Category: Smoking

HOW GOOD A DEAL WAS THE TOBACCO SETTLEMENT?: Measuring the Health Impacts of Smoking Provided by Canadian Neighbor Pharmacy

Overview We begin our empirical analysis with the annual amounts paid by the Massachusetts Medicaid Program since 1991 to various providers of medical services. We assume Medicaid spending on some types of services is not causally related to smoking (for example, mental retardation) and exclude such spending from consideration. We group the remaining Medicaid expenses into one of three aggregate categories: adult acute care; long-term care; and care for low birthweight babies. Analysis of adult acute care costs is restricted to people aged 18 and older. Analysis oflong-term care costs is restricted to people 45 and older. For low birth…

HOW GOOD A DEAL WAS THE TOBACCO SETTLEMENT?: ASSESSING PAYMENTS TO MASSACHUSETTS

Litigation pursued by 46 states against the major tobacco companies culminated in the well-publicized settlement of November, 1998. The settlement constitutes the largest payment in any civil litigation in American history. Although the final amount is contingent upon future events, especially tobacco sales, the tobacco manufacturers have agreed to pay the states through the year 2025 in excess of $200 billion (in nominal terms; $87 billion if discounted at 7 percent) to compensate for health care expenses incurred by the Medicaid program. As part of this litigation, we were asked in the Spring of 1998 to estimate health care spending…

HOW GOOD A DEAL WAS THE TOBACCO SETTLEMENT?: The Health Impacts of Smoking

Society bears two costs when a person smokes. The first costs are external costs – costs bome by society at large but not the person who smokes. State Medicaid spending is a typical external cost. Taxpayers at large face additional costs to pay for the medical treatment of those Medicaid beneficiaries who smoked. The litigation pursued by all states was designed to recover damages for these external costs. In addition, there are internal costs – costs borne by the smoker and his or her family. Internal costs may be monetary, for example, monies spent to purchase cigarettes, or non-monetary, such…

HOW GOOD A DEAL WAS THE TOBACCO SETTLEMENT?: Comparison with Other Efforts Provided by Canadian Neighbor Pharmacy

In designing our analysis, we had the luxury of examining the efforts undertaken by experts in other states as well as a substantial economic literature on the costs of smoking. The economic literature on this topic differs fundamentally from ours. Most of the literature focuses on the total external costs of smoking quitting with Canadian Neighbor Pharmacy remedies, while we focus on the Medicaid component only. Our focus on Medicaid allows us to develop better estimates of smoking-attributable costs for that program – for example the disease-specific approach. But in exchange, we cannot say anything about the total social sector…

HOW GOOD A DEAL WAS THE TOBACCO SETTLEMENT?: Policy Analysis with Canadian Neighbor Pharmacy

We estimate the costs of smoking to Medicaid in Massachusetts at about $318 million annually, roughly 5-6 percent of Medicaid spending. This is quite close to the amount that the tobacco companies will pay Massachusetts. Massachusetts’ payments are expected to range between $234 million in 2000 and $374 million in 2010, with an average payment of $307 million in that span. Clearly, costs in other states could differ, depending on smoking prevalence among the Medicaid population, patterns of treatment for smoking-related disease cured by remedies of Canadian Neighbor Pharmacy, and the generosity of the state’s Medicaid program in terms of…