Cigarette smoking cost Medicare program $20.5 billion in 1997, according to UCSF researchers

September 30, 1999

A study by UC San Francisco researchers reports the total costs of cigarette smoking to the Medicare program amounted to $20.5 billion in 1997.

"This is the first study that documents the smoking-attributable costs to Medicare that are now part of the Federal lawsuit against the tobacco industry," said Xiulan Zhang, PhD, lead author and research analyst in the UCSF Institute for Health & Aging.

Zhang and co-researchers reported the finding in the Summer 1999 issue of Health Care Financing Review, released September 29.

"Our estimates for 1997 smoking-related costs to the Medicare program are only one out of 30 years of payments by the Medicare program for aged and disabled persons who have suffered from smoking-related diseases, suggesting that the aggregate Medicare payments over the 30 years could have exceeded $600 billion in current dollars," said Dorothy Rice, ScD, co-author and professor emeritus of medical economics in the UCSF Institute for Health & Aging.

UCSF and UC Berkeley researchers have been studying the economic effects of smoking on health care for the past five years. Researchers previously examined the impact of smoking on Medicaid costs as well as total health care costs.

In the current study, UCSF and UC Berkeley researchers estimated 1993 national and state smoking costs to the Medicare program. The 1993 cost estimates were updated to1997 based on the increase in Medicare expenditures. Medicare covers part of the medical expenses of 34 million Americans age 65 and over and 5.5 million persons with disabilities.

Researchers used economic models that examine the relationship between smoking history, smoking related disease, self-reported health status, and medical costs, according to Zhang.

The researchers found the total cost of smoking to the nation in 1993 amounted to $72.7 billion. Of this total, the cost of smoking to Medicare amounted to $14.2 billion (9.4 percent of total Medicare costs). California had the highest expenditures at $1.5 billion that year, followed by New York with $1.4 billion. Alaska had the lowest smoking-attributable expenditures at $8 million.

Of the total costs of smoking to Medicare, $10.8 billion was for hospital care, $2.4 billion for ambulatory care, $488 million for nursing home care, and $473 million for home health care.

The total smoking costs to the nation amounted to $89.2 billion dollars in 1997, according to researchers, including $20.5 billion to the Medicare program, $17.0 billion to the Medicaid program, and $51.7 billion to other public and private programs.

Researchers used data from two main surveys to determine state estimates of smoking-attributable expenditures as well as smoking-attributable fractions (the ratio of the cost of smoking of each state to total Medicare expenditures). The NMES (National Medical Expenditures Survey, 1987) is a face to face survey of 35,000 people that linked population characteristics with use of medical payments for medical resources. The BRFSS (Behavioral Risk Factor Surveillance System, 1993) is an annual telephone survey of health risks and medical care, conducted by state health department in collaboration with the Centers for Disease Control.

Co-authors of the study are Leonard Miller, PhD, professor of social welfare at the University of California, Berkeley and Wendy Max, PhD, UCSF associate professor of medical economics in the UCSF Institute for Health & Aging.

University of California - San Francisco

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