Smokers cost society less than non-smokers.

[Willis]

FACT CHECK: Do smokers cost society money?

WASHINGTON – Smoking takes years off your life and adds dollars to the cost of health care. Yet nonsmokers cost society money, too — by living longer.

It's an element of the debate over tobacco that some economists and officials find distasteful.

House members described huge health care costs associated with smoking as they approved landmark legislation last week giving the Food and Drug Administration authority to regulate tobacco products. No one mentioned the additional costs to society of caring for a nonsmoking population that lives longer.

Supporters of the FDA bill cited figures from the Centers for Disease Control and Prevention that smokers cost the country $96 billion a year in direct health care costs, and an additional $97 billion a year in lost productivity.

A White House statement supporting the bill, which awaits action in the Senate, echoed the argument by contending that tobacco use "accounts for over a $100 billion annually in financial costs to the economy."

However, smokers die some 10 years earlier than nonsmokers, according to the CDC, and those premature deaths provide a savings to Medicare, Social Security, private pensions and other programs.

Vanderbilt University economist Kip Viscusi studied the net costs of smoking-related spending and savings and found that for every pack of cigarettes smoked, the country reaps a net cost savings of 32 cents.

"It looks unpleasant or ghoulish to look at the cost savings as well as the cost increases and it's not a good thing that smoking kills people," Viscusi said in an interview. "But if you're going to follow this health-cost train all the way, you have to take into account all the effects, not just the ones you like in terms of getting your bill passed."

Viscusi worked as a litigation expert for the tobacco industry in lawsuits by states but said that his research, which has been published in peer-reviewed journals, has never been funded by industry.

Other researchers have reached similar conclusions.

A Dutch study published last year in the Public Library of Science Medicine journal said that health care costs for smokers were about $326,000 from age 20 on, compared to about $417,000 for thin and healthy people.

The reason: The thin, healthy people lived much longer.

Willard Manning, a professor of health economics and policy at the University of Chicago's Harris School of Public Policy Studies, was lead author on a paper published two decades ago in the Journal of the American Medical Association that found that, taking into account tobacco taxes in effect at the time, smokers were not a financial burden to society.

"We were actually quite surprised by the finding because we were pretty sure that smokers were getting cross-subsidized by everybody else," said Manning, who suspects the findings would be similar today. "But it was only when we put all the pieces together that we found it was pretty much a wash."

Such conclusions are controversial since they assign an economic benefit to premature death. U.S. government agencies shy away from the calculations.

The goal of the U.S. health care system is "prolonging disability-free life," states the 2004 Surgeon General's report on the health consequences of smoking. "Thus any negative economic impacts from gains in longevity with smoking reduction should not be emphasized in public health decisions."

Dr. Terry Pechacek, the CDC associate director for science in the office on smoking and health, said that data seeking to quantify economic benefits of smoking couldn't capture all the benefits associated with longevity, like a grandparent's contribution to a family. Because of such uncertainties the CDC won't put a price tag on savings from smoking.

"The natural train of logic that follows from that is that then anybody that's admitted around age 65 or older that's showing any signs of sickness should be denied treatment," Pechacek said. "That's the cheapest thing to do."

That's another interesting aspect of the debate. Even if we assume that it's society's responsibility to pay the health care expenses associated with smoking, nonsmokers health care costs are higher. Can we stop taxing the people that are less of a burden on the system now?

I also don't understand why calculating the economic benefits of a shorter lifespan is controversial--economists assign monetary value to human life all the time.

[Editor]

As I recall Philip Morris got themselves into some trouble sponsoring a financial analysis in the Czech Republic, which is pretty silly because it basically agreed with anti-smoking zealots in that people who smoke tend to linger less long (or die sooner, if that's the emotive appeal people seek).

