Economic Effects of Environmental Tobacco Smoke

1. Economic Effects of Environmental Tobacco Smoke by Donald F. Behan, Michael P. Eriksen and Yijia Lin Georgia State University Donald F. Behan Tobacco Control Network Presentation

2. Sponsorship • Research sponsored by the Society of Actuaries, the largest actuarial professional organization sponsoring technical research in the USA. • Full text available at http://www.soa.org/ccm/content/areas-of-practice/life-insurance/research/economic-effects-of-environmental-tobacco-smoke-SOA Donald F. Behan Tobacco Control Network Presentation

3. Executive Summary • Exposure to environmental tobacco smoke (ETS) is responsible for annual costs of $10 Billion in the USA. • $5 Billion direct medical cost • $5 Billion indirect costs • Number of people exposed and level of exposure are decreasing. Donald F. Behan Tobacco Control Network Presentation

4. Outline • Description of our research • Data on risk • Data on cost • Principal effects identified • Procedures for quantifying cost per exposure • Medical • Indirect • Procedures for estimating exposure • Limitations • Public policy issues Donald F. Behan Tobacco Control Network Presentation

5. Based on Literature Review • Approximately 200 original research articles on health effects of ETS exposure • Various sources on costs of medical treatment, varying with condition treated • Published data on age and survival for fatal illnesses • Published data on life income and value of services Donald F. Behan Tobacco Control Network Presentation

6. Examples of Morbid Conditions Donald F. Behan Tobacco Control Network Presentation

7. Criterion for Inclusion • Clear positive association with ETS exposure • Example: Breast cancer has a positive association in some studies, but consensus not statistically significant • Depends on volume of research Donald F. Behan Tobacco Control Network Presentation

8. Effect of Statistical Uncertainty • Low relative risks require a high volume of data to demonstrate statistical significance. • High number of people exposed implies some conditions without statistically significant association may have a large number of victims, especially if base rate is high. Donald F. Behan Tobacco Control Network Presentation

9. Determination of Lost Productivity • Death and disability from morbid conditions • Economic cost depends on age at death and work-life expectancy Donald F. Behan Tobacco Control Network Presentation

10. Cost of Medical Services • For some conditions (cancer, COPD, CHD) we estimated the total cost of the condition. • For conditions such as otitis media and asthma we estimated the cost per episode. Donald F. Behan Tobacco Control Network Presentation

11. Loss of Productivity • For adults we used standard estimates of income and benefits, as well as the value of personal services. • We did not attempt to associate an economic cost with the lives of infants who were not brought to term as a result of spontaneous abortion. Donald F. Behan Tobacco Control Network Presentation

12. Basis for Estimated Exposure • We based the rate of exposure on NHANES 1988-91 with an adjustment for the change in number of active smokers. • Exposure is a moving target, and various components are measured at different times. Donald F. Behan Tobacco Control Network Presentation

13. Basis for Estimated Cost • Number of cases = Exposed population × Base rate × (Relative risk – 1) • Cost = Number of cases × Cost per case Donald F. Behan Tobacco Control Network Presentation

14. Number of Excess Cases/Episodes Donald F. Behan Tobacco Control Network Presentation

15. Direct Medical Costs ($Million) Donald F. Behan Tobacco Control Network Presentation

16. Indirect Costs ($Million) Donald F. Behan Tobacco Control Network Presentation

17. Limitations • Rate of exposure is changing, and latency of some conditions is unknown. Our estimates were based on current rates of exposure. • ETS-caused cases were assumed to be similar to other cases. It is not possible to test this assumption with current data. Donald F. Behan Tobacco Control Network Presentation

18. Limitations (Continued) • Studies of the effects of exposure to ETS are based on comparing rates among people who never smoked, but are or are not exposed to ETS. • Population exposure includes many former smokers, who may be affected at a different rate. Donald F. Behan Tobacco Control Network Presentation

19. Public Policy Issues • Exposure is down to a greater degree than can be explained by reduced smoking – controls on smoking seem to be reducing ETS exposure. • People in certain occupations and people with low socio-economic status are exposed at a high rate. Donald F. Behan Tobacco Control Network Presentation

20. Public Policy Issues (Continued) • Children of smokers are exposed at a higher rate than exposure of adults. • Children of smokers receive little benefit from restrictions on smoking in the workplace and in public places, as they are exposed principally in the home. Donald F. Behan Tobacco Control Network Presentation