Running head: ECONOMIC ANALYSIS OF PUBLIC HEALTH INITIATIVE
1
Economic Analysis of Health Initiative
Principles of Economics for Evaluating and Assessing the Need for Public Health Initiative
Public health is a science that collectively aims to improve and reduce inequalities in
health. Public health economics guides the decision-making process for public health
practitioners in the utilization of available resources while minimizing opportunity cost
(Edwards, Charles & Lloyd-Williams, 2013). The project will focus on public health
interventions that help reduce and obesity. Obesity is a medical condition where a person has
accumulated excess fats in their body to the extent that it poses a health risk. The rise in obesity
is an increasing concern to public health causing the need for attention to reducing the potential
health impacts it has on the human population. Changes in the environment primarily contribute
to the rising rates of obesity due to lower costs and time for food production and monetary costs
of buying food. Consumers have often demanded faster, convenient and affordable access to
food, which has led to improvements in technology to deliver fast foods across the world.
However, these improvements have come with adverse effects on the health of most consumers.
It is important to recognize that economic force significantly contributes to the obesity
health crisis that is experienced in the United States because it is possible for users to access,
affordable high energy tasty meals making most people less physically active while at work and
home. Additionally, healthcare costs have been lowered with technological advancements, which
result to less motivation to diet or exercise to avoid the consequences of obesity. Economics
explains the relationship between prices and demand. When the prices for commodities are
higher, the quantity required is lower and vice versa. The advancements in technology have
reduced the costs and time spent on the production of fast foods and thus makes them available
ECONOMIC ANALYSIS OF PUBLIC HEALTH INITIATIVE
2
at lower prices which explain the increase in consumption of the same (Finkelstein &
Strombotne, 2010).
Even though the cost of producing high-calorie foods has reduced, the cost of burning-out
the intake of the same calories has increased. Letting-off this energy in the workplace has been
made almost impossible with the replacement of most of the physical activities of blue-collar
jobs by machines which automate processes. Technology advancements have increased the
productivity of employees and their wages but at the expense of increasing their weight
(Finkelstein & Strombotne, 2010). Individuals can only decrease the calories consumed by
engaging more in physical activity if they want to consume more calories. This is not a moderate
exercise as it comes with significant costs, which economists refer to as opportunity cost. The
opportunity cost of making a choice from various alternatives. Leisure time is hardly spent on
physical activities with most people even at home spending a significant proportion of their time
on the computers, televisions and other gadgets. The low activity levels due to advancements in
technology are substantially affecting the lifestyle of the citizens.
Is the Public Health Initiative a Micro or Macroeconomic Program?
The public health initiative to help reduce and prevent obesity is a macroeconomic
program. The obesity issue is not only an individual concern but also affects the nation as a
whole. When individuals are obese, they are prone to various medical conditions like
cardiovascular diseases, diabetes type 2, depression, arthritis, certain cancers and many more
conditions, which have the potential of influencing the productivity of such people. When a
significant number of individuals are not productive due to obesity, it becomes a threat to a
countries economic growth because the nation growth is dependent on the productivity of its
citizens. Nearly half of the population of North America is obese, and the negative health
ECONOMIC ANALYSIS OF PUBLIC HEALTH INITIATIVE
3
consequences of obesity represent approximately 7 percent of the national health expenditure
(Roux & Donaldson, 2004). A lot of resources allocation is towards ensuring healthcare services
are available to the public to access treatment for obesity and conditions that are attached to
them.
Is the Public Health Initiative Results a public or private good?
