California tobacco control program saved billions in medical costs

Aug 26, 2008

California's state tobacco control program saved $86 billion--in 2004 dollars--in personal healthcare costs in its first 15 years, according to a study by researchers at the University of California, San Francisco.

During the same period, the state spent only a total of $1.8 billion on the program, a 50-to-1 return on investment, according to study findings. The study is the first that has been able to quantifiably connect tobacco control to healthcare savings, say its authors.

The healthcare savings occurred because the program prevented 3.6 billion packs of cigarettes--worth $9.2 billion to the tobacco industry--from being smoked between 1989, when the state-funded California Tobacco Control Program began, and 2004, when this study ended.

Findings are published in the Aug. 25, 2008 online issue of the journal PLoS Medicine.

"The benefits of the program accrued very quickly and are very large," says Stanton Glantz, PhD, senior author on the paper and director of the UCSF Center for Tobacco Control Research and Education. Glantz, a UCSF professor of medicine, says the reason that the California program had such large and rapid benefits in terms of health care costs was the fact that it is directed at adults, not youth. "When adults stop smoking, you see immediate benefits in heart disease, with impacts on cancer and lung diseases starting to appear a year or two later."

The study found evidence of health cost reductions in the first year after the start of the California program, which focused on adults and social norm change, rather than the more common approach of focusing on adolescent use prevention.

These cost savings also occurred despite a substantial diversion of funding during the mid-1990s and the fact that inflation has eroded the purchasing power of the five-cent per pack cigarette tax that funds the program. The researchers estimate that if the funding had been maintained at the same level of intensity as in the program's early years ($4.76 per capita, about $80 million per year), total health care cost savings over 15 years would have increased from $86 billion to $156 billion.

Large state tobacco control programs have previously been shown to reduce smoking, heart attacks and cancer, Glantz says, but this is the first time researchers have been able to quantify the effects on health costs. He says the breakthrough came by teaming up with James Lightwood, PhD, assistant adjunct professor in the UCSF School of Pharmacy who specializes in mathematical modeling, health economics, and statistics. Lightwood used methods known as "co-integrating regressions," which were developed to analyze financial markets, to account for the changing nature of the determinants of smoking behavior, medical technology and costs.

Using the approach of co-integrating regressions, the researchers modeled the relationship between per capita tobacco control expenditures, per capita cigarette consumption and health care expenditures across the study time frame. They compared those results in California to 38 control states that did not have comprehensive tobacco control programs before 2000.

"We confirmed these results with a wide range of model reliability tests and sensitivity analyses to make sure that the findings we found were not a result of some unobserved third factor," says Lightwood. "For example, including differences between California and the control states on a variety of risk factors did not materially affect the results."

The risk factors included being overweight or obese, hypertension, binge drinking, no regular exercise, demographic factors, cost structure of health care inputs, active physicians per capita, hospital beds per capita, proportion of population receiving Medicaid services, and economic activity.

"The methods in this study can be used to forecast future costs, and will provide important additional means for validating program evaluations that previously did not exist," Lightwood adds.

The study results show that tobacco control programs not only reduce smoking and prevent disease, but also quickly and substantially reduce health care costs, according to Glantz, who also notes that the savings grew over time, reaching 7.3 percent of total health care costs after 15 years. "Large scale tobacco control programs should be an integral part of the medical cost containment that everyone agrees must be part of any health care reform," he emphasizes.

Source: University of California - San Francisco

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User comments : 4

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GrayMouser
2 / 5 (1) Aug 26, 2008
How do you prove a negative? You compare your self to other states?

This appears to have a high bogosity factor.
Glis
4.5 / 5 (2) Aug 26, 2008
Good news! If the state realizes that it can save more money than it would make of taxing the things the FDA may finally ban those evil little sticks. Money and lobbying is the only reason tobacco is everywhere. Now that someone took the time to do an experiment that put a dollar amount on the value of a healthy populus things may start changing.
ancible
2 / 5 (1) Aug 26, 2008
This should have no impact on whether cig's are outlawed. It seems to me that history has suggested that it is better to aim for the highest number of co-existing pathways for action and let the people who live within the system make their mind.

I believe there is also at least two hidden costs when substances (especially habit forming ones) are outlawed: weakening the will of the people by getting them used to relying on government and the societal and financial costs associated with prohibition.
Slamshift
5 / 5 (1) Aug 27, 2008
Interesting. I remember that program as being promoted as an offset to the future healthcare costs of the public due to health concerns experienced by smokers. If that is in fact what has happened here, then kudos.
As far as concerns over outlawing cigs in the first place, ain't gonna happen. The laws in place currently protect industries from extinction by the Gov. Even if there were overriding legal issues that posed a credible threat, this government would not voluntarily excise an entire industry from its econmoic makeup. Simply put, too much money in motion. The ripple effect to the supporting industries would be incalculable.
As much as I am against smoking, I am also against restriction of personal liberties. The compromise of higher taxation on a product that is a voluntarily purchased, non-essential (try telling my dad that) consumer item is far better than actual outlawing for 2 very important reasons: As in the case of Cal., the taxation completely offsets the potential burden to healthcare consumers (and then some, apparently)....and the product is still available for purchase by those who desire it, albeit at an inflated price.
If this isn't a convincing enuf argument, then all one would have to do lower the price is to simultaneously (and this is really the important part) lower ALL costs in ALL of the industries associated with smoking: production, distribution, and healthcare.
If you can get ALL of those companies to voluntarily lower their prices (at the exact same time) to make a pack of smokes on the cheap, then you probably can also walk on water.

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