tobacco use: the real cost -...

Tobacco Use:The Real Cost

Resources for Economic Costs

https://wallethub.com/edu/the-financial-cost-of-smoking-by-state/9520/#

https://www.tobaccofreekids.org/problem/toll-us

https://www.industrydocumentslibrary.ucsf.edu/tobacco/

The Problem

• Tobacco use is leading cause of preventable death in the U.S.

• Smoking kills 480,000 Americans annually (1 out of 5 deaths)

• Smoking causes nearly 90% of lung cancer deaths, 1/3 of total cancer deaths,and nearly 1/3 of heart disease deaths

• Each day, about 2,300 kids in the United States try their first cigarette

• Without urgent action, 5.6 million children alive today will die prematurely fromsmoking-caused disease

Courtesy of Campaign for Tobacco Free Kids

Since 1964:Smoking-related illness = 20 million deaths with 2.5 million related toenvironmental smoke exposure

Tobacco’s Economic Toll• $170 billion in annual health care costs

• including approximately $40 billion in Medicaid costs

• $151 billion annually in productivity losses caused bysmoking

• Smoking-caused health costs and productivity lossesper pack sold in USA (low estimate): $19.16 per pack

• Nationwide, tobacco use costs taxpayers $946 perhousehold to treat tobacco-related disease

Fact or Fake News? Depends Who You Ask and When! (1998)

Let’s Look at the Money: Health Care

• $170 billion in health care expenditures due to CIGARETTESMOKING ONLY:• Medicaid: $39.6 billion (Fed-$22.6, State’s- $17.0)• Medicare: $45.0 billion• Veterans Administration for health care: $23.8 billion

• Health care costs from environmental tobacco smoke:$6.03 billion

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Tobacco-Related Healthcare Costs Tobacco Prevention Spending

State Tobacco Prevention Spendingvs. Health Care Costs

$721.6 million

$170 billion

billi

ons


More Money: Productivity Loss

• Productivity loss from smoking-caused death: $151 billion

• Other productivity loss:• Disability

• Sick days

• Job productivity - six minutes to smoke a cigarette (plus traveltime to go outside!)

https://www.youtube.com/watch?v=zuh2w2sFRMI&feature=youtu.be

STATE ANNUAL HEALTHCARE COST ANNUAL PRODUCTIVITY LOSSES

Alaska $438 Million $205.9 MillionArizona $2.38 Billion $2 BillionArkansas $1.21 Billion $1.7 Billion

California $13.29 Billion $10.35 BillionColorado $1.89 Billion $1.27 BillionDistrict of Columbia $391 Million $280.4 MillionGeorgia $3.18 Billion $3.99 BillionIdaho $508 Million $433.9 MillionKansas $1.12 Billion $1.09 BillionLouisiana $1.89 Billion $2.49 BillionMaine $811 Million $647 MillionMaryland $2.71 Billion $2.22 BillionMassachusetts $4.08 Billion $2.40 BillionMinnesota $2.51 Billion $1.54 BillionMississippi $1.23 Billion $1.80 BillionMontana $440 Million $368.9 MillionNebraska $795 Million $605.5 MillionNew Jersey $4.06 Billion $3.15 BillionNew York $10.39 Billion $7.33 BillionNorth Carolina $3.81 Billion $4.24 BillionNorth Dakota $326 Million $232.6 MillionPennsylvania $6.38 Billion $5.73 BillionRhode Island $640 Million $548.9 MillionSouth Carolina $1.9 Billion $2.35 BillionUtah $542 Million $355.6 MillionVirginia $3.11 Billion $3.06 BillionWashington $2.81 Billion $2.2 BillionWest Virginia $1.00 Billion $1.23 BillionWisconsin $2.66 Billion $2.06 Billion

• PerSmokerBest

• PerSmokerWorst

Other losses: property fires, cleaning and maintenance

Social Security Survivors Insurance for kids who have losta parent from a smoking-caused death

Other Costs

What is the Cost toYOU?!

• Taxpayers yearly fed/state due to government spending forsmoking-caused expenses: $946 per household• 126.22 million households in the United States x $946 =

$119,404,120,000 from taxpayers

• Health costs/productivity losses per pack sold in US: $19.16• 13,550,000,000 packs sold in US annually x $19.16 =

$259,618,000,000

But Do Non-Smokers Win in the Long Term? Average Smoker Dies at Age 69

Other Industry Spending in Politics

• PAC contributions to federal candidates in 2018 cycle =$600,000+

• Lobbying Congress in 2017 = $20.1 million

How Do We Influence Employers?

