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I L L G (2) FAILURE TO REVIEW--.MAJORITY-' OF -RELEVANT- RESHARCH-' (2.1) Costs of Smoking to the Nation The author fails to cite and/or discuss a large number of important studies which address the issue of the possible cost of smoking to the nation. These include:: Simon (1968), Hendrik (1971), Williams and Justus (1974), Boden (1976), Freeman, et al (1976), Forbes and Thompson (1983), Vogt and Schweitzer (1985), Oster, Colditz and Ke::ly (1984), Leu and Schaub (1983),Schultz (1985) and National Interagency Council on Smoking and Health (1980). The absence of any consideration of these studies is significant as illustrated by the following considerations. Schultz (1985) concluded that while there are a number of studies of the costs of smoking, no one has addressed all the relevant aspects. Leu and Schaub (1983) concluded that lifetime medical care expenditures of smokers are not higher, and possibly are even lower than those o:= non-smokers. The National Interagency Council on Smoking and Health (1980) found in a survey of 3,000 companies, th,3t less than 1 percent had calcu~ated costs due to smoking. Rice, et al (1984) concluded that the results of the major :3tudies on the costs of smoking cannot be compared since the types of costs, diseases and categories of smokers included, and the methodology employed vary among the studies. OD ~ ~ C!T 0) W;~b

(2.2) Impact of _ Long Run Reducrt ions-- in Smok ing on--- the Economy The author fails to cite and/oi discuss any of the [ studies which have attempted to measure the impact of long run reductions in smoking on the economy (Atkinson and Townsend (1977) and Gori and Richter (1978)). Gori and Richter used the Wharton Long Term Econometric Model to forecast certain economic effects of the reduction in smoking. They concluded that the direction of changes in important economic variables was uncertain, and that their results were extremely sensitive to the input assumptions. Rice (1984), :.n commenting on this and other long term effects studies, concluded that "a good deal more analysis is required before we can be confident about long-run effects of changes in smoking patterns." (2.3) Capturing the Benefits of Smoking Cessation The author of the Chapter 10 Appendix does not address this particularly important aspect of the workplace costs of smoking. In fact, she fails to cite and discuss the research presented in one of her key citations, K::istein (1983). Kristein lays out a five step methodology for estimating the benefits of a workplace smoking cessation program. He divides the costs into two categories: shortterin (1 to 3 years) and long-term (greater than 3 years). Short term costs include absenteeism, productivity losses, fire losses, etc., while long-term losses include health insurance, life insurance, etc. Kristein says that the capture of t:ie long-term costs of smoking reduction may take 10 to 15 years;; he presents this as R -

a conclusion of the -literature in the fteld. He also notes- that the literature attempting to link smoking cessation and health promotion to improvement in the health and-non-health outcomes is "unfortunately, weaker than one would prefer." Finally, Kristein says that in order for companies to recapture the short and long-term costs of workplace smoking, labor turnover rates must be less than 33% (short-term.) and 10% (long-term). (3) FAILURE TO PRESENT AND DISCUSS ALL RELEVANT RESEARCH FINDINGS (3.1) Findings Which are Inconclusive or Don't Support Author's Views The author cites the Rice, et al (1984) paper and L its presentation of smoking costs estimates from three key studies. She says that these "three key studies ... demonstrate enough similarity (costs estimates are close) to underscore that smoking does cost the nation a staggering amount." However, what she fails to cite from the Rice study is crucial. The referenced three key studies estimated smoking costs by applying "attributable risks" to the direct arld indirect costs of three diseases: neoplasms, circulatory diseases, and respiratory diseases. Rice states that, "the Go (P apparent similarities of these (aggregate cost) estimates ma.sk ~ the substantial differences in estimated costs of the three ~ C11 ~ component diseases. There is, in general, a lack of ~ I

I I L consistency- among the studies -in --terms--of the- magni-tudes- of the estimated proportions for a given medical condition." Rice concludes that the substan,tial differences among the three studies with respect to the costs of smoking associated with each of the three disease categories studied tended to cancel out in the aggregate and resulted (as the author of Appendix 10 states) in three estimates of: total smoking costs which were very similar. Because of the fortunate cancelling out effect, which is purely accidental, t:he aggregate cost numbers for each of the three cited studies were close in magnitude. Viewed in this light, one must strongly refute the author's conclusion that the closeness of: total cost estimates among the three studies underscores that smoking costs the country a staggering amount. (3.2) Findings Related to Serious Methodological Problems and Data Deficiencies Appendix 10 fails to address the vast differences in the categorization and definition of smoking costs which are observed in the research literature. It is very likely, that the observed differences in cost definit:.ons are a major source of the extreme difficulty encountered by researchers in their attempts to derive consistent and scientifically-based estimates. Identified from the articles cited by the author in Appendix 10, the following list of cost definition (Z ~ alternatives demonstrates the disparity encountered: N U1 ~ 0 prevalence-based versus incidence-based costs. ~

