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Message from the Commissioner

Executive Summary

Table of Contents

Section I. Prevalence

Section II. WV Cigarette Consumption

Section III. Deaths in WV due to Smoking

Section IV. Health Care Costs Related to Smoking

SAMMEC

References

Credits

TOBACCO IS KILLING (AND COSTING) US

A Report on Tobacco Use Rates, Smoking-Related Deaths,
and Smoking-Related Health Care Costs in West Virginia


SECTION IV
Health Care Costs Related to Smoking in West Virginia

The Health Statistics Center relied upon the work of two noted researchers in estimating smoking-attributable direct health care costs. Vincent Miller and Leonard Miller (not related) independently developed two models for estimating health care costs related to cigarette smoking (1,2). At the core of both models is the concept of the smoking-attributable fraction (SAF), which is the proportion of the average medical care expenditure for a specific category (e.g., hospital care, ambulatory care, or prescription drugs) that is due to cigarette smoking. Simply stated, an SAF expresses the ratio of the cost difference between smokers and nonsmokers for each medical expense category. Health Statistics Center staff elected to show the results of both models after consultation with Dr. Jeffery Fellows of the Centers for Disease Control and Prevention. The SAFs from both models were applied to estimated health care expenditures for West Virginia obtained from the federal Health Care Financing Administration. In the present report, Model 1 refers to the use of SAFs calculated by Vincent Miller et al. and Model 2 the use of SAFs calculated by Leonard Miller et al. West Virginia’s total smoking-related direct health care costs for 2004 are estimated at $846 million using Model 1 and over $1.064 billion using Model 2.

Mortality-Related Productivity Costs
The SAMMEC software used to update the smoking–related mortality data presented in this report also calculated mortality-related productivity losses that are attributable to smoking, that is, losses resulting from premature death due to smoking-related disease. These data are calculated using updated age-specific estimates of the present value of future earnings (PVFE) from paid market and unpaid household work, as obtained from Haddix et al. (7).

Using SAMMEC, it was estimated that smoking-attributable productivity losses in West Virginia amounted to $834 million in the year 1999. Adjusting to the year 2001 using Employment Cost Index (ECI) estimates for total compensation (after consultation with the Office on Smoking and Health [OSH] at CDC), it was estimated that the corresponding productivity losses for the year 2001 amounted to $906 million. This same method was used to estimate the 2004 productivity losses. The ECI yielded an 11.76 percent increase in losses between the 3rd quarter of 2001 and the 3rd quarter of 2004. It is therefore estimated that the productivity losses for the year 2004 amounted to $1.012 billion.

A combination of the smoking-related direct health care costs and the smoking-related productivity losses gives a clear picture of the enormous economic toll of tobacco in West Virginia. For the year 2004, this amounted to $1.858 billion using Model 1 and $2.076 billion using Model 2. Figure 7 compares these calculated combined costs per adult residents versus adult smokers in the state. These total costs, however, do not include the costs of productivity losses due to morbidity from smoking-related illness, nor do they include the costs of health care or productivity losses due to smokeless tobacco, cigars, pipes, and secondhand smoke.

Table 4 presents a county breakdown of the health impact of smoking in the state, i.e., estimated average annual smoking-related mortality from 1999-2003, as well as health care costs as calculated using both economic models. Figure 8 illustrates per capita smoking-attributable health care costs by county for 2004 generated using Model 2 SAFs and average annual deaths from 1999-2003. These costs range from a high of $893 in McDowell County to a low of $320 in Monongalia County. Figure 9 shows estimated smoking-attributable health care costs for 1998, with projected costs for 1999 through 2004. Medical inflation was used to project 1999 - 2004 costs for Model 1, while Consumer Price Index inflation was used for Model 2. Application of a relative error of 34 percent to Model 2 produces a range of expenditures from $703 million to $1.4 billion for 2004. Smoking-attributable medical costs calculated using both models fall within this range for all years.

Figure 7-Estimated Smoking-Attributable Productivity Losses plus Direct Health Care Costs Per Adult Smoker vs per Adult Resident in West Virginia, 2004