My mistake -- they are "Altria" now, apparently -- one of their press releases:

Philip Morris Companies Inc. Comments Regarding Czech Study

NEW YORK
July 26, 2001

Last month a study commissioned by the Czech affiliate of Philip Morris International was released. The funding and public release of this study which, among other things, detailed purported cost savings to the Czech Republic due to premature deaths of smokers, exhibited terrible judgment as well as a complete and unacceptable disregard of basic human values.

For one of our tobacco companies to commission this study was not just a terrible mistake, it was wrong. All of us at Philip Morris, no matter where we work, are extremely sorry for this. No one benefits from the very real, serious and significant diseases caused by smoking.

We understand the outrage that has been expressed and we sincerely regret this extraordinarily unfortunate incident.

We will continue our efforts to do the right thing in all our businesses, acknowledging mistakes when we make them and learning from them as we go forward.

That's a pretty strange response for telling the truth. Here's some media coverage:

Philip Morris is 'extremely sorry' for Czech study
By Simon English in New York
Last Updated: 10:04PM BST 26 Jul 2001

PHILIP Morris, the tobacco giant that makes Marlboro cigarettes, yesterday took a deep breath and issued a grovelling apology for a study which said that smoking was good for the economy.

The report, written on behalf of the Czech Republic arm of the business, caused outrage among anti-smoking campaigners for its claim that one of the "positive effects" of smokers dying early was lower state expenditure on health care and pensions.
 
Politicians jumped to protest. Yesterday some newspapers in the US carried advertisements from anti-smoking groups which showed a picture of a corpse with a toe tag reading: "$1,277. That's how much a study by Philip Morris said the Czech Republic saves on health care, pensions and housing every time a smoker dies."

Somewhat more rationally, here's Pierre Lemieux in the Financial Post:

The Philip Morris Czech Study
by
Pierre Lemieux

     When tobacco companies claimed that there was no evidence that smoking was dangerous to smokers' health, they were scolded as liars. Now that they have been bullied into admitting that they are nasty while politicians and bureaucrats are nice, they are attacked for drawing the public finance conclusion that smokers statistically die younger.

    The reactions to Philip Morris's study on the Public Finance Balance of Smoking in the Czech Republic tell us more about the weight of politically correct opinions than about the economics of smoking. Media reports notwithstanding, the study does not claim to be a cost-benefit analysis. It only purports to analyze the impact of smoking on public finance in the Czech Republic.

    The study estimates that Czech tobacco tax revenues are 29% higher than health care and other publicly financed costs of tobacco-related diseases and mortality. It is consistent with a large number of studies done in many countries over the last 20 years.

    Over the first half of this period, public health specialists who claimed to measure the social cost of smoking monopolized the debate. Their literature claimed that non-smokers had to pay for part of the cost of smokers' health care. But they double-counted some costs and neglected savings or benefits.

    Their arguments were empirically demolished in the early 1980s when economists Robert Leu and Thomas Schaub showed that, in their life cycles, smokers do not incur larger health-care costs than non-smokers, because non-smokers statistically survive longer and incur large health-care costs after smokers have died. If we factor in tobacco taxes and savings in old age public services (pensions, etc.), smokers actually subsidize non-smokers, not the other way around. A large number of studies in other countries confirmed these findings.

    These studies have been so persuasive that even the World Bank, which started an anti-smoking crusade in the early 1990s, seems to accept them. Its 1999 report skirts the issue by talking about "conflicting conclusions," "contentious" issues, and costs that are "more difficult to identify and quantify." A survey published more recently by World Bank researchers excludes tobacco taxes in order to be able to conclude that smokers do not pay their way!

    Defeated on their own grounds, anti-smoking activists changed their tactics. They started arguing, as MIT Professor Jeffrey Harris did in 1993, that "[T]his is not the kind of calculation that a civilized society engages in." Observe the irony again: After attacking smokers as a financial burden to non-smokers, anti-smoking advocates now claim that it is immoral to consider the contrary empirical evidence.