o long-term versus-shor-t-term-co:3-ts: o direct, indirect and intangible costs. o company costs, individual costs (smoker versus nonsmoker) and societal costs. o current dollar versus nominal dollar costs. o present value costs versus non•-discounted costs. The most serious omission, however, is the author's profound failure to address the comprehe»sive discussions found in the literature, including the research she cited, (Kristein; Rice, et al) concerning the a:lmost insurmountable problems associated with the measurement of workplace smoking costs. Kristein (1984) states the implications of this problem as follows: I- I i f 1. "[Flor managers used to dealing wit],i hard numbers it is difficult to think of developing a ~~ompany (smoking) po.licy based on inferences from estimates. Many of them believe that true proof of the net 3ain of adopting a company smoking policy is missing, l:)ecause there is no smoking gun type of evidence that smoking employees involve a net cost to their employers that can be eliminated through nonsmoking policies." Kristein (1983) concisely summarized the current state-of-the-art in smoking cost measurement and its profound dilemma as follows: "[W]e lack meaningful 'case-controlled' company comparisons of experience with smoking versus nonsmoking versus ex-smokers and the impact on company costs. Therefore, we must work from aggregste national epidemiological data on illness and other costs associated with smoking and attempt to apportion a realistic share to smoking employees.... . To attempt a scientifically-based answer to the question of how much employee smoking is actually costing the typical American business-and by how--much this cost-zan be_reduced would require studies and data we do not now -- and most likely

will never -- possess.- Thus-, it-° wou-ld -be--necessary-=to have data reflecting at least a 20-year follow-up of at least one case-control led study comparing a company with several thousand employees that had pursued a smoking cessation effort with a similar company that has not pursued such a program... . Nothing in the literature even approaches such data. There have been aggregative and special epidemiological studies and estimates of overall extra-illness rates of smokers versus nonsmokers and versus ex-smokers, however, in addition, there is extensive literature on the relationship between chronic diseases and smoking based on population and laboratory epidemiology. Also there are studies, generally with serious research limitations, of various populations dealing with measures of -productivity, absent'eeism, involuntary smoking, and smoking and occupational health." Rice, et al (1984) discuss the substantially different assumptions made by prior researchers (Luce and Schweitzer, 1978; Leu and Schaub, 1983; Boden ,1976; and.OTA, 1985) concerning attributable risk, which is the proportion of differences in disease rates between smokers and nonsmokers which can be attributed to smoking as opposed to other socio-economic, genetic characteristics of smokers. Although the author of Appendix 10 cites the Rice article as important because it updates (puts in 1984 dollars) the estimates from three "key" studies of costs of smoking to the nation and finds the three estimates close, she fails to cite and/or discuss perhaps the most important finding of that research. As previously discussed in this memorandum, significant differences in assumptions concerning attributable risk led the three groups of researchers to arrive at substantially different cost estimates for the three diseases studied. These differences fortuitously and..accidentaLly cancel-led out-

r when-aggregating -the: costs. across the.thi-ee: diseases .to-arri-ve= at estimates of the total cost of smoking.

BIBLIOGRAPHY I I L t Atkinson, A.S., and J.L. Townsend. 1977. "Economic Aspects of Reduced Smoking." Lancet 8036:492-95. Boden, L.I. 1976. "The Economic Aspects of Environmental Disease on Health Care Delivery." Journal of Occupational Medicine 18:467-72. Forbes, S.F., and M.E. Thompson, 1983. "Estimating the Health Care Costs of Smokers." Canadian Journal of Public Health 74:183-90. Freeman, R.A., C.R. Rowland, N.C. Smith, 5. Cabell Schull, and D.D. Garner. 1976. "Economic cost of Pulmonary Emphysema: Implications for Policy on Smoking and Health." Inquiry 13:15-22. Gori, G.B., and B.J. Richter. 1978. "Macroeconomics of Disease Prevention in the United States." Science 200:1124-30. Hendrik, J.I., 1971. "The Economic Costs of Cigarette Smoking." HSMHA Health Reports 86:179-82. Kristein, M.N., 1983. "How Much Can Business Expect to Profit from Smoking Cessation?" Preventive Medicine 12:358-81. Kristein, M.N., 1984. "Wanted: Smoking Policies for the Work Place." Business and Health. Leu, R.E., and T. Schaub. 1983. "Does Smoking Increase Medical Care Expenditure?" Social ,3cience Medicine 17:1907-14. Luce, S.R., and S.O. Schweitzer. 1978. 'Smoking and Alcohol Abuse: A Comparison of Their Economic Consequences," New Enaland Journal of Medicine 298:569-71. National Interagency Council on Smoking ,3nd Health, 1980. "Smoking and the Workplace." Office of Technology Assessment. 1985. "Smoking-related Deaths and Financial Costs." OTA Staff Memorandum. Health Program, U.S. Congress. Oster, G., G.A. Colditz, and N.I. Kelly. 1984. "The Economic Costs of Smoking and Benefits of Quitting for Individual Smokers." Preventive Medicine 13:377-89.

Rice, D.P., T.A. Hodgson,.. P. Sinsheimer-,- W.: Browner_.-and A.N.._ Ropstein. 1984. "The Economic Cost:; of the Health Effects of Smoking." The Milbank Quarterly, 64: (4). Schultz, J.M. 1985. "Perspectives on the Economic Magnitude-of Cigarette Smoking." New York State Journal of Medicine 85:302-6. Simon, J. 1968. The Health Economics of Cigarette Consumption." Journal of Human Resources 3:111-17. Vogt, T.N., and S.O. Schweitzer. 1985. "Medical Costs of Cigarette Smoking in a Health Maintenance Organization." American Journal of Epidemiology 122:1060-66. Weis, W.L. 1981. "No Ifs, Ands or Buts: Why Workplace Smoking Should be Banned." Management World 339-44. Williams, J.R., and C.G. Justus. 1974. "Evaluation of Nationwide Health Costs of Air Pollution and Cigarette Smoking." Journal of the Air Pollui:ion Control Association 24:1063-66. ~