Influencing Healthy Eating through Price Differentials- Children’s Hospital Colorado

Ryan Blair

Preceptor: Renee Porter RN, CPNP, DPN

Background

• Healthy Hospital Compact

• Modeled after the Better Bites program• Penrose-St. Francis Hospital - Colorado

Springs, CO

Our Objectives

1. Increase purchase of healthy foods2. Decrease purchase of traditional foods

(unhealthy options)3. Stay revenue neutral

Our Model

• Identify and pair three unhealthy items with healthy alternatives• French Fries vs Vegetable Side• Cheeseburger vs Grilled Chicken Sandwich• Chicken Fingers vs Grilled Chicken Breast

• Create a price differential between the two items, thereby subsidizing the healthy option

• Conduct a four week pilot program in June 2015 to gather data on the sales of paired items

Methods

• Data was analyzed from June 2014 cafeteria sales to determine the best selling unhealthy items• Cheeseburger, French Fries, Chicken Fingers

• Healthy Items were paired according to similar portion sizes and likeness• Grilled Chicken Sandwich, Vegetable Side, Grilled Chicken

Breast

• All pilot program items were placed at one station in the cafeteria

• Pre and post employee survey

Price Elasticity of Demand

• What is price elasticity?• The degree to which demand for a good or service

varies with price• Price elasticities of food was researched

• Categorized all items as “food away from home”• All items were denoted a .81 elasticity

• Meaning as price rises by 10% the items are demanded less by 8.1%

• Using Excel calculated new prices based on price elasticity and baseline data• Emphasis on revenue neutral

Price Differential

Item Old Price New PriceFrench Fries 1.50 1.75Vegetable Side 1.25 1.00*Cheeseburger 3.85 4.25Grilled Chicken Sandwich 3.75 3.50Chicken Fingers 4.95 5.20Grilled Chicken Breast 2.95 2.50*

Communication Plan:Organization-Wide

Message: Why we’re implementing program, how it relates to Healthy Hospital, and how it impacts employees • Children’s Post• Communication Liaisons• Healthy Hospital intranet page• Flyers at POS

Children’s Marketing Example

Results- Unhealthy Items

Results- Healthy Items

Results- Market Share/Budget

Item 2014 2105 % ChangeChicken Fingers 80.5% 74.3% -6.2%

Grilled Chicken Breast 19.5% 25.7% 6.2%

% Market Share

Item 2014 2015 % ChangeCheeseburger 56.5% 57.0% 0.6%

Grilled Chicken Sandwich 43.5% 43.0% -0.6%

% Market Share

Month Revenue % DifferenceJune 2014 $25,918.40June 2015 $24,452.55

5.99%

Public Health Implications

• Point of purchase labeling• Change in knowledge• Small improvements

• Price Differential between healthy and unhealthy food• Effective at changing purchasing behavior• Increase price = less food bought

• Positive reception by employees• Survey results

Conclusions

• Overall positive results• All unhealthy food saw drops in numbers sold• Replicate pilot program for a quarter

• Look at percent market share in addition to numbers sold

• Use June 2015 data as baseline• Continue to experiment with price

Sources

French, S.A., Jeffery, R.W., Sotry, M., Breitlow, K.K., Baxter, J.S., Hannann, P., & Snyder, M.P. (2001) Pricing and promotion effects on low-fat vending snack purchases: the CHIPS study. American Journal of Public Health, 91, 112-117

French, S.A. (2003). Pricing effects on food choices. American Society for Nutritional Sciences, 8415-8435.

Keller, P. A. & Lehmann, D. R. (2008). Designing effective health communications: A meta-analysis. Journal of Public Policy & Marketing, 27(2), 1-26. (Peer-reviewed scholarly journal)

Lovelock, C & Wirtz, J. (2004). Services Marketing: People, Technology, Strategy. Upper Saddle River, NJ. (8)

Michels, K.B., Bloom, B.R., Riccardi, P., Rosner, B.A. & Willet, W.C. (2008). A study of the importance of education and cost incentives on individual food hcoices at the Harvard School of Public Health cafeteria. Journal of American College of Nutrition, 27(1), 6-11.

Hannan, P., French, S.A., Story, M., Fulkerson, J.A. (2002). A pricing strategy to promote sales of lower fat foods in high school cafeterias: Acceptability and senstitivity analysis. American Journal of Health Promotion, 17(1), 1-6