    The real question from a public policy viewpoint is whether there is a net social benefit or a net social cost of smoking, after netting out whatever intrasociety transfers are made. This complex issue eventually boils down to a simple question: Who is better placed to decide what an individual will do with his life, the individual himself, or the Nanny State's politicians and bureaucrats?

[Willis]

This is classic.

Defeated on their own grounds, anti-smoking activists changed their tactics. They started arguing, as MIT Professor Jeffrey Harris did in 1993, that "[T]his is not the kind of calculation that a civilized society engages in." Observe the irony again: After attacking smokers as a financial burden to non-smokers, anti-smoking advocates now claim that it is immoral to consider the contrary empirical evidence.

The snobbery would be funny if it weren't so insulting.

[Editor]

This is interesting. It repeats the dubious claim about reduced health care costs and claims the Fed will benefit marginally ($2 million over 10 years, partly from reduced health care costs -- hardly a bell-ringer as health costs go) while both states (significant loss of tax revenues) and tobacco companies ($half-billion/year) will be significant losers. Que bono? No one, apparently, lending some credence to [non PM] tobacco company claims FDA tobacco control (as proposed) amounts to nothing more than the Philip Morris (Altria?) market share protection act. Guess that is why the Marlboro Man supports FDA interference in the trade of a currently legal product.

FDA tobacco bill could cost U.S. states
Tue Apr 14, 2009 4:06pm EDT
 
WASHINGTON (Reuters) - Legislation recently cleared by the House of Representatives to give the Food and Drug Administration power over cigarettes would save the federal government some money but seriously dent tax revenues collected by states, a congressional report said on Tuesday.

The bill, which passed earlier this month, would also cost the multibillion-dollar tobacco industry $235 million in 2010 and more than $500 million a year by 2013, the Congressional Budget Office said.

It would save the federal government $5 million over five years and $2 million over 10 years, in part by reducing healthcare costs, the CBO estimated.

But state and local governments, which collected about $19 billion in 2008 from taxes on tobacco products, would lose more than $1 billion from 2010 to 2014.

"The amount of tax revenues and settlement funds collected by state and local governments would decline as a result of the federal regulations authorized by this legislation because of lower consumption of tobacco products," the report said.

The bill, sponsored by House Energy and Commerce Committee Chairman Rep. Henry Waxman, a California Democrat, passed the House earlier this month but must still be cleared by the Senate and signed by President Barack Obama to become law.

Massachusetts Democrat Sen. Edward Kennedy, head of the Senate health committee, plans to introduce his version of the bill after Congress returns to work next week, his spokeswoman Melissa Wagoner said.

Waxman's bill calls for the FDA to set up a new center to regulate the marketing of cigarettes and other tobacco products as well as control nicotine content and package labels. It would charge tobacco company user fees to pay for the agency's new workload.

Altria Group Inc's Philip Morris unit, the nation's largest cigarette maker, supports the bill, as do some smaller companies. But others, such as Reynolds American Inc's R.J. Reynolds Tobacco unit and Lorillard Inc's Lorillard Tobacco Co, oppose it.

Additionally, the CBO estimated that Waxman's bill would reduce the number of children and teenagers who smoke 11 percent by 2019 and further curb the number of adult smokers by about 2 percent after 10 years.

The report was posted on the CBO website here.

[Willis]

Waxman's bill calls for the FDA to set up a new center to regulate the marketing of cigarettes and other tobacco products as well as control nicotine content and package labels. It would charge tobacco company user fees to pay for the agency's new workload.

Absolutely nothing is off limits if this bill makes it way through the Senate. What a precedent this will sent.

[Pink Floyd]

We should allow the ingestion of smoke of other plant products - marijuana for instance. Come to think of it, it will reduce the life spans of even more citizens, by larger periods. Come to think of it, that should drive down healthcare costs!

