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Smoking and health expenditures

In the lawsuit against cigarette manufacturers, it was argued by the defendants, after long statistical investigations by world class experts and University professors, that smokers actually cost less to society in general, because their increased health expenditures costs (lung cancer etc.) are more than offset by premature death, and thus the government does not have to pay much to them in terms of retirement benefits, medicare etc.

Is this true?

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Permalink Reply by Vincent Granville on August 29, 2008 at 10:44am

Also, the government receives lots of taxes from the sales of cigarettes. But I am sure that there are hidden costs, difficult to quantify, and that the statisticians have not incorporated in their model:

time lost a work (sick days, but also cigarette breaks)
increased health issues when combined with drinking (effects don't add up, they multiply)
impact on children (other than second hand smoke) and personal finances

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Permalink Reply by Stefan Lhachimi on September 1, 2008 at 2:18pm: Well, of course we are talking about models which are only as good as the (usually simplyfing) assumptions are acceptable. Some models, just using government transfers, come to the conclusion that there is no increased (monetary) cost of smoking to the government.
But the argument has major flaw, it does not take into account the value of life years lost. Just using a "governmental accounting" point of view would actually imply to execute everybody who is unemployed for too long, not earning above a certain threshold, or just used up all the money he paid into the government account because of old age.
Furthermore, the true peril of smoking lies in its high addictivness. Hence, the indvidual is actually not making a free choice between his health loss vs pleasure gain but is going down a slippery road beyond his or her control and steadily increasing his nicotine consumption.; ▶ Reply to This

Permalink Reply by Vincent Granville on September 1, 2008 at 9:15pm: More interesting discussions from another blog, this time about obese people:

Fat Stats
28th February 2008, 10:30 am by Chris Lloyd
Do obese people impose a disproportionate cost on the health system? Being over-weight is certainly strongly associated with high blood pressure and heart attack, and these diseases certainly impose high costs. At first glance this appears to imply that such people cost more. Can you spot the flaw?

People are always going to die of something. From the point of view of a health economist, the question is whether it is quick and cheap or long and expensive. So a health nut who lives to 100 but spends the last 10 years in a nursing home with Alzheimer’s might cost a lot more than a chain smoker who keels over on the train in middle age.

It is an empirical question, and one that has been answered – at least in Holland. This paper published in the Public Library of Science Medicine ran a numerical model inputting their best estimates of demographic and epidemiological parameters for the relevant diseases. Not surprisingly they found that

Until age 56 y, annual health expenditure was highest for obese people. At older ages, smokers incurred higher costs.

But the story was different for total lifetime cost.

Because of differences in life expectancy, however, lifetime health expenditure was highest among healthy-living people and lowest for smokers. Obese individuals held an intermediate position. Alternative values of epidemiologic parameters and cost definitions did not alter these conclusions.

Get that? Even smokers actually cost the health system less! I expect that amateur bungie jumpers cost the health system even less again. And Russian roulette players are a veritable bargain. Dangerous and unhealthy behaviour is not necessarily costly to the health system.

There are still great reasons to encourage or cajole or (maybe) even tax people to not smoke and stay thin. They will enjoy many more years of active life. But arguing that these impose costs on society, implies that society has the right to impose conditions on them. In extreme cases this can lead to rather ridiculous and draconian calls such as the recent bill Bill in Mississippi that would have made it illegal for restaurants to serve the obese. Too bad for Elvis if he wanted to eat out.

Of course, there are other indirect costs of being obese – such as lost productivity - which perhaps account for half the total costs, see for instance a recent Access Economics report. But it seems to me that productivity costs, at least, are also taken into account by employers who will presumably not promote low productivity workers or pay them less. So most of the loss of low productivity is borne by the obese person (assuming it is even true that the obese are less productive) rather than the community at large.

Read the 9 replies at http://blogs.mbs.edu/fishing-in-the-bay/?p=150; ▶ Reply to This

Permalink Reply by AJAY OHRI on September 10, 2008 at 5:55am: cost to the govt may be lower , but cost to society is much higher. if someone dies at 50 due to lung cancer, then ideally his cost is much lower since he died premature from median age of death, and worked, but didnot retire.but the cost to his family or to his society in terms of contributions he could have still made cannot be calculated.

smoking is bad. so is obesity. anyone who says so otherwise is just using spin to justify the ends by the means.; ▶ Reply to This

Permalink Reply by Sandra Jasper on May 25, 2009 at 2:25am: I think it is really strange to accuse the cigarette manufacturers of being addicted to cigarettes - the only one you could accuse is the state that they don't forbid cigarettes like all other drugs.
Though we should be aware if we want that we want someone else to decide on whether what we are allowed to do or not.

What about free America??; ▶ Reply to This