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`I'he Economic C.'ort.r of the Health tiffectt of SnrokinR, 1984 507 So6 D. P. Rice et al. Removing this constraint, Gori and Richter find quite different results for some variables in 2000. With disease prevention, the Wharton model predicts a federal surplus compared to a projected deficit in the absence of disease prevention, with a 65 percent difference in the two estimates. More modest increases in the GNP and government receipts and a much smaller increase in transfer payments are predicted. But with this latter assumption about labor-force participation, much larger increases in unemployment and unemployment benefits result. Gori and Richter rightly caution that the trends shown and not the numbers are important. In any case, for the purpose of our concern with longer-run reductions in smoking and their impact upon the economy, it is important to note that the direction of change in important economic variables is uncertain. The various models can be quite sensitive to assumptions about key parameters, and a good deal more analysis is required before we can be confident about long- run effects of changes in smoking patterns. Estimated Economic Costs of the Health Effects of Smoking Previous studies of the economic costs of smoking, employing the prevalence-based approach, applied global proportions attributable to smoking to illness costs (Hedrick 1971; Luce and Schweitzer 1978). For example, Luce and Schweitzer applied the following smoking percentages to updated cost-of-illness estimates originally published by Cooper and Rice in 1976: neoplasms-20 percent, circulatory system-25 percent, and respiratory system-40 percent. For this article, we have refined the estimates by using the epidemiologic methodology of "attributable risk" to calculate the direct (personal health care expenditures) and indirect (morbidity and mortality) costs associated with cigarette smoking. Attributable risk is "the maximum proportion of a disease that can be attributed to a characteristic or etiologic factor" (Lilienfeld and Lilienfeld 1980) and assumes that other factors influencing the occurrence of smoking-related diseases are equally distributed among smokers and nonsmokers. But smokers differ from nonsmokers in certain genetic, social, and economic characteristics which may contribute to disease. The prevalence of smoking 'varies by race (more blacks smoke than whites), education (fewer college graduates smoke than persons with only some high school), income (males with lower income smoke more, while the opposite holds for women), and occupation (blue- collar workers smoke more than professional or technical workers) (Vogt 1983; Warner 1983). If factors known to be related to health status and smoking habits are not controlled, the impact of smoking on health and the costs of smoking may be overstated. An interesting attempt to overcome this problem by Leu and Schaub (1983) analyzed smoking and medical care expenditures using three types of persons: smokers, nonsmokers, and nonsmoking smokers. The latter is a statistical construction having the smoking habits of a nonsmoker but like a smoker in other respects. Leu and Schaub assumed that 65 percent of smokers' excess mortality was due to smoking and 35 percent to other characteristics of smokers. Although it would be important to account for differences in mortality and morbidity between smokers and nonsmokers not due to smoking, the empirical basis for doing so is not readily apparent, and the Leu and Schaub assumption is arbitrary. The detailed methodology and sources of data for estimating the attributable risks for medical care utilization, morbidity, and mortality and their application to the direct and indirect costs of illness are detailed in the methodology appendix at the end of this article. Summary results are presented below. Disability and Medical Care Utilization Differentials Smokers are sicker and require more medical care than those who do