The public health initiative in reducing obesity is a public good. In economics, public
goods are those which its consumption by one individual does not diminish the amount available
for others to consume and are all inclusive such that no one is excluded from enjoying the
benefits associated with them (Scott, Solomon & McGowan, 2001). Public health initiatives are a
function of various factors both structural, political and social forces and not an individual's
actions (Finkelstein & Strombotne, 2010). The elements that strengthen the ability to have public
health initiatives as identified cannot be owned or controlled by an individual. The incentives
that advocate for the consumption of healthier foods to prevent and reduce the obesity rates in
the country are non-excludable and have no aspects of rivalry. The accessibility of this
information to one individual does not make it less available for others to utilize and benefit from
it. The provision of public health services has a close link to the government decisions as well as
other public goods (Galea, 2016). Any initiative that intends to improve the health of the public
is therefore well categorized as a mutual interest. The public action to reduce and prevent obesity
will occur by providing general knowledge on healthy food consumption, the risks of highcalorie diets and the physical activities to engage in to burn out the high calories.
The access to information regarding public health initiative to reduce and prevent obesity
provides shared benefit for a shared good. The ability to protect the public from unhealthy habits
through group behaviors that foster human health and wellbeing are mutual benefits which are all
ECONOMIC ANALYSIS OF PUBLIC HEALTH INITIATIVE
4
inclusive. For instance, one individual benefiting from knowledge on unhealthy behaviors or
benefit from the obesity reduction and prevention program does not prevent another person from
experiencing similar benefits. Additionally, the provision of public health is dependent on the
global public goods, which need universal solutions (Galea, 2016). The prevention and reduction
of obesity, for instance, is not a challenge to the United States alone but also of other
neighboring countries since the technologies and advancements that led to the crisis also move to
the other countries causing similar problems. The public health initiative to reduce obesity is also
considered a public good because it provides equal opportunity for everyone in the society to
adopt a healthy lifestyle.
Financing Source for the Public Health Initiative
The Federal government funds public health programs through grants to states
distributed through CDC's National Center for Chronic Disease Prevention and Health
Promotion. The public health initiative to reduce obesity implementation is in Texas, and we
shall access the financial resources of the grants disbursed by the government through the
Division of Nutrition, Physical Activity, and Obesity. The Prevention and Public Health Funds
can also be mobilized to support the initiative. The fund supports various activities in the
prevention of obesity including CDC's Division of Nutrition Physical Activity and Obesity
(DNPAO). The DNPAO supports healthy eating behaviors and physical activity for obesity
prevention by focusing on dietary quality to support the development of children from an early
stage (CDC, 2017).
How the Public Health Initiative will affect the Supply and Demand for Health Services
Unhealthy food consumption behaviors that result in obesity are likely to increase the
demand for healthcare services. The reduction in costs and time for producing high-calorie foods
ECONOMIC ANALYSIS OF PUBLIC HEALTH INITIATIVE
5
makes the meals affordable to consumers providing an incentive to consume more. The
consumption of junk food results in high fat building up in the body making a person exposed to
risks of a variety of medical conditions. Due to this pre-exposure, the victims of obesity tend to
seek medical services. Demand for medical services originates from the demand for health
(Gupta & Greve, 2009). Other than health status, the demand for healthcare services is also
influenced by factors such as age, wages, education, and prices for medical goods. Unhealthy
behaviors such as smoking, drinking, and obesity also contribute to the increased demand for the
access of medical care (Finkelstein & Strombotne, 2010). The proposed public initiative aims to
reduce and prevent obesity by promoting healthy eating behaviors and encouraging physical
activity. If successful, the effort is likely to lead to improved health behaviors that promote the
wellbeing of the public and thus significantly reduce the demand for medical services. The
reduction of obesity means a decrease in the associated risks of cardiovascular conditions,
diabetes, certain types of cancer and arthritis among other ailments that would initially require
increased medical attention.
Obesity also leads to various effects on the supply of medical services. For instance, the
increased rates of obesity demand that more spending on pharmaceuticals because the condition
affects a person's pharmacokinetics which requires them to be administered with higher dosages
of medication and increased frequencies in administration (Klein, et al., 2004). Additionally,
hospitals are also forced to spend more on equipment like beds, wheelchairs, and walkers to
accommodate patients with obesity. The cost of a standard bed is lower than that of a bariatric
bed used for handling obese patients. Some hospitals go as far as modifying their buildings
hallways and doorways to accommodate obese patients (Camden, 2009). In general, obesity
leads to increased spending on the supply side of medical services. The proposed public initiative
ECONOMIC ANALYSIS OF PUBLIC HEALTH INITIATIVE
to reduce and prevent obesity if successful will go a long way in ensuring fewer cases in the
hospital and thus lead to reduced spending on the supply of healthcare services.
