increased annual cheese intake by 30 pounds. Sugar intake as increased as well.13 As a result, many Americans consume diets high in fat, cholesterol, and overall calories, while being deficient in fiber, vitamins, and minerals provided by healthful plant-based foods.

Part of the increase in purchases of unhealthful foods is driven by the fact that rising personal income has greatly outstripped increases in food prices.13 What were once considered luxury foods are now part of daily life. SNAP accentuates this phenomenon, since it reduces the costs of both essential and luxury foods to zero. As a result, food products purchased for non-nutritional reasons (e.g., cookies and other sugar-fat mixtures, chocolate, and fatty cheese and meat products) are likely to become a bigger part of the grocery cart. SNAP puts the best and worst food choices on the same economic footing.

Food Expenditures as a Percentage of Disposable Income 1929-2008

Despite its enormous price tag, SNAP does not cover the full monthly food bills for most participants. The maximum benefit of $200 per month is provided only to those with no income. The average benefit is $133 per month. 

The program also has an unintended demeaning feature in that it tacitly suggests that economically disadvantaged people view unhealthful foods as necessities. There is no evidence in support of such a contention. A more healthful view is that economically disadvantaged people, like everyone else, recognize that unhealthful foods are not to be part of our daily routine and that a continued supply of these foods is to our detriment.

A reconsideration of key SNAP provisions could take several forms:

i. Provide Incentives for Healthful Purchases. A Massachusetts pilot program provides incentives for fruits and vegetable purchases. For every dollar spent on these foods, 30 cents is added to the customer’s SNAP benefits. The program is limited, providing no incentives for beans or other legumes, for example, which are healthful and economical.

An incentive program could be expanded to include a broader range of foods, and incentives could also be extended to retailers, such that sales of healthful foods are rewarded.

ii. Eliminate Unhealthful Food Items. SNAP benefits currently exclude alcoholic beverages. Many food advocates have recommended also excluding sodas from coverage. Were sound nutrition principles to dictate SNAP choices, the exclusions would include candy, soda, processed meat, fatty dairy products, and other foods. Grocers will then have an incentive for providing shelf space for healthful fruits, vegetables, legumes, and whole grains.  

The USDA has expressed concerns about the costs of separating included versus excluded products, which is an issue for both incentive programs and restricted programs, as well as the challenges of enforcing such restrictions. Costs can be minimized by (1) giving manufacturers the relevant guidelines and asking them to label products appropriately, or (2) limiting the included foods to a short, simple list, as described below. However, some of the objection to eliminating unhealthful foods comes from the industries that profit from the sale of these products. For health reasons and fiscal reasons, it is essential to keep SNAP as a benefit to individuals in need, rather than a stimulus for any sector of the food industry. Attempts to use SNAP as an economic lever for the food industry will distort its function as a program of good nutrition for people who need it.

iii. Focus on Healthful Basics. The simplest and most healthful SNAP structure would limit the eligible foods to a short list of staples, with an eye toward ensuring that every beneficiary receive healthful necessities. Because these foods are inexpensive and in a limited range, the cost savings to the government would be substantial.

The eligible foods would include such basics as oats, rice, and other grains, dry beans, fruits, and vegetables, which could be fresh, frozen, or canned. The briefer the list of included foods, the simpler it is to implement. Participating grocers could be required to stock certain items, such as no-salt-added canned beans and vegetables.

Such a program could also include a provision for compliance with the Dietary Guidelines for Americans recommendation that all Americans over age 50 take supplemental vitamin B12. A simple way to accomplish this is to include basic multiple vitamins (which typically contain vitamin B12) in the list of included products available for all program participants. 

We have calculated food costs, based on the USDA’s Thrifty Food Plan market basket.14 If chosen from a variety of simple but nourishing vegetables, fruits, whole grains, and legumes yielding 2,000-calories per day, the cost of a month’s food totals approximately $134, which is one-third less than the $200 benefit provided by the most complete current program coverage.

Were SNAP to be reorganized using the third option above, the government could either (1) maintain current limited coverage while cutting costs by approximately one-third ($24 billion annually based on current program costs) or (2) provide full and healthful nutrition to all participants, something that is not possible with the current program structure.

b. Prioritize Health in Commodity Purchases

American children today are in the worst physical shape of any generation in the nation’s history. One in three children is overweight, and the prevalence of overweight rises as they reach older ages. One in three children born since the year 2000 will develop diabetes at some point in his or her life, according to the Centers for Disease Control and Prevention. As these children reach adulthood, the drain on America’s health care resources will continue to escalate.

Contributing to this problem is the fact that the USDA routinely uses school meal programs and other food assistance programs as a dumping ground for agricultural commodities. When cheese prices fall, the USDA buys up millions of pounds of cheese. When beef prices fall, it buys up beef. School menus then feature cheeseburgers, cheese pizza, and Salisbury steak. These purchases are designed to reduce surpluses and stabilize agricultural prices, but they have a negative effect on children’s health and, over the long run, on medical costs.

In fiscal year 2009, USDA spent more than $1.4 billion on commodity purchases of meat, dairy products, and eggs—twice what it spent on all fruits, vegetables, grains, nuts, and oils combined.

In 2007, the American Medical Association called for “basing food assistance programs on the health needs of their constituents,” rather than on the economics of the food industry. A similar measure was passed by the American Public Health Association. This is a sensible provision that would reduce expenditures for commodity purchases, save on medical care costs, and improve overall health.

Routine, nonemergency commodity purchases could also be focused on vegetables, fruits, legumes, whole grains, and vegetarian meat and dairy substitutes. Such a step would pay dividends well into the future as children learn healthy eating habits.