not smoke. Table I records a comparison of the disability and medical care utilization rates for persons 17 years and over who ever smoked (current and former smokers) and those who never smoked, by age and sex; the data are from the Smoking Supplement of the 1979 National Health Interview Survey (NHIS). Higher rates in all the measures are reported for smokers compared with nonsmokers, ranging from 6 percent for physician visits to 72 percent for persons unable to work or keep house. The differentials between male smokers and nonsmokers are especially high. For example, the number of men reporting that they are unable to work is 88 percent higher for smokers compared with nonsmokers. For male smokers, hospital days are 63 percent higher, restricted-activity days are 55 percent higher, and

TABLE 1 Disability and Medical Care Utilization by Cigarette Smoking Status, Sex and Age: United States, 1979 Both sexes Mala Females A ed Smoking 17 ~ean status and over 17-44 years 45-64 years Aged 65 years 17 years and over and over 17-44 years 45-64 years Aged 65 years 17 years and over and over 17-44 years 45-64 years 65 years and over RESTRICTED-ACTIVITY DAYS PER PERSON PER YEAR All persons' 22.3 Ever smoked2 24.2 Never smoked 20.3 15.1 17.9 12.1 26.3 28.8 22.6 42.8 41.4 43.9 20.0 22.9 14.8 13.7 15.8 10.7 24.4 27.5 14.3 39.4 39.8 39.5 24.4 25.8 23.4 16.5 20.4 13.1 28.2 30.7 25.9 45.2 44.2 45.3 BED-DISABILITY DAYS PER PERSON PER YEAR All pe:sons' 7.5 Ever smoked2 7.8 Never smoked 7.2 5.7 6.5 4.7 8.1 8.8 7.1 13.8 11.7 15.4 6.1 6.7 4.8 4.3 4.8 3.5 7.1 8.1 3.6 12.1 11.1 14.5 8.9 9.3 8.6 6.9 8.4 5.7 9.1 9.8 8.5 15.0 12.7 15.7 WORK-LOSS DAYS PER CURRENTLY EMPLOYED PERSON PER YEAR All persons' 4.9 Ever smoked2 5.4 Never smoked 4.3 5.0 5.8 4.0 4.7 4.6 5.1 - - - 4.5 5.0 3.6 4.5 5.2 3.4 4.3 4.6 3.3 - - - 5.5 6.2 5.0 5.6 6.9 4.5 5.4 4.6 6.3 NUMBER OF PERSONS UNABLE TO WORK OR KEEP HOUSE3 PER 100 PERSONS4 All persons' 5.0 1.1 Ever smoked2 6.2 1.3 Never smoked 3.6 0.8 6.8 9.0 3.2 17.2 22.1 13.3 7.9 9.4 5.0 1.7 2.0 1.2 11.4 12.7 6.8 28.6 30.6 24.7 2.5 2.0 2.9 0.5 0.5 0.5 2.6 3.5 1.8 9.1 7.2 9.8 HOSPITAL DAYS PER PERSON PER YEAR All persons' 1.2 0.8 1.4 2.7 1.1 0.6 1.5 2.5 1.4 0.9 1.3 2.9 Ever smoked2 1.4 0.9 1.6 2.9 1.3 0.8 1.7 2.7 1.4 1.1 1.5 3.2 Never smoked 1.1 0.6 1.1 2.6 0.8 0.5 1.0 2.2 1.3 0:8 1.2 2.7 PHYSICIAN VISITS PER PERSON PER YEAR All persons' 5.0 4.5 5.2 6.8 4.2 3.4 4.7 6.5 5.8 5.6 5.5 6.9 Ever smoked2 5.2 4.7 5.3 7.0 4.4 3.6 4.9 6.5 6.2 6.0 5.9 7.9 Never smoked 4.9 4.4 4.9 6.6 3.7 3.1 4.1 6.6 5.6 5.3 5.3 6.6 Soxrre: Smoking Supplement of the 1979 National Health Interview Survey. Natc: These estimates will be slightly different than other published National Health Interview Survey estimates because these are computed from the one-third sample of persons who were given the smoking supplement. In addition, the variables "unable to work/keep house" and "hospital days" reflect slight definicional modifications from other published estimates. ' Excludes persons of unknown smoking status. = Includes current and former smokers. 3 Includes only females keeping house. 4 Number of persons unable to work or keep house is nor adjusted by labor-force participation, employment, or housekeeping rates. TIMN 305890

510 D. P. Rice et al. bed-disability and work-loss days are about 40 percent higher. The differentials in these disability and medical care utilization measures for female smokers compared with nonsmoking women are lower, ranging from 8 to 24 percent. For women reporting that they are unable to work or keep house, the rates are higher for the nonsmokers, except for those 45 to 64 years of age. Similar patterns are seen by age. The disability and medical care utilization rates for smokers under age 65, especially males, are sig- nificantly higher than for nonsmokers. For those aged 65 and over, the differentials are not as large and for several measures (bed-disability days for men and women, restricted-activity days for women and women unable to keep house), the