6
ECONOMIC ANALYSIS OF PUBLIC HEALTH INITIATIVE
7
References
Camden, S. (2009). Obesity: An emerging concern for patients and nurses. OJIN: The Online
Journal of Issues in Nursing, 14 (1), 278-290.
Centre for Disease Control and Prevention (CDC). (2017). Federal funding for obesity
prevention. Retrieved from https://www.cdc.gov/obesity
Edwards, T.R., Charles, M.J. & Lloyd-Williams, H. (2013). Public health economics: A
systematic review of guidance for the economic evaluation of public health interventions
and discussion of key methodological issues. BMC Public Health, 13:1001,
doi:10.1186/1471-2458-13-1001
Finkelstein, A.E. & Strombotne, K.L. (2010). The economics of obesity. The American
Journal of Clinical Nutrition, 91, 1520-1524.
Galea, Sandro. (2016, January 10). Public health as a public good. Retrieved from
https://www.bu.edu/sph/2016/01/10/public-health-as-a-public-good/
Gupta, N.D. & Greve, J. (2009). Overweight and obesity and the demand for primary
physician care. Retrieved from http://ftp.iza.org/dp4098.pdf
Klein, S., Burke, L., Bray, G., Blair, S., Allison, D. (2004). Clinical implications of obesity
with specific focus on cardiovascular disease: A statement for professionals from the
american heart association council on nutrition, physical activity, and metabolism.
Circulation, 110, 2952-2967
Rabarison, K. M., Bish, C. L., Massoudi, M. S., & Giles, W. H. (2015). Economic evaluation
enhances public health decision making. Frontiers in Public Health, 3(164), 1-5.
Retrieved from
http://doi.org/10.3389/fpubh.2015.00164
ECONOMIC ANALYSIS OF PUBLIC HEALTH INITIATIVE
Roux, L. and Donaldson, C. (2004), Economics and obesity: Costing the problem or evaluating
solutions?. Obesity Research, 12 (2), 173–179. doi:10.1038/oby.2004.23
Scott, R. D., Solomon, S. L., & McGowan, J. E. (2001). Applying economic principles to health
care. Emerging Infectious Diseases, 7(2), 282-285.
https://dx.doi.org/10.3201/eid0702.700282.
8
Running head: SCHOLAR PRACTITIONER PROJECT
1
Brief Overview of the Initiative
Worth a note, the increasing prevalence of obese persons in the Austin TX, has seen the
development and implementation of a public health initiative focused on the reduction and
prevention of obesity in Texas. According to Texas Department of State Health Service (2016),
the program primary objective for the public health initiative is to bring up a healthy people by
working towards creating awareness in selecting healthy choices among Texans, for instance,
decreased usage of added sugars, low nutrients as well as high calories foods and increasing
duration for physical activities. Besides, the program aims at fostering an increasing of some
types of food, such as vegetables, water as well as fruits, as well as an increase in the mothers’
breastfeeding duration. As a result, the public health initiative would move to heighten the
prevention and reduction of obesity among the Texans.
The Rationale of the Topic
Notably, the choice of my topic was highly promoted by the increasing outcry by the
government and the public health departments regarding the increasing influence of obesity on
personal health. Lavie, Milani, and Ventura, (2009), postulated that by an individual being
overweight increases the risks of a person suffering cardiovascular diseases, hypertension,
cancers, and stroke, among other sicknesses. This has not only become an expensive condition
but also leading to household economic crisis especially when a member suffers an ailment
related to obesity. Worth a note, obesity cases in the United States has increased over the past
few years with current statistics revealing that approximately 36.5% of American are overweight
and obese (CDC, 2016). In addition, Texas is ranked 10th in the United States in the prevalence
cases of obesity currently at 32.4 percent in the year 2015, an upward growth from 21.7 percent
RUNNING HEAD: Obesity Prevention Program
in the year 2000; thus, my desire in pursuing a scholar-practitioner project on the reduction and
prevention of the prevalent cases of obesity among Texans.
