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OTA TESTIMON Y Statement of Roger Herdman, M.D. Acting Director Office of Technology Assessment and Maria Hewitt, Dr.P.H. Senior Analyst, Health Program Office of Technology Assessment and Mary Laschober, M.S. Analyst, Health Program Office of Technology Assessment On Smoking-Related Deaths and Financial Costs: Office of Technology Assessment Estimates for 1990 Before the Senate Special Committee on Aging Hearing On Preventive Health: An Ounce of Prevention Saves a Pound of Cure May 6, 1993 W O~ TA~ Congress d the United States ~~'~j` J/' Office of Tecfmobgy Assessment Washington, DC 20510-8025

SMOKING-RELATED DEATHS AND FINANCIAL COSTS: OFFICE OF TECHNOLOGY ASSESSMENT ESTIMATES FOR 1990 Cigarette smoking causes cancer, respiratory disease, and circulatory system disease, all conditions that contribute greatly to disability and death in the United States. In 1991, an estimated 46 million adults in the United States (26 percent) were current smokers and for the first time in nearly two decades smoking prevalence did not decline (MMWR, April 2, 1993;USDHHS, CDC, CCDPHP, 1989). Until many more U.S. residents stop or curb their smoking, smoking will continue to be the largest source of preventable death and disability and will burden the health care system with avoidable health care costs. At the request of the Senate Special Committee on Aging, OTA has assessed the extent of smoking-related deaths and overall financial costs for 1990 and has developed estimates of the smoking-related health care costs borne by the Federal government through the Medicare, Medicaid, and other government-financed programs. These estimates update earlier ones published bv OTA in 1985 (OTA, 1985). OTA Smoking-Attributable Mortality Estimates OTA estimates that smoking-related illness accounted for nearly one in five deaths in 1990, killing as many as 417,000 U.S. residents (table 1).'•Z These smoking-related deaths far exceed the combined number of deaths from 1 OTA's mortality estimate excludes those dying as a consequence of smokeless tobacco and passive smoking. In 1988, an estimated 3,825 U.S. residents died from passive smoking (MMWR, February 1, 1991) and subsequent estimates of deaths attributable to passive smoking have been higher (Steenland, K., 1992). 2 The number of smoking-attributable deaths has declined since 1988 (i.e., from an estimated 434,000 in 1988) primarily because of a general decline in cardiovascular deaths. Smoking-attributable cancer deaths have increased since 1988 (MMWR, February 1, 1991). 1

AIDS, automobile and other accidents, homicide, and suicide (173,000 deaths). In 1990, more than one-fourth of cancer deaths, nearly one-fifth of cardiovascular disease deaths, and one-half of respiratory disease deaths were attributable to smoking (table 1).3 The smoking-related mortality burden falls disproportionately on young-to-middle aged adults. More than one- quarter of all deaths among those age 35 to 64 are smoking-related (table 3). Because many deaths occur at relatively young ages, there are many years of potential life lost due to smoking. Each smoker who died as a consequence of his or her smoking would have, on average, lived at least 15 additional years had they not smoked.4 For the population at large, this premature mortality translates into more than 6 million years of potential life lost (table 4).= OTA's 1990 estimates of the number of smoking-attributable deaths and vears of potential life lost relied on three sources of information: .data on 1990 smoking prevalence (current, former, and never smokers) from the 1990 National Health Interview Survey (table 5) (CDCP, OSH. special tabulation, 1993); .numbers of 1990 deaths (by age, sex, and cause) as reported by the National Center for Health Statistics (USDHHS, PHS, NCHS, Arthur Horn, personal communications, April, 1993);6 and 3 Smoking-attributable deaths by more specific cause-of-death breakdowns are shown in table 2. 4 This assumes that individuals dying from smoking-related causes would have experienced the life expectancy of the total population (i.e., smokers and non-smokers) had they not died prematurely. S If only years of potential life lost until age 65 are considered, smoking- attributable deaths account for over 1 million years of potential life lost (table 4). This estimate assumes that each individual who died would have lived to age 65 had they not smoked. 6 Only deaths due to causes that have been causally linked to smoking were considered. 2

.estimates of the relative risks of dying from smoking-related causes of death, by smoking status, from an American Cancer Society health studv conducted in the early 1980s (table 6). As part of this study, a large group of middle-aged individuals was identified, their smoking status was recorded, and over the next 6 years the risk of death of current and former smokers relative to never smokers was assessed bv cause of death (USDHHS, PHS, CDC, Report of the Surgeon General, 1989).' OTA relied on a computer program called SAMMEC (Smoking Attributable Mortality, Morbidity, and Economic Costs), designed and distributed by the Centers for Disease Control and Prevention's Office on Smoking and Health, to estimate smoking-related mortality and economic impacts (USDHHS, PHS, CDC, OSH; Shultz, J.M., et al., 1991). For example, using epidemiologic data from the American Cancer Society and 1990 U.S. smoking prevalence rates, the SAMMEC program calculates that 91 percent of 1990 trachea, bronchus, and lung cancer deaths (ICD-9 code 162) among males 35 to 64 were caused by smoking (i.e., 28,173 of 31,076 respiratory cancer deaths were caused by smoking). Estimates of smoking-related years of potential life lost rely on estimates of the number of years that would have been lived had the smoking-related premature death not occurred. Estimates of years of potential life lost can be made to age 65 or to average life expectancy. 7 OTA mortality estimates are based on current and former smokers' risks of dying of smoking-related causes relative to never smokers. The relative risk estimates are based on 4 years of follow up (1980-84) of participants of the American Cancer Society Cancer Prevention Study (CPS-II) (USDHHS, PHS, CDC, Report of the Surgeon General, 1989). 3

