Economic Costs of Bads

© Allen C. Goodman, 2010

Leading Cause of Preventable Death in U.S.

• Cigarette smoking is the leading cause of preventable death in the United States and produces substantial health-related economic costs to society.

• CDC calculated national estimates of annual smoking-attributable mortality (SAM), years of potential life lost (YPLL), smoking-attributable medical expenditures (SAEs) for adults and infants, and productivity costs for adults.

• Results show that during 2000-2004, smoking caused approximately 390,000 premature deaths in the United States annually and approximately $193 billion in annual health-related economic losses. Implementation of comprehensive tobacco-control programs as recommended by CDC could effectively reduce the prevalence, disease impact, and economic costs of smoking.

https://apps.nccd.cdc.gov/sammec/reports.asp

Table 1: Smoking Incidence, 18 Years and Older, 2001-2002 Numbers and Percentages of Smokers by Age Percent

Variable Men Women Male

Age 18-24 4,643,270 3,777,928 55.1% 25-34 5,782,373 4,956,405 53.8% 35-44 6,170,809 5,699,452 52.0% 45-54 5,503,913 4,336,871 55.9% 55-64 2,981,174 2,573,541 53.7% 65+ 1,736,843 1,869,902 48.2%

Total Smokers 26,818,381 23,214,098 53.6% Population/Percentages Men Women Total Population 99,615,072 108,260,000 207,875,072 Total Smokers 26,818,381 23,214,098 50,032,479 Percentage Smokers 26.9% 21.4% 24.1%

Source: NESARCDatabase

Disease Category Male Female Total

Malignant Neoplasms

Lip, Oral Cavity, Pharynx 3,749 1,144 4,893

Esophagus 6,961 1,631 8,593

Stomach 1,900 584 2,484

Pancreas 3,147 3,536 6,683

Larynx 2,446 563 3,009

Trachea, Lung, Bronchus 78,680 46,842 125,522

Cervix Uteri 0 447 447

Kidney and Renal Pelvis 2,827 216 3,043

Urinary Bladder 3,907 1,076 4,982

Acute Myeloid Leukemia 855 337 1,193

Subtotal 104,472 56,376 160,849

Average Annual Smoking-Attributable Mortality (United States, 2000-2004)

Cardiovascular Diseases

Ischemic Heart Disease 50,884 29,121 80,005

Other Heart Disease 12,944 8,060 21,002

Cerebrovascular Disease 7,896 8,026 15,922

Atherosclerosis 1,282 611 1,893

Aortic Aneurysm 5,628 2,791 8,418

Other Circulatory Diseases 505 749 1,254

Subtotal 79,139 49,358 128,494

Respiratory Diseases

Pneumonia, Influenza 6,042 4,381 10,423

Bronchitis, Emphysema 7,536 6,391 13,927

Chronic Airway Obstruction 40,217 38,771 78,988

Subtotal 53,795 49,543 103,338

Average Annual Total 237,406 155,277 392,681

Male Female

Disease Category Male Female Total

Malignant Neoplasms

Lip, Oral Cavity, Pharynx 65,336 19,047 84,383

Esophagus 108,847 25,382 134,229

Stomach 27,602 8,971 36,573

Pancreas 50,201 53,334 103,535

Larynx 38,012 9,914 47,926

Trachea, Lung, Bronchus 1,118,359 770,655 1,889,014

Cervix Uteri 0 11,918 11,918

Kidney and Renal Pelvis 43,898 3,722 47,620

Urinary Bladder 44,166 13,245 57,411

Acute Myeloid Leukemia 12,527 5,496 18,023

Subtotal 1,508,948 921,684 2,430,632

Average Annual Smoking-Attributable Years of Potential Life Lost (United States, 2000-2004) 1,2