2
RUNNING HEAD: Obesity Prevention Program
References
CDC, (2016). Obesity is common, serious and costly. Retrieved from:
https://www.cdc.gov/obesity/data/adult.html
Texas Department of State Health Service (2016). Obesity Prevention Program. Retrieved from:
https://www.dshs.texas.gov/obesity/
Lavie, C. J., Milani, R. V., & Ventura, H. O. (2009). Obesity and cardiovascular disease. Journal
of the American College of Cardiology, 53(21), 1925-1932.
3
Program Director/Principal Investigator (Last, First, Middle):
Doe, John
DETAILED BUDGET FOR INITIAL BUDGET PERIOD
DIRECT COSTS ONLY
FROM
THROUGH
1-1-16
12-31-16
List PERSONNEL (Applicant organization only)
Use Cal, Acad, or Summer to Enter Months Devoted to Project
Enter Dollar Amounts Requested (omit cents) for Salary Requested and Fringe Benefits
NAME
ROLE ON
PROJECT
Doe, John
Cal.
Mnths
Acad.
Mnths
Summer INST.BASE
Mnths
SALARY
SALARY
REQUESTED
FRINGE
BENEFITS
TOTAL
Commented [SB1]: This indicated 28% fringe rate, each
institution is different. This can usually be found by
Googling.
PD/PI
12
100,000
100,000
28,000
128,000
Mouse, Mickey
Scientist
12
65000
65000
18200
83200
Duck, Donald
Research
Asst
6
50000
25000
7000
32000
Commented [SB2]: This shows 6 months or 50% of the
base salary.
White, Snow
Dietician
3
40000
10000
2800
12800
Commented [SB3]: This is 3 months or 25% of the base
salary.
200,000
56,000
256,000
SUBTOTALS
CONSULTANT COSTS
Jones, Bob
5000
Commented [SB4]: This is 28% of the salaries requested.
Commented [SB5]: This column should add up both
vertically and horizontally so double check your math!
EQUIPMENT (Itemize)
Industrial Fan
5000
Commented [SB6]: Equipment would be > $5000. If less
it is a supply.
Commented [SB7]: Itemized detail of the cost and purpose
of each item goes in the budget justification.
SUPPLIES (Itemize by category)
Test Tubes, Weight Control Printed Pamphlets, Questionnaire Designing Program
600
TRAVEL
APHA
2000
INPATIENT CARE COSTS
OUTPATIENT CARE COSTS
ALTERATIONS AND RENOVATIONS (Itemize by category)
Commented [SB8]: Itemized detail of the cost and purpose
of each item goes in the budget justification.
OTHER EXPENSES (Itemize by category)
Compensation Cards for Participation
2000
CONSORTIUM/CONTRACTUAL COSTS
DIRECT COSTS
SUBTOTAL DIRECT COSTS FOR INITIAL BUDGET PERIOD (Item 7a, Face Page)
$
270,600
$
270,600
FACILITIES AND ADMINISTRATIVE COSTS
CONSORTIUM/CONTRACTUAL COSTS
TOTAL DIRECT COSTS FOR INITIAL BUDGET PERIOD
PHS 398 (Rev. 08/12 Approved Through 8/31/2015)
Page
OMB No. 0925-0001
Form Page 4
Commented [SB9]: Contractual work requires a
completely separate budgets so this is not required for the
course.
Doe, John
Program Director/Principal Investigator (Last, First, Middle):
BUDGET FOR ENTIRE PROPOSED PROJECT PERIOD
DIRECT COSTS ONLY
BUDGET CATEGORY
TOTALS
PERSONNEL: Salary and fringe
benefits. Applicant organization
only.