OTA Smokin¢-Attributable Financial Cost Estimates The greatest "costs" of smoking are immeasurable insofar as they are related to dying prematurely and living with debilitating smoking-related chronic illness with attendant poor quality of life. Measuring the financial costs associated with smoking is an inexact science, but generally three cost components are included: the direct cost of providing personal health care services to those with smoking-related diseases; .the indirect morbidity costs associated with lost earnings from work or housekeeping because of smoking-related illness; and .the indirect mortality costs related to the loss of future earnings from premature death. OTA estimates the total financial cost of smoking in 1990 to be $68.0 billion or $2.59 per pack of cigarettes sold in the United States. The total cost of $68.0 billion includes $20.8 billion in direct health care costs, $6.9 billion in indirect morbidity costs, and $40.3 billion in indirect mortality costs (figure 1) (table 7).8 The total 1990 cost of smoking per smoker is $1,078, and per capita is $272 (table 8). A technical Appendix (attached) provides details on how direct and indirect smoking-related costs are calculated. Direct costs-Direct costs are measured as the expenditures for preventing, detecting, diagnosing, and treating smoking-related diseases and medical conditions (Rice, D.P., et al., 1986). In 1990, the United States 8 The indirect mortality estimate of $40.3 billion is based on a 4 percent rate to discount future lifetime earnings and excludes deaths of persons under age 35. Indirect mortality costs using a 2 and 6 percent discount rate are estimated at $49.4 and $36.6 billion, respectively. If smoking-related deaths of persons under age 35 are included, 1990 indirect mortality costs are estimated to be $41.9 billion (at a 4 percent discount rate). 4

spent an estimated $20.8 billion on health care for smoking-related diseases. representing 3.5 percent of total U.S. 1990 personal health care expenditures. This amounts to about $329 per smoker, $83 per capita, and 79 cents for each pack of cigarettes sold in the United States in 1990 (table 8). OTA estimates that in 1990, Federal, state, and local governments together funded approximately 43 percent, or $8.9 billion, of smoking- attributable direct costs. The 1990 Federal government share was an estimated $6.3 billion or about 24 cents for each pack of cigarettes sold (table 9). Estimated Medicare costs were $3.5 billion, Medicaid costs were $2.7 billion, and spending for other government-funded health programs was $2.7 billion in 1990 (table 9).9 Total government smoking-related direct costs were fairly evenly split between the population under age 65 ($4.5 billion) and the population age 65 and over ($4.3 billion) (table 9). OTA estimated the direct costs of smoking-related illness using the SAMMEC program (US DHHS, SAMMEC;Shultz, J.M., et al., 1991). Data used to estimate direct costs include: 1990 national estimates of personal health care spending broken down by hospital services, physician services, nursing homes, medications and other medical nondurables, and other professional services as published by the Health Care Financing Administration (Lazenby, H.C., ec al., 1992); 9 Other Federal government smoking-attributable direct medical expenditures include those of the following programs and agencies: Workers' Compensation; Department of Defense; Maternal and Child Health; Vocational Rehabilitation; Alcohol, Drug Abuse, and Mental Health Administration; Indian Health Service; and miscellaneous general hospital and medical programs. Other State and local expenditures include those of the Temporary Disability Program, Workers' Compensation, General Assistance, Maternal and Child Health, Vocational Rehabilitation, hospital subsidies, and school health (Levit, K.R., et al, 1991; USDHHS, HCFA, ORD, 1990; Waldo, D.R., et al., 1989). 5

.estimates of the proportion of personal health care expenditures used for the treatment of cancer, cardiovascular disease, and respiratory disease, derived from a 1980 study of health expenditures by disease category (Hodgson, T. and Kopstein, A.N., 1984): and .estimates of utilization of short-stay hospital days and physician visits by smoking status for cancer, cardiovascular disease, and respiratory disease by adults 35 and older, from the 1987 and 1989 National Health Interview surveys. These relative rates of service use were applied to the 1990 personal health care spending estimates for cancer, cardiovascular disease, and respiratory disease to obtain smoking-attributable costs (Schultz, J.M., et al., 1991). Indirect morbidity costs-Smoking-related disease results in productivity losses to the economy through lost time at work (e.g., sick leave) and lost housekeeping services by homemakers. OTA estimates indirect morbidity costs at $6.9 billion or $109 per smoker, $28 per capita, and 26 cents per pack of cigarettes sold in 1990 (table 8).l0 OTA's estimate for smoking-related indirect morbidity costs relies on the SAMMEC program (USDHHS, SAMMEC;Shultz, J.M., et al., 1991). Data used in this estimate include: .1990 population daily earnings;" .average disability days per year for people with smoking-related diseases (work-loss days for employed persons or bed disability days for persons keeping house) estimated from the 1987 National Health Interview Survey; and 10 Methods used to calculate population daily earnings in the SAMMEC program likely overestimate indirect morbidity costs (see technical appendix). 11 Population daily earnings are computed using U.S. population estimates, labor force participation rates, mean annual income, and imputed values for housekeeping services for unemployed and employed men and women (Rice, D.P., et al., 1986). 6