[klemenc003]

Smokers die 10 years earlier than non-smokers but the health care costs to treat these smokers is estimated at $96 Billion per year in direct medical expenses and another $97 Billion a year in lost productivity. Now as Congress debates whether to grant the FDA authority to regulate tobacco,  a 1994 report from a consultant to Phillip Morris is being cited that because non-smokers live longer, their cost to society is greater than smokers who die younger.

[Wes]

For many smokers, such as myself, this is very old news.  The dishonesty of the anti-smoking side is quite similar to and set up a model for the arguments, tactics, and philosophy of the global warmers.

---1. Define the problem as a threat to society.
---2. Ignore inconvenient data.
---3. Seek to silence and marginalize any that disagree.
---4. Make sure the solution involves more Governmental power.
---5. Raise taxes.

See how easy it is.  Of course the taxes are regressive and lead to the poorer shorter lived portions of the population paying an ever larger part of the social costs of the longer lifespan of those who on average are wealthier and do not smoke.

Policies and practices such as these also make the assumption that the people belong to the state and not the other way around.  The position that actions that decrease an individuals potential productivity harm the state and therefore must be corrected make the state our master and each of us its slave.

And of course there is the Nanny State argument that only the government can protect us from the folly of our own choices because we are far to ignorant to see through the evil propaganda of the industry fronting the evil capitalists profiteering on our bad choices.

So we are doing this all over again with global warming.  Cap and Trade or other Carbon taxes, regulation of industry along with funding for dubious science that ignores any “Inconvenient Truth“.  Health and environmental scares leading to more governmental power and less freedom of choice.  Well at least we can now see where the model came from and how well it works.

[LarryOldtimer]

Sure enough!  I have smoked since I was 14 years old, and I am "half-passed 73" as of now.  When I have looked at the predictive models, using my life-style but a birth date 10 years later than real, I find that I died some 10 years ago.

As to falling tax revenues, what government needs taxes when it can borrow all of the money it needs?  So our government certainly thinks.  Of course, that is for the federal government only, as states don't have that privilege by and large.  That is, the interest on the state and local bonds issued eventually causes the rest of state government to begin shutting down so it appears that the budget is "balanced".

See CA at present.  Nothing but a bad joke, but the legislature is passing more bills which would require more state employees and local government employees to administer.  That sucking sound is getting really loud about now there.

[Willis]

Sure enough!  I have smoked since I was 14 years old, and I am "half-passed 73" as of now.  When I have looked at the predictive models, using my life-style but a birth date 10 years later than real, I find that I died some 10 years ago.

As to falling tax revenues, what government needs taxes when it can borrow all of the money it needs?  So our government certainly thinks.  Of course, that is for the federal government only, as states don't have that privilege by and large.  That is, the interest on the state and local bonds issued eventually causes the rest of state government to begin shutting down so it appears that the budget is "balanced".

See CA at present.  Nothing but a bad joke, but the legislature is passing more bills which would require more state employees and local government employees to administer.  That sucking sound is getting really loud about now there.

That sound is literally in my backyard. I'm near deaf from living in Sacramento.

[Richard S Courtney]

Friends:

Before making my contribution here, I declare my personal interest: I am a smoker and I have been for nearly half a century.

I write to provide consideration of two issues.

Firstly, everybody dies but nobody has ever had “smoking” recorded as ‘Cause Of Death’ on a Death Certificate.  But it is a statistical certainty that many people who have died would not have contracted the disease that killed them (e.g. lung cancer) at as early an age as they did if they had not been smokers.

This statistical certainty is because there is an important distinction which few manage to understand:  viz.
smoking does not kill but it does increase susceptibility to some diseases.

Therefore, if there were two identical populations with one of them all being smokers and the other all non-smokers, then the non-smoking population would have a longer life-expectancy.

Simply,
(1)  only those susceptible to a disease will contract that disease,
(2)  some who are susceptible to the disease will contract the disease at an earlier age if they smoke, and
(3)  some who do not smoke will contract that disease.
(4)  some people will die of something else before contracting the disease and, therefore, point (2) means that a larger proportion of smokers will die of the disease because the disease kills some of them before something else does.