CONSULTANT COSTS
EQUIPMENT
SUPPLIES
TRAVEL
INITIAL BUDGET
PERIOD
(from Form Page 4)
2nd ADDITIONAL
YEAR OF SUPPORT
REQUESTED
3rd ADDITIONAL
4th ADDITIONAL
5th ADDITIONAL
YEAR OF SUPPORT YEAR OF SUPPORT YEAR OF SUPPORT
REQUESTED
REQUESTED
REQUESTED
256,000
263,680
271,590
279,737
288,129
5,000
5,150
5,304
5,463
5626
5000
5150
5304
5463
5626
600
618
636
655
674
2,000
2060
2121
2184
2249
2,000
2060
2121
2184
2249
270,600
278,718
287,076
295,686
304,553
270600
278718
287076
295686
304553
Commented [SB1]: 3% increase annually is standard.
Commented [SB2]:
INPATIENT CARE
COSTS
OUTPATIENT CARE
COSTS
ALTERATIONS AND
RENOVATIONS
OTHER EXPENSES
DIRECT CONSORTIUM/
CONTRACTUAL
COSTS
SUBTOTAL DIRECT COSTS
(Sum = Item 8a, Face Page)
F&A CONSORTIUM/
CONTRACTUAL
COSTS
TOTAL DIRECT COSTS
TOTAL DIRECT COSTS FOR ENTIRE PROPOSED PROJECT PERIOD
$
1,436,663
JUSTIFICATION. Follow the budget justification instructions exactly. Use continuation pages as needed.
John Doe, Ph.D. (PI) will be the lead faculty member on the grant project……….
The following Sample is not for this BUDGET. It does give you an idea of how a budget justification should
be written.
(Also see the examples provided in the Doc Sharing area for how to itemize personnel, consultants,
equipment, etc.). The budget justification should be detailed and each item should be listed and you should
describe why the item is needed for the program to function.
PHS 398 (Rev. 08/12 Approved Through 8/31/2015)
Page
OMB No. 0925-0001
Form Page 5
Commented [SB3]: These equal $1,436,663
SAMPLE NIH R01 Budget Justification
BUDGET JUSTIFICATION
Senior/Key Personnel
Margaret Meade, PhD, Principal Investigator. Dr. Meade will be responsible for the overall administration of
this project. She will share responsibility for the substantive direction of the project with Dr. Benjamin Spock
and Dr. Vandana Shiva.
Dr. Meade will have primary responsibility for the organization and operation of the project. She will oversee
hiring, training, and supervision of all staff and ensure the quality of data collection, coding, and data
management over time. She will train data collectors and behavioral and interview coders. She will conduct
much of the data analyses and author publications. In Year 1, Dr. Meade will devote 25% of her effort (of her 9month faculty assignment) during the academic year and .5 summer month managing this project. In years 24, she will devote 15% each academic year and 1 summer month each year to work on the project.
Dr. Spock will serve as co-investigator and coordinate specific aspects of the project in collaboration with Dr.
Meade. Dr. Spock will have primary responsibility for coding and scoring measures of mothers’ attributions
about crying and will assist Dr. Meade in training the project staff to code maternal behavior/sensitivity. He will
assist with designing effective strategies for sample recruitment and retention. He will assist with the
interpretation of data and will co-author publications. Dr. Spock will devote a 20% effort (of a 10-month faculty
assignment) to this project throughout each year for the duration of the project.
Dr. Shiva will serve as co-investigator on this project. As Program Director of the UNCG Center for First
Generation North Carolinians, she has connections with diverse population groups in the area. These
connections will serve in the efforts to recruit first-generation Americans refugees and immigrant families for
the study. She will have primary responsibility for creating procedures to ensure the adequate collection and
interpretation of data to assess mother and infant vagal withdrawal. She contributes knowledge of crosscultural feminist theory and cultural competence, and will also co-author publications. Dr. Shiva will contribute
15% of her effort to this project each year (12-month position).
Other Personnel
A full-time, MA-level Project Coordinator will be responsible for the day-to-day management of the project, and
will work closely with Dr. Meade and the co-investigators in hiring, training, and supervising the project staff.