rates are slightly higher for non- smokers. It is possible that some older persons suffer from a variety of chronic illnesses regardless of their smoking history, resulting in slightly higher disability rates. Also, these rates increase with age for smokers, and nonsmokers aged 65 and over tend to be older than smokers in the same age group. Morbidity and Medical Care Attributable Risks The availability of morbidity and medical care utilization rates by types of condition and smoking status enabled us to estimate for the first time the proportion of the illness measure or type of medical care used that can be attributed to smoking. We focused on the three major diagnostic categories most clearly associated with smoking- neoplasms, diseases of the circulatory system, and diseases of the respiratory system. Thus, 30 percent of the men and 17 percent of the women .17 years of age and over who suffer from these three major conditions and who report they are unable to work or keep house may be attributed to smoking (appendix table 1). Almost 3 out of 10 hospital days of care for them are estimated to be associated with smoking and the proportion is higher for men and for those under age 65. Almost I out of 5 visits by men and 1 out of 15 visits by women to physicians outside of hospitals may be attributed to smoking, while I out of 7 days lost from work is associated with smoking. Direct Costs Direct costs of smoking are the amounts spent for hospital care, physician and other professional services, drugs, and nursing home Tht Economic Goit.c of the Health Lffect.r of Smoking, 1984 51 1 TARI.E 2 Direct Costs: Total Personal Health Care Expenditures for Neoplasms and Diseases of the Circulatory and Respiratory Systems, and Amount Attributed to Smoking by Sex and Age: United States, 1980 Age Both sexes Males Females TOTAL EXPENUITURESI (millions) All ages $62,198 $27,675 $34,523 Under 65 years 32,631 15,830 16,801 65 years and over 29,568 11,845 17,722 AMOUNT A't'TR18lrr'F:1) TO SMOKING (millions) All ages ;14, 384 $8,220 $6,164 Under 65 years 8,734 5,366 3,368 65 years and over 5,650 2,854 2,796 PERCENTAGF, OF TOrAL A7TRIE- UTEC) TO SMOKING All ages 23.1% 29.7% 17.9% Under 65 years 26.8 33.9 20.0 65 years and over 19.1 24.1 15.8 Notr. Numbers and percentages may not add to totals due to rounding. 1 From HodKson and Kopstein (1984). care in behalf of current and former smokers. The data on attributable risks for medical care services enabled us to estimate the direct costs of smoking much more accurately than previous cost estimates. These factors were applied to personal health care expenditures for these three major diseases. Direct costs of smoking total $14.4 billion in 1980, accounting for almost one-fourth of the total expenditures for personal health care for neoplasms and diseases of the circulatory and respiratory systems (table 2). About $8.2 billion, or' 57 percent, are the costs of smoking for men; $8.7 billion, or 61 percent, are for persons under age 65 (figure 1). Table 3 records the direct costs of smoking by type of care. Hospital care accounts for the largest share--69 percent of the total. Professional services and nursing home care each account for 13 percent of the total, and 5 percent are for drugs.

SIZ Neoptesms. dis.ases of the circulatory end r.spbefory systems. $5.4 Under 66 66 years years and over Malet 1).1'. Rice el ul. 82.9 Under 65 66 years years and over Females FIG. 1. Direct costs of smoking by age and sex, 1980 (in billions of dollars). Morbidity Coru Morbidity costs are the value of losses in output for people who are ill and disabled and unable to work. We use average earnings by age and sex and impute a value for housekeeping services for women who are unable to keep house because of illness and disability. The attributable risks shown in appendix table I were applied to person-years lost and' to total morbidity costs for the three major diseases as described in the methodology appendix. A total of 528,000 person-years