Table 4
Health Impact of Smoking in West Virginia
County Estimated Deaths Due to Smoking
1999-2003
Age 35+
2001 Estimated Population Health Care Cost
Model 1*
Health Care Cost
Model 2**
Rank
(Based on
Model 2)
Economic Costs (Distributed by Deaths) Cost Per Capita Economic Costs (Distributed by Deaths) Cost Per Capita
Barbour 32 15,445 $6,958,975 $451 $8,752,187 $567 36
Berkeley 136 78,719 $29,861,933 $379 $37,556,851 $477 48
Boone 69 25,501 $15,151,187 $594 $19,055,394 $747 4
Braxton 32 14,763 $7,003,020 $474 $8,807,580 $597 26
Brooke 59 25,194 $12,904,935 $512 $16,230,321 $644 17
Cabell 224 95,829 $49,373,490 $515 $62,096,210 $648 16
Calhoun 19 7,419 $4,184,194 $564 $5,262,391 $709 6
Clay 26 10,296 $5,725,739 $556 $7,201,166 $699 7
Doddridge 16 7,458 $3,523,532 $472 $4,431,487 $594 27
Fayette 114 47,226 $25,105,165 $532 $31,574,344 $669 11
Gilmer 15 7,119 $3,347,355 $470 $4,209,913 $591 28
Grant 19 11,349 $4,272,282 $376 $5,373,178 $473 49
Greenbrier 74 34,444 $16,340,379 $474 $20,551,020 $597 25
Hampshire 34 20,674 $7,575,594 $366 $9,527,697 $461 50
Hancock 62 32,303 $13,697,730 $424 $17,727,405 $533 42
Hardy 25 12,809 $5,417,430 $423 $6,813,411 $532 43
Harrison 184 68,061 $40,476,572 $595 $50,906,706 $748 3
Jackson 63 28,057 $13,785,818 $491 $17,338,192 $618 22
Jefferson 67 43,448 $14,842,878 $342 $18,667,638 $430 52
Kanawha 467 197,766 $102,887,130 $520 $129,399,417 $654 14
Lewis 42 16,926 $9,161,183 $541 $11,521,866 $681 10
Lincoln 57 22,181 $12,596,626 $568 $15,842,566 $714 5
Logan 93 36,897 $20,436,485 $554 $25,702,624 $697 9
McDowell 86 26,561 $18,850,895 $710 $23,708,455 $893 1
Marion 142 56,267 $31,271,345 $556 $39,329,446 $699 8
Marshall 71 35,303 $15,591,628 $442 $19,609,329 $555 37
Mason 54 26,080 $11,891,920 $456 $14,956,268 $573 34
Mercer 149 62,022 $32,812,890 $529 $41,268,222 $665 13
Mineral 48 27,038 $10,614,640 $393 $13,349,854 $494 46
Mingo 75 27,578 $16,428,467 $596 $20,661,808 $749 2
Monongalia 95 82,320 $20,965,015 $255 $26,367,347 $320 55
Monroe 25 13,258 $5,549,563 $419 $6,979,592 $526 44
Morgan 30 15,232 $6,606,622 $434 $8,309,038 $545 41
Nicholas 55 26,322 $12,112,141 $460 $15,233,236 $579 32
Ohio 110 46,665 $24,136,193 $517 $30,355,685 $651 15
Pendleton 12 8,073 $2,730,737 $338 $3,434,402 $425 53
Pleasants 18 7,540 $4,008,017 $532 $5,040,816 $669 12
Pocahontas 19 8,942 $4,096,106 $458 $5,151,603 $576 33
Preston 51 29,309 $11,143,170 $380 $14,014,577 $478 47
Putnam 78 51,730 $17,265,306 $334 $21,714,286 $420 54
Raleigh 162 78,546 $35,719,804 $455 $44,924,198 $572 35
Randolph 44 28,273 $9,689,713 $343 $12,186,589 $431 51
Ritchie 24 10,351 $5,197,209 $502 $6,536,443 $631 19
Roane 33 15,461 $7,267,284 $470 $9,139,942 $591 29
Summers 32 14,224 $7,047,064 $495 $8,862,974 $623 21
Taylor 32 16,109 $7,047,064 $437 $8,862,974 $550 40
Tucker 16 7,219 $3,435,444 $476 $4,320,700 $599 24
Tyler 21 9,529 $4,580,591 $481 $5,760,933 $605 23
Upshur 44 23,358 $9,601,624 $411 $12,075,802 $517 45
Wayne 90 42,778 $19,819,867 $463 $24,927,114 $583 31
Webster 20 9,681 $4,492,503 $464 $5,650,146 $584 30
Wetzel 40 17,314 $8,808,830 $509 $11,078,717 $640 18
Wirt 13 5,889 $2,950,958 $501 $3,711,370 $630 20
Wood 175 87,742 $38,582,674 $440 $48,524,781 $553 38
Wyoming 50 25,226 $11,055,081 $438 $13,903,790 $551 39
Total WV 3,842 1,801,824 $846,000,000 $470 $1,064,000,000 $591  
Note:
* Model 1 uses smoking-attributable fractions (SAF's) calculated by Vincent Miller
**Model 2 uses SAF's calculated by Leonard Miller

Figure 8-Average Annual Smoking-Attributable Health Care Costs Per Capita, by County West Virginia, 2004


Figure 9-Smoking-Attributable Direct Health Care Costs, 1998-2004-Model 1 and 2 Applied to West Virginia Health Care Finance Administration 1998 Estimates*



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Footnotes:
 3Bureau of Labor Statistics. United States Department of Labor. Employment Cost trends data. Available at http://data.bls.gov/cgi-bin/surveymost?ec
 4


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Last updated September 12, 2006.

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