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School-based Smoking Prevention: Economic Costs Versus Benefits Abstract The objective of this study was to conduct a cost-benefit analysis to
compare the costs of developing and delivering an effective school-based
smoking prevention program with the savings to be expected from reducing
the prevalence of smoking in the Canadian population over time. A smoking
prevention program that meets published criteria for effectiveness, implemented
nationally in Canada, would cost $67 per student (1996 dollars). Assuming
such a program would reduce smoking by 6% initially and 4% indefinitely,
lifetime savings on health care would be $3,400 per person and on productivity,
almost $14,000. The benefit-cost ratio would be 15.4 and the net savings
$619 million annually. Sensitivity analyses reveal that considerable economic
benefits could accrue from an effective smoking prevention program under
a wide range of conditions. Introduction Background The prevalence of smoking has declined impressively since the 1960s, but there are still more than six million Canadians who smoke.1 Moreover, teen smoking in Canada increased after 19902 and has not declined since in concert with general population trends.1 Among current smokers aged 15-17, 35% had had their first cigarette by the age of 12, and almost 80% had tried smoking by the age of 14.3 Unfortunately, effective smoking prevention has been the exception rather than the rule in Canadian schools.4 Recent cutbacks in education budgets have jeopardized many school programs, including smoking prevention, while at the same time reduced health budgets have made it more imperative than ever to identify causes, especially preventable causes, of excess health care costs. It is clear that smoking is one of these causes, and it would therefore be useful to know how much money, if any, could be saved by effective smoking prevention programs in schools. Study Objective The objective of this study was to conduct a cost- benefit analysis of school-based smoking prevention programs in order to examine the potential payoff of effective programs. Although the ultimate rationale for preventing smoking is not economic, but human, an economic analysis may lend weight to arguments in favour of prevention and thus lead to improved health and enhanced quality of life.
General Approach The general strategy adopted was to calculate a benefit-cost ratio for smoking prevention programs. This form of cost-benefit analysis takes a societal perspective and quantifies the potential effects on all parties involved.5 Since the ratio expresses both costs and benefits in the same (dollar) terms, the following items need to be documented.
The approach here is similar to the one used in a recent study from the US Centers for Disease Control and Prevention (CDC)/Battelle Institute.6 For cases in which variables such as costs and effects might be open to debate, we state our assumptions and use conservative values for the "base case" in order to produce a ratio that is defensible. Sensitivity analyses show the range of benefit-cost ratios that result from assumptions different from those in the base case. All dollar figures are expressed in 1996 terms, but, since the result of interest is a ratio of benefits to costs, the year is ultimately of little relevance. Cost of Smoking Prevention The components of program cost, expressed on a per-person basis, are these.
To obtain the cost of program development, we looked for prevention programs designed for teacher use (as distinct from volunteer- or peer-led programs) that would meet the criteria for effectiveness described by Glynn.7 We selected the combination of two Canadian programs, Peer Assisted Learning (PAL)8 and Improving the Odds.9 Federal health department files were consulted to document the costs of staff salaries and consultants' fees for initial program development and later evaluation.10 The total in round numbers was $1 million. To calculate this on a per-student basis, we assumed a three-year lifespan and nationwide implementation. An estimated cohort of 1,167,000 children across Canada (based on census estimates of three cohorts of 12-year-olds) would thus be exposed to the program before it became obsolete, for a per-student development cost of $0.86.
A national survey of smoking prevention programs4 revealed that only a minority of Canadian schoolchildren are exposed to programs meeting the criteria for effectiveness.7 Among other shortcomings, existing programs tend to have too few sessions. Glynn describes a total of 10 sessions over four years (grades 6-9) as a minimum.7 To cost such a program, we assumed that the 10 sessions were equally spread over the four years; elementary school sessions (grades 6-8) were 30 minutes long, and secondary school sessions (grade 9) were 45 minutes. For a program that clearly exceeds this minimum, we used a Nova Scotia curriculum with a total of 18 sessions in grades 4 through 7.11 With regard to classroom activities, the teacher time per smoking prevention course was thus 5.6 hours for the minimum 10 sessions and 9.0 hours for the exemplary program. Some time for initial teacher training must also be considered. We assumed that the teachers would be trained with videos or print materials, so the main cost would be their time. Glynn7 suggested half a day as a minimum and one full day as preferable. We thus added 3.5 hours and 7.0 hours to the above times for classroom contact, for the following totals.
