Steve Anderson and Jim Lightwood just published Health Care Cost Savings Attributable to the California Tobacco Control Program, 1989 to 2018 through the University of California eScholarship initiative. Using sophisticated econometric analysis they convincing show that in its first 30 years, the program reduced actual medical costs by a total of $500 billion (in 2019 dollars).
In 2019, California medical costs were about $37 billion below what one would have expected had the voters not passed Prop 99 in 1988. At a time that California, like all states, is struggling with the financial challenges created by the coronavirus epidemic, the California Tobacco Program (CTCP) is not only saving lives but also making a substantial contribution to helping California meet its current financial challenges.
This amount only includes medical care costs (doctors, hospitals, drugs, and related costs), not indirect costs such as lost productivity or the value of lives lost. The savings in those areas are generally even more than the direct medical costs.
Moreover, using an alternative measure of medical costs, the Center for Medicare and Medicaid Services, the estimated savings are even higher: $737 billion.
These savings accumulate rapidly and grow over time. In addition, Arnold and Lightwood showed that the medical savings that follow from each dollar spent on the California Tobacco Control Program (adjusted for population growth and inflation) has remained remarkably stable over time. The policy bottom line: The more money invested in the Tobacco Control Program, the more the savings in medical costs.
They also estimated that the Program has prevented 15.7 billion packs of cigarettes from being smoked worth $51.4 billion in pre-tax sales to the cigarette companies through 2018. No wonder the companies hate the program so much.
Their bottom line: “The estimated effect on smoking behavior of an additional dollar spent (adjusted for inflation) on education is the same now has been constant since 2008. The lower estimated total effect of the CTCP program on smoking behavior per year has declined since 2008, but that is due to reductions in real expenditure devoted to the program. If funding were increased, the total effect of the CTCP program should return to its previous levels.”
The full citation is Lightwood, J., & Anderson, S. (2020). Health Care Cost Savings Attributable to the California Tobacco Control Program, 1989 to 2018. UCSF: Center for Tobacco Control Research and Education. Retrieved from https://escholarship.org/uc/item/53b9b8fz .