are estimated to be lost to productivity by current and former smokers, at a total cost of $7.4 billion (table 4 and figure 2). Fifty-six percent of the person-years lost and 72 percent of the morbidity smoking costs are attributed to men. The distribution by age shows that 85 percent of the person-years lost and 96 percent of the morbidity costs of smoking are for persons under age 65, reflecting the higher attributable risks for those under age 65, and their higher earnings. Mortality Co.rt.r As indicated earlier, previous studies of the economic costs of smoking applied global proportions attributed to smoking to illness costs. For '1'he liamorntr (Y the Ilealth 1 ffI7.r of Sntnkinl;, 1<)1{4 ~ N 4. o T O 'D - W ~ Y }I a ~ ~ > D v ~ ~ T ~..1 ` ~ ~o v... U q ~ YT ~ r L\ v1 ~~~r oo ~ r~ M N p N .. N ^ « N ~ N v. p~p N DD M t er N N ^ M~'r O co N N o0 ~ p N O 00 ~D r'- O ~,n0 N © N ., ^ & O O, 00 O, M 8 Q 00 ~6 N ~ O v v O O O. M v g 00 ~ O Ni o0 $ ^o o: ~ O ~D O -O 00 1_ p pp 87 N O N ~ v p O O 00 O ^ v S^~ ^ p p 00 v po N O 0~ v ^ ~' ^ N Op N M N o V 00 M { O N p M ~ O 00 «^ ~~~^'O '0 O 7 O 00 ^ 8$1; 72 z 0 z 513 I

514 D. P. Rice et al. A ~ 0 E w ~.}N N ~O O \0 r~ ~ W~~ O O N N NO~O N N~ N 79 M ~ ~ CU 0 00 g~ U -•\0 rn C~ Ia' op \oroo U J. (T ~ y~ N00.`O'- OMpN N N - u '2 E ~ O, 00 0 N Q T X S M ~ O\0 ~ OoOO~ N N ^' '~p C ~ p M ~O 1~ M ^' N N U W] N N M O, C d ~ 00 \G \O 00 N ~ z ~ E W \O + M N N w i, O N ~ .- O M N U:ji ~ O Mt~ M O M V~ ~D ^^ ~ ~ E ~. 1~ ~ N Q, M\L1 N N N N N V') 0 o a CW c . " < 0~c v c x s N N M N'G' 00 ~N N~ Q .o 10 0 u N r' 7 4 0 b N M y F+ u y N 0 0 0 y 0 00 rn The Economic Co.uu of the Health Ejfect.r of Smoking, 1984 Sex P.r.on- Morbldlty y..r.lo.t co.tU Penon- y..rs toot Age Morbidity cott. FIG. 2. Morbidity costs of smoking for neoplasms and diseases circulatory and respiratory systems, by sex and age, 1980. 515 of the this article we refined the mortality costs by estimating the attributable risks for .19 specific causes of death for males and females based on weighted mortality ratios from 4 prospective studies on smoking as described in the appendix. The attributable risks of cancer mortality from smoking among men ranges from 81 percent for cancer of the trachea, bronchus, and lung to 18 percent for stomach cancer; for women the range is from 56 percent for cancer of the esophagus to 13 percent for kidney cancer (appendix table 4). Not surprisingly, the attributable risks for emphysema and chronic bronchitis are very high-$7 percent for males and 72 percent for females. The attributable risks for aortic aneurysm are also high--66 percent for males and 49 percent for females. As indicated earlier, for mortality the cost or value to society of all deaths attributed to smoking is the product of the number of deaths attributed to smoking and the expected values of an individual's future earnings, with sex and age taken into account. This method of derivation takes into consideration life expectancy for different age and sex groups, changing patterns of earnings at successive ages, varying labor-force participation rates, imputed values of housekeeping

D.l'. 12ice el ul. '!'br liranontir uf Ihe lleul/h I fferl., r f,t'nnoking, 1984 517 services, and the appropriate discount rate to convert a stream of costs or benefits into its present worth (Rice, Hodgson, and Kopstein 1985). We used two discount rates: 4 and 6 percent. We also estimated the person-years lost, based on the number of years remaining at the time of death, from the 1980 life tables published by the National Center for Health Statistics (1984). Table 5 records the number of deaths and person-years lost to productivity for all causes of death attributed to smoking by age and cause of death., Mortality costs at 4 and 6 percent by age, and cause of death are shown in table 6. (Similar data by sex are available from the authors.) The following are highlights of our findings: • A total of 270,269 deaths in 1980 were due to smoking, resulting in 3.9 million person-years