In 1995/96, the total cost of elementary and secondary education was $7.29 per pupil per hour of instruction.12 This is a comprehensive figure that includes operating costs outside the classroom, debt service and capital expenditures for schools. Using the values of 9.1 hours and 16.0 hours, per-pupil costs for program delivery are thus $66.34 for the minimum 10 sessions and $116.64 for the preferred 18 sessions. Total program costs, including development and evaluation, teacher training and classroom delivery, thus work out as follows.
For the base case in our cost-benefit analysis, we used a per-student cost of $67.00. Annual costs are required to provide an estimate of net savings. For this purpose, we amortized the program development costs over three years and added to this the annual program delivery costs. The latter are based on the per-pupil hourly cost of $7.29 for 1,167,000 pupils, each of whom is exposed annually to 2.275 hours of instruction, including teacher training time (a total of 9.1 hours over four years), for the base case. Total annual costs for a national smoking prevention program in Canada would thus be $19.7 million. Program Effect The calculation of a benefit-cost ratio requires a value for the difference in prevalence of smoking in groups receiving prevention programs and those receiving none. The use of such an effect size makes it unnecessary to specify the actual prevalence of smoking prior to the introduction of the prevention program, and thus allows for the application of the results to any population. The CDC/Battelle study6 adopted as its base case an initial effect size of 6%, based on an extensive review of the literature, decaying by 20% over four years, to an enduring 4.8%. We have assumed for our base case a decay of 33% to an enduring 4% after four years. Potential Savings The economic benefits of a population with fewer smokers are in the form of direct and indirect savings. Direct savings arise from the reduced need to provide health care to smokers; the indirect savings come from the greater productivity of non-smokers by virtue of their reduced number of sick days and longer working life. In the present study, values for these savings were obtained by a cost-of-illness approach.
Previously calculated smoking-attributable costs for physician care, hospital use and medications, by sex, for 199113 were adjusted for inflation to 1996 dollars. Annual costs per smoker were obtained by dividing the total cost by the number of "ever smokers" (current and former smokers). Lifetime per-smoker costs were estimated using present-value calculations of the annual costs at four discount (inflation) rates over life expectancies of 78 years for men and 82 years for women.14
In a similar fashion, smoking-attributable absenteeism costs, by sex, were calculated using present-value analysis. Costs were calculated for a working career with retirement at age 65 for both sexes. Annual per-smoker absenteeism costs attributable to smoking were determined by dividing the total annual cost of such work loss by the number of ever smokers in the work force. Data by sex were available for both 199113 and 1994.15 Since all of the other data were for 1991, absentee data for that year were used in this analysis.
Income lost due to premature death attributable to smoking was also calculated using present-value analysis. We assumed that no smoking-attributable deaths occur before age 45 and that individuals normally retire at age 65. As a result, the indirect smoking-attributable cost of premature death reflected total lost income from age 45 to 65. Indirect costs per year were calculated from the average industrial wage adjusted to 1996 dollars.
Several of the parameters that go into calculating the benefit-cost ratio require assumptions, as already described, and sensitivity analysis was conducted to test how the benefit-cost ratio changed as these assumptions changed. The following parameters were tested through sensitivity analyses: inflation rates of 3%, 5% and 8% in addition to the base case of 4%; program effect sizes of 4% declining to 2% and 6% declining to 1% in addition to the base case of 6% declining to 4%; and higher program development costs of $117 per student for the preferred 18 sessions as well as the base case of $67 per student for 10 sessions. Lost income is usually treated as a cost that must be borne indefinitely by the family of the prematurely dead worker. Some argue that this is not a realistic cost and that the true cost to society is limited to the approximately three months that it takes to replace a deceased worker. We have tested the result of using this reduced "friction cost" method in the sensitivity analyses.
