The Cost of Smoking

Today’s Managing Health Care Costs Indicator is $40

Click Image to Enlarge.  Source
I’m taking a break from this month’s Health Affairs today to highlight some posts from The Incidental Economist blog – which has grown to be among my favorites.

Don Taylor, author of “The Price of Smoking” reprises his calculations for the real cost of smoking per pack.

These are
  • $33.00 – the cost of lost life years, lost wages and disability due to smoking  
  • $5.50 – the cost borne by the family – mostly through increased spouse mortality
  • $1.50 – the external cost, which includes increased health care costs (a mere $0.48), nonsmoker subsidy of smoker life insurance ($1.78), lost Social Security contributions ($1.02) and productivity losses ($1.00).   You might notice that this sum is equal to far more than a buck and a half – that’s because smokers ‘save’ the system money through lower pension and Social Security payouts and through taxes they pay for cigarettes. 

Smoking is the most important remediable cause of lost life years – and we should use all the arrows in our social policy quiver to get people to quit smoking.   That includes powerful choice architecture decisions to make smoking inconvenient, and higher taxes to discourage price-sensitive teens from getting hooked.   But the US has among the lowest smoking rates of developed countries, but the highest health care costs.  
Click image to enlarge.  Source 
By Taylor’s calculation, elimination of smoking alone would not solve our health care cost crisis.