lost; • Premature deaths from smoking cost the nation $16.8 billion in 1980; • About 69 percent of the premature deaths and person-years lost arc attributable to smoking among men. Men account for 80 percent of the costs, reflecting the higher risks for men and their higher earnings compared with women; • About 31 percent of the deaths attributed to smoking occur for those aged 45 to 64; this age group accounted for almost half of the person-years lost and 70 percent of the mortality costs (figure 3); • More than half the premature deaths from smoking are caused by diseases of the circulatory system. Almost two-fifths are deaths due to malignant neoplasms. Smoking-related neoplasms, however, represent a higher proportion of person-years lost (42 percent) and of costs (46 percent), because smokers who die from cancer are usually in the younger age groups; • Of the 1.5 million deaths for persons 20 years and over in 1980 due to neoplasms and diseases of the circulatory and respiratory systems combined, 17 percent are attributed to smoking; 19 percent of the 20.9 million person-years lost and 22 percent of total mortality costs are attributed to smoking (table 7). dcher estimates of the number of deaths attributed to smoking are higlici tliari otits (ltavenholt 1985). Our estimates are conservative ® 20,2, years ® I6-61 years ~ 66.74 yars M 76 years or over 3% 7% 18% 31% 48% 70% 39i FIG. 3. Mortality losses attributed to smoking: Distribution of deaths, person-years lost, and costs, by age, 1980, for several reasons: We have not taken into account the adverse effects of passive smoking, risks of abortions, stillbirths and neonatal deaths, or deaths under age 20 that might be associated with smoking. There is a growing body of literature that has concluded that involuntary exposure to tobacco smoke represents a significant public health problem resulting in premarure deaths (Repace and Lowrey 1985; Garland et al. 1985; , National Research Council 1986). The prospective studies upon which the attributable risks were estimated were performed several years ago and did not attempt to measure the adverse effects of smoking on these additional health problems, or certain current occupational and environmental hazards that greatly increase the risk of death for smokers. The studies were based on old smoking habits. For women, whose smoking habits have approached those of men only in the past decades, the earlier epidemiologic data may well be outdated. Women currently suffering from lung cancer, whose smoking histories date back two or three decades, may have smoked more intensively than women who were in the earlier prospective studies upon whom the attributable risk estirriates were based. I

TABLE 5 Mortality Losses: Deaths and Person-years Lost to Productivity for All Causes of Death Attributed to Smoking by Age and Cause of Death: United Stares, 1980 Number of deaths Person-yesrs lost (in thousands) 75 Aged Aged years 20 years 20-44 45-64 65-74 . 75 years 20 years 20-44 45-64 65-74 and Cause of death and over years years years and over and over years years years over To'r,u. 270,269 7,130 84,700 73,426 105,013 3.940 276 t,872 998 795 MALIGNANT NEOPLASMS 103,170 2,804 40,295 35,236 24,835 1,674 108 894 475 196 Trachea, bronchus, lung 74.705 1,787 30,195 26,462 16,261 1,215 66 665 354 129 Larynx 2,603 46 1,115 903 539 42 2 24 12 4 Lip, oral caviry, pharyn: 5,382 236 2,391 1,572 1,183 93 9 54 22 9 Esophagus 4,837 110 2,079 1.510 1,138 80 4 46 21 9 Bladder 3,612 23 613 1,146 1,830 43 1 13 15 14 Kidney 1,731 69 655 551 456 28 3 15 7 4 Pancreas 5,228 105 1,652 1,753 1,718 78 4 37 24 14 Stomach 3,142 98 805 921 1,318 47 4 19 13 11 Cervix 1.930 330 790 418 392 47 15 22 7 4 DISEASES OF THE CIRCULATORY ' SYSTEM 141.546 3,796 39,718 30,687 67,345 1,948 146 875 420 506 Ischemic heart disease 86,036 2,585 31,684 18.324 33,443 1,283 96 692 246 248 Cerebrovucular disease 22,637 444 2,551 4,411 15,231 262 19 61 64 118 Hypertension 5,425 151 1,119 1,326 2,829 73 6 26 