A full-time Research Assistant will be responsible for arranging recruitment visits and scheduling participant
visits, and will assist with data collection. This person will also order research supplies and reconcile the
budget.
In Years 3 and 4, a full-time postdoctoral fellow with advanced quantitative skills will be hired to assist with data
analysis and manuscript preparation.
Graduate Research Assistants will be supported by the project; two GRAs will work during Year 1, and
additional GRA’s will be hired to work in Years 2-4. Their primary responsibilities will be to recruit participants
and to collect and code data. Additional GRAs will be needed during the summer for coding and during peak
data collection years when there is a great deal of overlap in assessment points. GRAs will work 50% of their
time during the academic year and 100% for the summer.
Fringe benefit rate is 32% for full-time employees, .8 % for enrolled students, and 8.45% for non-enrolled
students during the summer.
Equipment
Funds are requested to purchase three Biologs ($7,150 each). These are ambulatory physiological data
recorders with multiple channels that will be used to record mothers’ heart rate (RSA), activity level, and
1
electrodermal activity (e.g., skin conductance). Recorded data is compactly stored on a removable memory
card. When recording is complete, the card is inserted into a card reader which is connected to a PC through
a serial port. The affiliated Downloading and Plotting Software ($1,100 under Supplies) which operates on the
PC supervises the downloading of data to the PC and ensure data is recorded according to the needs
specified by the researchers. From this program, the data can be converted into separate data files for each
physiological measure. These measures are all synchronized with one another and can be synchronized with
video files as well. Three Biologs are needed because there are several periods when assessment points
overlap (e.g., prenatal interviews, 6 months laboratory visits, and 6 month home visits), and dedicated
equipment for each type of visit will ease scheduling demands.
Travel
Funds are requested for each of the assigned consultants to visit Greensboro once each year ($1,500 per trip)
that they work for the project.
Staff will travel to meet with hospitals and governmental health services during the first two years.
Reimbursement is calculated at 160 visits each year, 20 average miles at $.585 per mile.
Travel for home visits is estimated at 20 miles round trip; travel reimbursement is calculated at $.585 per mile
throughout the years, according to the number of home visits scheduled for the 6-month visit (see schedule
below).
Funds are requested for one professional conference in Years 2-4 to present findings from the study ($1,200
per trip).
Other Direct Costs
Supplies
Startup supplies – For Year 1, funds are requested to purchase electrodes (67 adult, 67 child, total $1,340),
Biolog software ($1,100), Noldus software upgrade and license for coding visits ($5,000), an external data
module ($2,850) to synchronize video and physiological data, two DVD video cameras ($650 each) to be used
at home visits, two wall-mounted DVD video cameras ($2,000 each) for the lab, two desktop computers
($1,000 each), a laptop ($2,000), printer ($350), and two external hard drives ($300 each).
General research supplies – Research supplies are calculated at approximately $1,875 per year, and include
snacks for participants, printer cartridges, blank DVD’s for data storage, DVD storage portfolios, paper and
other office materials. Funds are requested during Years 2-4 for consumable research supplies using a cost
estimate based on Year 1.
Small gifts, approximately $10 each, will be given to participants as incentives each year, calculated according
to the number of participants scheduled each year (see timeline below).
Consultants
In Years 1 and 2, Dr. Carol Adams from the University of Northern Virginia will train 3 research assistants to
administer the Adult Attachment Interview (AAI). She will periodically review interview transcripts to ensure
adherence to the interview protocol over time. Dr. Adams will also assist in identifying trained AAI coders. She
will provide support for this project at a rate of $400 per day for 5 days during Years 1 and 2.
In Year 1, Dr. Susan Griffin of American University will assist the PI and co-investigators in communicating with
the manufacturer of Biolog to ensure that the physiological equipment and software that records and
summarizes the data will be configured properly given the goals of the study. She will also assist in preparing
data collection procedures for the measurement of activity level and electrodermal activity and in the
interpretation of these measures in data analysis. Dr. Griffin will provide support for this project at a rate of
$500 per day for 5 days during Year 1.
2
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