The above facts induce considerations that are often presented as being moral issue in the form of;
 â€œIs it right to help ill people who made a choice to accept greater risk of illness?”

But the fallacy of that question is simply demonstrated by presenting similar questions such as;

“Is it right to help injured people who made a choice to accept greater risk of injury;  e.g. by practicing ‘risky’ sports such as rock-climbing or walking along cliff edges?” 
or
“Is it right to help starving people who made a choice to accept greater risk of starvation;  e.g. by failing to grow crops that would survive a drought?” 
or…

All such questions summate to,
 â€œIs it right to help anybody who made a choice that increased their risk of being in their present distress“?

And, according to Judeo-Christian ethics, the only moral answer to that question is,
 â€œAll people in distress deserve help because we all make choices that may turn out to have unfortunate effects.”

So, in fact, the apparent moral dilemma is not a dilemma:  it is an ancient excuse for picking on a minority that, for some reason, is not liked.

Those who present the issue as an apparent moral dilemma know they are wrong, and that is why they also try to present the issue of ‘passive smoking’, but that is another subject.

Secondly, there is the issue of health costs from smoking.  And this issue clearly demonstrates why the apparent moral issue of smoking is a fraud.

The UK established its National Health Service (NHS) in 1948.  And the history of the NHS demonstrates why a smoking population has lower total health costs than a non-smoking population.

The British people value the NHS above almost anything else (this is not the place to discuss the merits of the NHS and I merely state the fact that it is cherished by the British).  In 1948 it was thought that the costs of the NHS would fall with time because the NHS would improve the health of the population, so fewer people would be ill, so costs of treating ill people would fall.

The health of the British population has improved (which is why the British love the NHS) and this improvement has caused NHS costs to escalate.  Indeed, NHS costs continue to escalate because of improving health of the population.

A healthier population lives longer so there are more people to get ill, there are more older people and they are most likely to get ill, and there are more people whose health is such that when they do get ill they survive longer while being treated. These facts each increase overall medical costs (other things also increase costs, e.g. new and more costly treatments, but that is not relevant to this issue).

So, the original expectation was that NHS costs would reduce but this has proven wrong.  It was expected that the health of the general population would improve and this would reduce medical costs: the health of the general population has improved and this has increased medical costs.  In the light of this failure of the original expectation, it is not surprising that several studies of the matter have been conducted by a variety of organisations.  All these studies have each reached the same conclusion;  i.e. lower general health of a population reduces medical costs.

Smoking increases risk of contracting several diseases and, therefore, smokers have lower general health than non-smokers.  Lower general health of a population reduces medical costs.

Simply, on average smokers die younger and take less time to die when they get ill, so on average their medical costs are less than non-smokers.

Richard

[livingwill]

I don't smoke but lying about costs isn't a good thing IMO. Facts are facts and the facts are smokers cost less money to the government and second hand smoke does nothing. The facts are bad enough. I, for one, don't want to save money for the government by dying early.

[LarryOldtimer]

The "smoking is really bad for your health" was justified entirely from stastical data.  All of the data was anecdotal, and no consideration was given as to "dosage" (how much individuals smoked).  Moreover, there was no distinguishing made between filter and non-filter cigarettes.  For 12 years in the 1950s and 1960s, Kent cigarette company used their "Micronite" filter, which was made entirely of asbestos fibers.  Now that is what statisticians call "confounding". 

[livingwill]

A lot of work on lab rats as well. There is little doubt that smokers get a whole lot of diseases a lot easier than nonsmokers.

[LarryOldtimer]

The exact point that I made in reference to dosage.  Lab rats are exposed to hundreds of times more of whatever it is than pack a day smokers.  Some smokers smoke as much as 4 packs per day, and some as little as less than 1/2 pack a day.  Which of these "smokers" are the smokers who get sick more often?  These supposed "statistical" studies are worthless and meaningless.