Cardiovascular Diseases

Ischemic Heart Disease 804,551 389,974 1,194,525

Other Heart Disease 55,621 31,745 87,366

Cerebrovascular Disease 127,280 140,894 268,174

Atherosclerosis 11,814 5,475 17,289

Aortic Aneurysm 70,512 34,192 104,704

Other Circulatory Diseases 6,636 9,386 16,022

Subtotal 1,076,414 611,666 1,688,080

Respiratory Diseases

Pneumonia, Influenza 29,828 23,438 53,266

Bronchitis, Emphysema 42,842 40,844 83,686

Chronic Airway Obstruction 421,721 462,973 884,694

Subtotal 494,391 527,255 1,021,646

Average Annual Total 3,079,753 2,060,605 5,140,358

Male Female

Average Annual Smoking-Attributable Productivity Losses

• The economic costs of lost work time among adults because of deaths from smoking.

• Productivity losses in Adult SAMMEC are defined as the present value of estimated loss of future earnings from paid work and the estimated imputed value of future unpaid household work attributable to premature deaths from smoking.

Average Annual Smoking-Attributable Productivity Losses (United States, 2000-2004)1,2,3

Disease Category Male Female Total

Malignant Neoplasms

Lip, Oral Cavity, Pharynx 1,613,319 354,635 1,967,954

Esophagus 2,464,063 433,273 2,897,336

Stomach 600,702 157,891 758,593

Pancreas 1,162,577 884,761 2,047,338

Larynx 853,914 186,317 1,040,231

Trachea, Lung, Bronchus 23,189,096 13,597,333 36,786,429

Cervix Uteri 0 307,412 307,412

Kidney and Renal Pelvis 997,062 70,680 1,067,742

Urinary Bladder 742,898 174,529 917,427

Acute Myeloid Leukemia 272,429 99,772 372,201

Subtotal 31,896,060 16,266,603 48,162,663

Cardiovascular Diseases

Ischemic Heart Disease 19,019,062 6,068,242 25,087,304

Other Heart Disease 1,134,588 428,084 1,562,672

Cerebrovascular Disease 3,075,304 2,878,017 5,953,321

Atherosclerosis 155,198 40,423 195,621

Aortic Aneurysm 1,339,220 445,625 1,784,845

Other Circulatory Diseases 134,357 133,702 268,059

Subtotal 24,857,729 9,994,093 34,851,822

Respiratory Diseases

Pneumonia, Influenza 448,507 273,061 721,568

Bronchitis, Emphysema 708,007 532,162 1,240,169

Chronic Airway Obstruction 6,306,543 5,545,304 11,851,847

Subtotal 7,463,057 6,350,527 13,813,584

Average Annual Total 64,216,846 32,611,223 96,828,069

Male Female

Methods of Analysis (1)• The disease impact of smoking was estimated by using the

Adult and Maternal and Child Health Smoking-Attributable Mortality, Morbidity, and Economic Costs (SAMMEC) software (4).

• Smoking-attributable deaths were calculated by multiplying estimates of the smoking-attributable fraction (SAF) of preventable deaths by total mortality data for 18 adult and four infant causes of death.

• For adults, SAFs were derived by using relative risks (RRs) for each cause of death and current and former cigarette smoking prevalence for two age cohorts: persons aged 35--64 years and persons aged >65 years.

• For infants, SAFs were calculated by using RRs of death for infants of women who smoked during pregnancy and maternal smoking rates from birth certificates

• Smoking-attributable YPLL and productivity costs were estimated by multiplying age- and sex-specific SAM by remaining life expectancy and lifetime earnings data, respectively. Smoking-attributable fire deaths were included in the SAM and YPLL estimates.

• SAM included lung cancer and heart disease deaths attributable to exposure to secondhand smoke.

Methods of Analysis (2)

CDC Viewpoint• Cigarette smoking continues to be the principal cause

of premature death in the United States and imposes substantial costs on society.

• Cigarette smoking continues to result in substantial costs. The economic costs of smoking in the United States are estimated at $193 billion annually ($96.8 billion in productivity losses from premature death and $96 billion in health-care expenditures)

ReferencesCDC. Smoking-attributable mortality and years of potential life lost---United States, 1984. MMWR 1997;46:444--51.