19 22 Aortic aneurysm 8,612 1,140 1,522 2,957 3,993 107 6 32 39 31 Atherosclerosis 8,993 16 376 1,077 7,524 78 1 8 15 54 Cardiac arrest 9,843 460 2,466 2,592 4,325 144 19 56 36 33 DISEASES OF THE RESPIRATORY SYSTEM 22.917 412 4,063 6,799 11,643 282 17 88 91 85 Emphysema, chronic bronchitis 14.098 112 2,989 5,230 5,767 184 4 64 71 44 InAuenu, pneumonia 8.819 300 1,071 1,569 5.876 98 13 24 21 40 OTHER CAUSES OF DEATH 2,636 118 624 704 1,190 37 5 14 10 9 Respiratory tuberculosis 536 35 182 150 169 8 1 4 2 1 Ulcer 2,100 83 442 554 1,021 29 3 10 8 8 tiate: Numbers may nor idd to rorals due to rounding. I& TINLN 305895

TABLE 6 Mortality Costs: Discounted Productivity Losses for All Causes of Death Attributed to Smoking by Discount Rate, Age and Cause of Death: United States, 1980 (in millions) Discounted at 4 percent Discounted at 6 percent Aged ears 20 20-44 65-74 75 years Aged 20 years 20-44 65-74 75 years Cause of death y and over yeus 45 -64 years years and over and over years 45 -6d years years and over mrAr.. $16,814 $3,017 $11,811 $1,565 $420 $14,836 $2,439 $10,565 $1,435 $398 MALIGNANT :VEOPLASMS 7,687 1,131 5,684 753 118 6,803 919 5,082 691 110 Trachea, bronchus, and lung 5,631 733 4,261 559 78 4,999 599 3,813 513 73 Larynx 202 20 161 19 2 180 16 144 18 2 Lip, oral cavity, pharynx 502 103 359 35 5 441 83 321 32 5 Esophagus 382 47 297 33 5 339 38 265 31 5 Bladder 113 9 74 23 7 102 7 67 21 7 Kidney 140 30 96 12 2 123 24 85 11 2 Pancreas 316 44 226 38 8 281 35 202 35 8 Stomach 172 39 106 21 6 150 31 94 20 6 Cervix 227 108 105 12 3 189 85 90 11 2 DISEASES OF THE CIRCULATORY SYSTEM 8,086 1,648 5,527 656 255 7,118 1,330 4,946 601 241 Ischernic heart disease 6,117 1,133 4,475 382 127 5,400 922 4,007 351 120 Cerebrovascular disease 667 177 328 102 60 580 140 290 93 56 Hypertension 258 63 153 31 12 225 50 136 28 li Aortic aneurysm 325 65 183 60 17 288 52 165 55 16 Atherosclerosis 96 6. 44 23 23 87 5 40 21 21 Cardiac arrest 623 203 345 58 17 536 160 308 53 16 DISEASES OF THE RESPIRATORY SYSTEM 878 185 508 142 43 775 149 455 130 41 Emphysema, chronic bronchitis 534 47 352 110 26 479 38 316 101 24 Influenza, pneumonia 344 138 156 32 18 296 111 139 29 17 OTFIER CAUSES OF DEATH 163 52 91 15 5 141 42 81 14 4 Respiratory tuberculosis 50 16 30 3 1 44 13 27 3 1 Ulcer 113 36 61 12 4 98 29 54 11 4 vote: Numbers may not add to totals 3ue to rounding TIMN 305896

TABLE 7 Mortality Losses: Deaths, Person-years Lost to Productivity, and Mortality Costs for Neoplasms" and Diseases of the Circulatory and Respiratory Systems, and Amount Attributed to Smoking by Sex and Age: United States, 1980 Mortality costs (in millions) Deaths' Person-years (in thousands) Discounted at 4 percent Discounted at 6 percent Age Both sexes Males Females Both srxes Males Females Both sexes Males Females Both sexes Males Females TOTAL Aged 20 years and over 1,535,184 806,485 728,699 20,918 10,700 10,218 $75,069 $48,738 $26,331 $65,470 $42,724 $22,746 20-64 years 376,464 235,062 141,402 9,449 5,387 4,062 63,017 43,064 19,953 54,367 37,466 16,901 65 years and over 1,158,720 571,423 587,297 11,469 5,313 6,156 12,052 5,674 6,378 11,103 5,258 5,845 AMOUNT ATTRIBUTED TO SMOKING Aged 20 years and over 267,633 185,832 81,801 3,904 2,697 1,206 16,651 13,369 3,282 14,696 11,844 2,851 20-64 years 91,088 71,364 19,724 2,130 1,581 550 14,683 12,097 2,587 12,881 10,666 2,215 65 years and over 176,545 114,468 62,077 1,773 1,117 656 1,967 1,272 694 1,814 1,179 635 PERCENTAGE OF TOTAL ATTRIBUTED TO SMOKING Aged 20 years and over 17.4% 23.0% 11.2% 18.7% 25.2% 11.8% 22.2% 27.4% 12.5% 22.4% 27.7% 12.5% 20-64 years 24.2 30.4 13.9 22.5 29.3 13.5 23.3 28.1 13.0 23.7 28.5 13.1 65 years - and over 15.2 •20.0 10.6 15.5 21.0 10.7 16.3 22.4 10.9 - 16.3 22.4 10.9 Sose: Numbers and percentages may not add to totals due co rounding. • Excludes deaths for which age is not available. TIMN 305897