.rates of work-loss and bed-disability days among people with smoking- related diseases for current and former smokers relative to never smokers estimated from the 1987 National Health Interview Survey (Shultz, J.M., et al., 1991). Relative rates of work-loss and bed-disability days of smokers to never smokers (by age and sex) were applied to average disability days to estimate smoking-related lost productivity days for people with cancer, cardiovascular disease, and respiratory disease. These, in turn, were multiplied by age- and sex-specific population daily earnings data. Indirect mortality costs-The foregone earnings of those dying prematurely in 1990 from smoking-related causes amount to $40.3 billion or $639 per smoker, $162 per capita, and $1.54 per pack of cigarettes sold in 1990 (table 8).12 Using the SAMMEC program, OTA calculated indirect mortality costs using two sources of data: the number of smoking-related deaths by age and sex; and .the value of future earnings according to age at death (by sex), discounted by 4 percent to 1990 present-valued dollars.13 Differences Between OTA's 1985 and 1990 Estimates of SmokinQ-Related Financial Costs In 1985, OTA estimated that between $12 to $35 billion were spent to provide medical care to those with smoking-related illness and $39 tc $96 billion were lost in terms of productivity (combined indirect morbidity and mortality costs) because of smoking-related sickness and early death. The middle estimates of these costs sum to $65 billion or $2.17 per pack of 12 The indirect mortality estimate excludes those dying before age 35. 13 Indirect mortality costs discounted by 2 and 6 percent are estimated at $49.4 and $36.6 billion, respectively. 7

cigarettes sold in the United States in 1985. The 1985 OTA cost estimates are surprisingly similar to those made in 1990 ($21 billion for direct and $47 billion for indirect costs). The methods used by OTA in 1985 differ from those used in the current 1990 estimate, so the two estimates are not strictlv comparable. The most important difference is that for the 1985 estimate, in the absence of other data, OTA used smoking-attributable mortality data to estimate smoking-related direct health care costs (table 10). For example, 1985 OTA estimated that approximately one-half of cancer deaths among males under age 65 were attributable to smoking and so assumed that this fraction in of expenditures for cancer care was due to smoking. The service utilization data from the National Health Interview Survey indicate that this estimate was too high. Since OTA published its 1985 estimates, more precise methods have been developed to estimate the portion of disease-specific expenditures attributable to smoking. For example, instead of mortality data, the SAMMEC program uses information on health care service use of smokers (current and former) versus never smokers as reported by those with cancer, cardiovascular disease, or respiratory disease in the National Health Interview Survey. If OTA had used these data, the 1985 estimate for smoking-attributable direct costs would have been lower. The Centers for Disease Control and Prevention is further refining methods used to estimate smoking-related costs and will publish a 1990 estimate by the fall of 1993 (Nelson, D., personal communication, April 1993). The improved direct cost estimation will relv on analvses, bv smoking status, of the 1987 National Medical Expenditure Survev (Rice, D.P., personal communication, April 1993) and will adjust for differences in sociodemographic characteristics that exist between smokers and nonsmokers (Novotny, T.E., personal communication, April 28, 1993). 8

Factors Excluded From OTA's Estimate of Smoking-Related Financial Costs Neither the 1985 nor the 1990 OTA estimate of smoking-related financial costs includes all of the effects that smoking has on the economy or on all government programs. Only the mortality toll of smoking and its effects on direct medical care spending and the indirec` costs of lost productivity and lost earnings were estimated. Smoking currently leads to a substantial loss of life and significant health care spending. Reduction or elimination of smoking would improve health and extend longevity, but may not lead to savings in health care costs. In fact, significant reductions in smoking prevalence and the attendant increase in life expectancy could lead to future increases in total medical spending, in Medicare program outlays, and in the budgets of the Social Security and other government programs (Warner, K.E., 1987). OTA has not estimated what these hypothetical effects might be. Others have assessed these "off-setting" costs in their estimates of smoking-related costs (Manning, W.G., et al., 1991). Conclusions OTA estimates that as many as 417,000 United States residents died in 1990 as a consequence of smoking and that the total financial cost of smoking was $68.0 billion or $2.59 per pack of cigarettes sold in the United States in 1990. Reductions in smoking prevalence would lead to marked improvements in health and gains in years of life for thousands currently dying of smoking- related disease (USDHHS, Report of the Surgeon General, 1990). Health education and smoking cessation programs, especially those targeted to children, adolescents, and young adults might lead to large improvements in longevity and thus represent significant ways to improve health and prevent 9