Max W. The financial impact of smoking on health-related costs: a review of the literature. Am J Health Promot 2001;15:321--31.

CDC. Best practices for comprehensive tobacco control programs---August 1999. Atlanta, Georgia: U.S. Department of Health and Human Services, CDC, 1999.

CDC. Smoking-attributable mortality, morbidity, and economic costs (SAMMEC): adult SAMMEC and maternal and child health (MCH) SAMMEC software, 2002. Available at http://www.cdc.gov/tobacco/sammec.

Thun MJ, Day-Lally C, Myers DG, et al. Trends in tobacco smoking and mortality from cigarette use in Cancer Prevention Studies I (1959 through 1965) and II (1982 through 1988). In: Changes in cigarette-related disease risks and their implication for prevention and control. Smoking and tobacco control monograph 8. Bethesda, Maryland: U.S. Department of Health and Human Services, Public Health Service, National Institutes of Health, National Cancer Institute, 1997; 305--82.

Hall JR. The U.S. smoking-material fire problem. Quincy, Massachusetts: National Fire Protection Association, Fire Analysis and Research Division, 2001.

National Cancer Institute. Health effects of exposure to environmental tobacco smoke: the report of the California Environmental Protection Agency. Smoking and tobacco control monograph 10. Bethesda, Maryland: U.S. Department of Health and Human Services, National Institutes of Health, National Cancer Institute, 1999.

Miller VP, Ernst C, Collin F. Smoking-attributable medical care costs in the USA. Soc Sci Med 1999;48:375--91.

CDC. Declines in lung cancer rates---California, 1988--1997. MMWR 2000;49:1066--9.

Fichtenberg CM, Glantz SA. Association of the California Tobacco Control Program with declines in cigarette consumption and mortality from heart disease. N Engl J Med 2000;343:1772--7.

Also, Surgeon General’s 2004 Report at http://www.cdc.gov/tobacco/sgr/sgr_2004/index.htm

Alcohol and Drugs

• Key issues involve defining costs.

• Property theft, for example, is an economic cost ONLY to the extent that it leads to increased resources needed to prevent it, or to punish perpetrators.

• Otherwise it is a transfer.

Substance Abuse Costs

• For substance abuse and substance abuse treatment, one must be careful in defining the internal and the external costs and benefits. Substance abuse imposes three major costs that are fundamentally internal to the individual and his or her family.

– Reduced productivity on the job, and hence reduced earnings.

– Reduced health for the individual, even if his or her earnings are not affected.

– Earlier death.

Substance Abuse Costs (2)• Assuming that these costs are understood, the individual

and his/her family choose or choose not to treat substance abuse conditions.

• There are, however, external costs attributable to substance abuse. Drinking may lead to violence against other people, and drunken drivers kill innocent people on the highways. Drinking, by itself or in concert with other substance abuse, may lead to criminal activity.

• Pregnant women who drink risk damage to their unborn children. These items suggest that there may be a societal choice to provide alcohol and substance abuse treatments even to those who would not choose it for themselves.

1992 1995

Dollars Percent Dollars Percent

18820 12.71 22490 13.5

5573 6660

13247 15830

106997 72.29 119302 71.63

31327 34921

Motor vehicle crashes 11100 12373Other causes 20227 22548

69209 77150

6461 7231

Incarceration 5449 6098Victims of crime 1012 1133

22204 15 24752 14.86

Crime 6312 7036

683 761

13619 15182

1590 1772

Total 148021 100 166543 100

Fire destruction

Note: Components may not sum to totals due to rounding

Source: Harwood, Fountain, and Livermore (1992), Table 1.3Items in italics have been extrapolated by the author.