Loss of ProductivityAmount of Time (hours) You Save

Numberof Packs a

Day 1 Day†

1 Month(30 days) 3 Months 6 Months 1 Year 3 Years 5 Years

½ 1 30 90 180 360 1080 1800

1 2 60 180 360 720 2160 3600

1½ 3 90 270 540 1080 3240 5400

2 4 120 360 720 1440 4320 7200

3 6 180 540 1080 2160 6480 10,800

4 8 240 720 1440 2880 8640 14,400

Source: Beat the Pack

• Health Insurance Premiums

• Corporate Insurance: Fires

• Cleaning and Maintenance

• Employee Satisfaction

• Absenteeism Due to Illness

What Else Should Employers Consider?

How do we Influence Policy-Makers?

State Tobacco Prevention Spendingvs. Total Tobacco Revenue

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Total State Tobacco Revenues CDC Recommended AnnualFunding For Tobacco Prevention

Actual Tobacco PreventionSpending

Billi

ons $19.3 Billion

EstimatedTobacco Tax

Revenues

$8.1 BillionEstimatedTobacco

SettlementRevenues

$3.3 Billion$721.6 Million

$27.4 Billion


State Tobacco Prevention Spending vs. Tobacco Industry Marketing$9.5 billion on marketing per year = $26 million per day

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Tobacco Industry Marketing Spending Tobacco Prevention Spending

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ons

$9.5 billion

$721.6 million


In Virginia, We Present “Super-Facts”to Show Our Impact

Tobacco Prevention Is a Smart Investment

• Tobacco prevention and cessation programs savemoney by reducing health care costs

• California: 2013 study found that between 1989-2008,tobacco prevention program reduced health care costs by$134 billion while it spent $2.4 billion on program

• ROI approximately $50 for every $1 invested

• According to researchers, tobacco control program funding directlytied to reductions in smoking rates and cigarette consumption persmoker, generating significant savings in health care expenditures


Tobacco Prevention Programs Provide Strong ROI

• WA State: AJPH study found that for every $1 spent by thestate on tobacco prevention, more than $5 saved by reducinghospitalizations

• 36,000 fewer hospitalizations; 13,000 fewer prematuredeaths from smoking

• Over 10 year period, program responsible for $1.5billion in healthcare cost savings compared to $260million spent on program

• Cost estimates conservative because they only reflectsavings from prevented hospitalizations and do notinclude costs for doctor visits or drugs


Investing in Tobacco Cessation Saves Money• Massachusetts: Tobacco cessation benefit for allMedicaid clients –

counseling and FDA approved cessation meds

• Study shows that MA saved more than $3 for every $1 it spent onservices to help Medicaid clients quit• Savings are the result of dramatic reductions in hospital admissions for heart attacks

and heart disease following implementation of new benefit

• Reduced hospital admissions translated into annual savings of $14.7 million for stateMedicaid program

• Savings realized little more than a year after the smoking-cessation benefits wereused – demonstrating that there are immediate budget gains from helping Medicaidclients quit

• Savings estimates conservative - do not include long-term savings orsavings that may occur outside the Medicaid program

• Smoking among Medicaid beneficiaries fell significantly in 2.5 years – from 38% to 28%,a 26% decline

• Savings are conservative - do not include long-term savings, savings thatmay occur outside the Medicaid program, or savings beyond hospitaladmissions


Cost of Smoking to an IndividualNumberof Packsa Day

1Day

1Month

3Months

6Months

1Year

3Years

5Years

1 $6.32 $190 $569 $1,138 $2,275 $6,826 $11,375

2 $12.64 $380 $1,138 $2,275 $4,550 $13,650 $22,750

• 8% lower median household income compared to non-smokers

• Workplace bias – views of smokers using time for breaks, notgetting as many promotions

In Summary: The Problem Should have been Solved Years Ago!!1998 – Proposal to have Industry Fund a Prevention Program

Thanks!

Marge White, MA

[email protected]

804-225-3637

Danny Saggese, MBA

[email protected]

804-225-3624

tobacco use: the real cost -...

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