The net effect of smoking on healthcare and welfare costs. A cohort study

Abstract

ObjectiveTo study the net economic effect of smoking on society.DesignProspective cohort study.SettingEastern Finland.PatientsWe studied mortality, paid income and tobacco taxes, and the cumulative costs due to pensions and medical care among tobacco smoking and non-smoking individuals in a 27-year prospective cohort study of 1976 men from Eastern Finland. These individuals were 54–60 years old at the beginning of the follow-up.Main outcome measuresThe net contribution of smoking versus non-smoking individuals to public finance balance (euros).ResultsSmoking was associated with a greater mean annual healthcare cost of €1600 per living individual during follow-up. However, due to a shorter lifespan of 8.6 years, smokers’ mean total healthcare costs during the entire study period were actually €4700 lower than for non-smokers. For the same reason, each smoker missed 7.3 years (€126 850) of pension. Overall, smokers’ average net contribution to the public finance balance was €133 800 greater per individual compared with non-smokers. However, if each lost quality adjusted life year is considered to be worth €22 200, the net effect is reversed to be €70 200 (€71.600 when adjusted with propensity score) per individual in favour of non-smoking.ConclusionsSmoking was associated with a moderate decrease in healthcare costs, and a marked decrease in pension costs due to increased mortality. However, when a monetary value for life years lost was taken into account, the beneficial net effect of non-smoking to society was about €70 000 per individual.

Association of smoking with direct medical expenditures of chronic diseases in north of Jordan: a retrospective cohort study

“…A study in Japan comparing life expectancy between male smokers and non-smokers using 11 years of data suggested that at age 40, non-smokers live 3.5 years longer than smokers 25. Also, a study in Finland found that smokers had a 8.6 year shorter lifespan than non-smokers; the mortality rate was 71% (observed age at death, 68 years) among smokers, compared with 37% among non-smokers (observed age at death, 71 years) 26…”

Endgame: engaging the tobacco industry in its own elimination

“…Cost analyses considering both welfare and healthcare expenses in Finland conclude that a smoker costs 71 600 Euros (almost $100 000 US) more to the public than a nonsmoker . The estimate is conservative because the calculation accounts for the cynical fact that smokers die earlier; thus, a state saves some pension and medical insurance cost.…”

“…Governments must decide how much they value their share of the 1 billion global citizens who are expected to die from tobacco in the 21st century. With a shorter lifespan of 8·6 years on average for a smoker , this translates to 8·6 billion life years expected to be lost from smoking. Even if one life year is valued at just half the amount assigned in the Finnish cost analysis , this translates to approximately $100 trillion, about 300 times the worth of the global annual tobacco market and about 500 times the worth of the globally accrued tobacco taxes.…”

“…With a shorter lifespan of 8·6 years on average for a smoker , this translates to 8·6 billion life years expected to be lost from smoking. Even if one life year is valued at just half the amount assigned in the Finnish cost analysis , this translates to approximately $100 trillion, about 300 times the worth of the global annual tobacco market and about 500 times the worth of the globally accrued tobacco taxes. Allocating a small portion of this amount in an incentive plan to extinguish tobacco companies over an agreed number of years should be financially beneficial both to the public and to the transformed company stakeholders.…”

Estimating the Benefits of Public Health Policies that Reduce Harmful Consumption

“…Although some of the discrepancy between this range and the $1167 estimate described previously may result from the willingness‐to‐pay for smoking cessation aids capturing only the misinformation and myopia that consumers themselves recognize and act upon, it is implausible in light of economic theory to assume that no portion of this difference is attributable to lost consumer utility. Cutler and his coauthors acknowledge that their health and longevity estimates overstate net intrapersonal benefits, but a host of other recent smoking studies, published in peer‐reviewed journals or by policy‐makers actively considering tobacco interventions, provide no such caveat (see Applied Economics, ; Industrial Economics, Incorporated, ; Kuklinski et al ., ; Miller et al ., ; and Tiihonen et al ., ). Similar unacknowledged overestimates appear in cost‐benefit analyses of policies related to obesity (Rajgopal et al ., , and Variyam and Cawley, ), and the problem even extends to analyses of environmental regulations (as discussed by Alcott and Greenstone, ).…”