Lost earnings - crime/victims

Other Impacts

Social welfare administration

Motor vehicle crashes

Medical consequences

Productivity Impacts

Lost earnings - premature death

Lost earnings - illness

Health Care Expenditures

Specialty alcohol

Table 1 - The Economic Costs of Alcohol and Drug Abuse in the United States - 1992, 1995 (in $000,000)

1992 1995

Motor vehicle crashes 11100 12373

1012 1133

Crime 6312 7036

683 761

13619 15182

1590 1772

34316 38258

United States - 1992, 1995 (in $000,000)Table 2 - Total External Costs Due to Alcoholism in the

Fire destruction

Total External Costs

Note: Components may not sum to totals due to rounding

Source: Harwood, Fountain, and Livermore (1992), Table 1.3

Lost earnings - victims of crime

Other Impacts

Social welfare administration

Motor vehicle crashes

Costs to People

Lost earnings - premature death

Interventions

Fleming and colleagues (2000) evaluated a brief intervention remedy to at-risk or problem drinking. The study was confined to problem drinkers, defined as men who consumed more than 14 drinks per week (168 g alcohol/week) and women who consumed more than 11 drinks per week (132 g alcohol/week).

There are six essential components to brief intervention. Physician:1.  States his/her concern.2.  Provides specific feedback to patients on how their drinking is affecting

them (e.g. elevated blood pressure, liver function problems, family problems).

3.  Gives a clear recommendation about changing patients’ alcohol use.4.  Negotiates a drinking contract.5. Provides a self-help booklet.6. Establishes follow-up procedures.

Benefits and Costs

Study team assessed the benefits and costs of brief intervention, including emergency room and outpatient and inpatient hospital use, automobile accidents and traffic violations, criminal activity, alcohol and substance use, and health status measures. The costs were measured for those who participated in the intervention. The benefits are reported as avoided costs, comparing the 392 study patients with a randomized control group (382 patients).

The researchers report a benefit-cost ratio of 5.6:1. The benefits included savings of $195 thousand in emergency room and hospital use and $228 thousand in avoided costs resulting from motor vehicle events and crime for a combined economic benefit of $1,151 per subject.

The estimated total economic cost of the intervention was $80 thousand or $205 per study patient.

Evaluation of Evaluation• This study illustrates the importance of evaluating external effects. Of

the $1,151 in benefits per subject, $620, or 54% were attributable to factors external to the individual, although the authors acknowledge a wide confidence interval around this point estimate. Nonetheless, this finding suggests the importance of a public health intervention rather than a simple individual decision as to whether to get treatment.

• An economist also asks questions when seeing a benefit-cost ratio of 5.6:1. If this measured ratio is a valid one, then why do we not see these types of programs for treating large numbers of alcoholics? Indeed why aren’t the insurers demanding that such programs be established? The Fleming study finds that from the perspective of the managed care organization (excluding the external benefits) the benefit cost ratio was 3.2:1.

References

Fleming MF, Mundt MP, French MT, Barry KL, Manwell LB, Stauffacher EA.  2000. Benefit-cost analysis of brief physician advice with problem drinkers in primary care settings.   Medical Care 38 (1): 7-18.Folland S, Goodman A, Stano M. The Economics of Health and Health Care, Upper Saddle River NJ: Prentice Hall, 2001.French MT.  2000.  Economic evaluation of alcohol treatment services.  Evaluation and programming planning, 23 (1): 27-39.Goodman AC, Nishiura E, Humphreys RS. 1997. Cost and usage impacts of treatment initiation: a comparison of alcoholism and drug abuse treatments. Alcohol Clin. Exp. Res., 21 931-938.Harwood H, Fountain D, Livermore G. The Economic Costs of Alcohol and Drug Abuse in the United States, 1992. http://www.nida.nih.gov/EconomicCosts/. Jones KR, Vischi TR (1979) Impact of alcohol, drug abuse and mental health treatment on medical care utilization Medical Care 17: 1.Yates BT. Measuring and Improving Cost, Cost-Effectiveness, and Cost-Benefit for Substance Abuse Treatment Programs. Bethesda MD: National Institute on Drug Abuse, 1999.

http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5114a2.htm

Smoking-attributable mortality (SAM), Years of potential life lost (YPLL), Smoking-attributable medical expenditures (SAEs)

http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5114a2.htm