Cigarette Smoking and Lifetime Medical Expenditures

The cumulative impact of excess medical care required by smokers at all ages while alive outweighs shorter life expectancy, and smokers incur higher expenditures for medical care over their lifetimes than never-smokers. This accords with the findings by Manning et al. (1989) of positive lifetime medical care costs per pack of cigarettes, but disagrees with the results found by Leu and Schaub (1983, 1985) for Swiss males. The contradictory conclusions of the analyses are undoubtedly due to a large difference in the amount of medical care used by smokers relative to neversmokers in the United States and Swiss data. Excess expenditures increase with the amount smoked among males and females so that lifetime medical costs of male heavy smokers are 47 percent higher than for neversmokers when discounted at 3 percent. Each year more than one million young people start to smoke and add an extra 9 to 10 billion (in 1990 dollars discounted at 3 percent) to the nation's health care bill over their lifetimes. Given the smoking behavior, medical care utilization and costs of care, and population size embedded in the data used in this analysis, I have concluded that in the first five years from baseline the population of smokers aged 25 and over incurs excess medical expenditures totaling 187 billion, which is 2, 324 per smoker. The excess cost of medical care associated with cigarette smoking is 18 percent of expenditures for hospital care, physicians' services, and nursing-home care required by all persons (smokers and neversmokers) aged 25 and over. In the absence of large and rapid changes in the values of the underlying parameters, 187 billion, 18 percent of medical expenditures, can be taken as the premium currently being paid every five years to provide medical care for the excess disease suffered by smokers. Even without the addition of any new smokers, the present value of the bill that will be incurred for excess medical care required by the current population of smokers over their remaining lifetimes is high. The civilian noninstitutionalized population of cigarette smokers in 1985 who are age 25 and older is expected to incur over its remaining lifetime excess medical expenditures of 501 billion, or 6, 239 per smoker. It is possible that future changes beyond recent historical trends in the habits of those who currently smoke, such as reductions in the amount smoked, higher rates of quitting, whether occurring fortuitously or brought about by design, may result in lower costs of smoking than estimated. (ABSTRACT TRUNCATED AT 400 WORDS)