524 1).P. Knr er a!. Total Economic Costs of the FI ealth Effects of Smoking The total economic costs of smoking amount to $38.6 billion in 1980. Direct costs account for 37 percent, morbidity costs for 19 percent and mortality costs 44 percent (table 8). Not surprisingly, the economic costs of smoking for men are considerably higher than for women-$27 billion and $11.6 billion, respectively. For men mortality costs are highest-50 percent of the total; for women, direct costs are highest---53 percent of the total economic costs. Smoking clearly has severe consequences for the nation, amounting to 8.5 percent of the total economic costs of all illnesses in 1980. Direct costs of smoking account for 6.8 percent of the total direct costs, and indirect costs represent almost 10 percent of the total indirect costs for all illnesses. It is evident that people who smoke die earlier, and their productivity losses are very high. We updated our figures to 1984 and the costs are even more staggering-S53-7 billion in 1984 (figure 4). To obtain 1984 values, direct costs were adjusted by the percentage change in total personal health care expenditures as reported by the Health Care Financing Administration. Indirect costs were adjusted by the percentage change in average weekly earnings as reported by the Bureau of Labor Statistics. Direct costs represent a larger share of the total-43 percent compared with 37 percent in 1980 because medical care costs have been rising faster than earnings that are the basis for estimating indirect costs. Again, mortality costs are relatively higher for males and direct costs are highest for females. Comparison with Other Cost-of-smoking Studies The studies by Luce and Schweitzer (1978) and the Office of Technology Assessment (1985).(OTA) also estimate medical care expenditures and the value of lost productivity from morbidity and premature mortality from smoking-induced disease. Their methodology is similar to that of the study reported in this article. Each of the three studies estimated costs of smoking by applying attributable risks to direct and indirect costs of neoplasms and circulatory and respiratory diseases. The costs of neoplasms and circulatory and respiratory diseases from which the costs of smoking are derived are consistent. Luce and Schweitzer inflated Cooper and Rice's (1976) estimates of costs in 1972 to 1976; '/'he licononiic Coiti o/ the Flea/th F,ffects of ,Smoking, 1984 525 0 Direct costs $53.7 Billion All persons Q Morbidity costs ® Mortality costs $36.5 Billion Males $17.2 Billion Fetnales FIG. 4. Economic costs of smoking, by type of cost and sex, 1984. OTA inflated HodKson and Kopstein (1984) and Rice, Hodgson, and Kopstein's (1985) estimates of 1980 costs to 1985; and this article utilized Hodgson and Kopstein (1984) and Rice, Hodgson, and Kopstein (1985) cost estimates. The principal sources of variation among the studies are the estimates of attributable risks. Luce and Schweitzer used attributable risks for three major diagnostic groups of diceases---•neoplasms and circulatory and respiratory diseastsr-- from Boden's (1976) study of the economic impact of environmental disease on health care delivery. For each major diagnostic group, the attributable risk was applied to total direct and indirect costs for that disease to estimate the amount due to smoking. Boden does not indicate how these attributable risks were derived. OTA improved upon this method by attributing costs of smoking according to the estimated proportion of smoking-related deaths for each disease by age and sex. By this method OTA accounted for the influence of declining attributable risks, declining per capita indirect costs, and increasing per capita health expenditures with increasing age. For our estimates, we introduce an additional refinement by estimating health care costs and indirect morbidity losses related to smoking from differences in medical care use and time lost from productive activity between smokers and nonsmokers observed in the National Health Interview Survey, rather than by differences in mortality which is characteristic of earlier studies. I