Table 1 summarizes the annual costs in 1996 dollars of smoking-attributable disease and early death for all smokers (first double column). The resulting health care bill (direct costs) totalled $2.4 billion, most of which was due to the excess hospital care required by smokers. Another $13.6 billion (indirect costs) was due to lost productivity through sick days and early death, the latter being by far the more important factor. Deaths before age 65 due to smoking accounted for about 88% of the indirect costs for men and 66% of these costs for women. The total cost of smoking was $16 billion annually for both sexes. Over a lifetime, the cost to the Canadian economy was almost $20,000 for every man and almost $15,000 for every woman who had ever been a smoker (Table 1, second double column). On average for both sexes, each adult who had ever smoked created health expenditures of $3,400 and indirect costs of almost $14,000. The total annual costs were substantial (first double column) because of the number of current and former smokers— 7.4 million men and 6.4 million women in 1996/97.2 Table 1 also shows the savings that could arise from preventing smoking with a national school-based smoking prevention program of modest success—our base case of 6% declining to 4% (third double column). For men and women respectively, reduced smoking would result in savings of over half a billion and over one quarter of a billion dollars annually. The total potential savings could amount to $639 million annually, of which almost $100 million would be saved on health care alone. The net savings (net present value) of smoking prevention after paying for program delivery would be sizable — $619 million for the base case. The benefit-cost ratio of smoking prevention was obtained by dividing the per-person savings (Table 1) by the per-student cost of $67 and adjusting for the effect of the program. The resulting ratio of benefits to costs was 17.7 for males and 13.1 for females for the base case (Table 2). In other words, a school-based program of smoking prevention of modest success could produce an overall return of $15.40 for every $1.00 spent.
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This overall benefit-cost ratio of 15.4 is reduced when inflation is higher, the program effect is reduced or the costs of the prevention program are increased (Table 2). However, in each of these cases, the benefit-cost ratio is still well above 1.0, that is, there is economic benefit for all of these scenarios. Indeed, the returns on prevention are positive even when only health costs are considered as benefits or when lost productivity due to early death is assumed to last only three months. Even in the extreme case of a relatively expensive program of 18 sessions that achieves only a minimal effect of a 1% decline in smoking, $2.00 would be returned for every dollar invested in prevention.
These results show that, under a wide range of conditions and assumptions, smoking prevention programs in schools can produce a substantial economic benefit. Indeed, the returns described here are conservative, since they omit several costs that are difficult to estimate: disease-related costs from environmental tobacco smoke (ETS), property damage costs from ETS, the cost of creating separately ventilated public smoking areas, increased life insurance costs for smokers, the cost of deaths before age 45 and work lost during smoking breaks away from the workplace. Some of these costs have been estimated in a study of the working population.15 In 1995 dollars, the annual cost per smoking employee was estimated at $75 for life insurance, $85 for a smoking area and $2,175 for decreased productivity due to cigarette breaks. These costs were not included in the present study, as the methods for estimating them are not yet widely accepted, but they do serve to indicate that the present estimates of the economic toll of smoking are conservative. Moreover, the method we used to estimate the direct and indirect savings is also conservative. For smokers of all ages we used the average costs of their health care, work absence and early death, and applied these averages to the appropriate number of smoker-years. When we calculate these costs on an age-specific basis, as some would prefer, the total (i.e. the potential saving) is substantially higher—about 60% higher for women and 80% higher for men. This is because the income foregone by early death occurs during workers' peak earning years. We used the more conservative averaging approach because the alternative puts too much emphasis on the indirect costs. Further, the values used for program costs in this study are very inclusive, covering all operating costs inside and outside the classroom, debt service and even capital costs. The per-student cost of $67 used in our base case is thus considerablly higher than the US value of $48.6 As illustrated by the sensitivity analyses, the benefit-cost ratio is very sensitive to the cost value used. The benefits of prevention are understated in this study for another reason: the cost-of-illness approach emphasizes the individual's productive potential and omits any consideration of pain, suffering or reduced quality of life. It thus produces a lower-bound estimate of the benefits of prevention.5 Despite these difficulties, the cost-of-illness approach is the most satisfactory for this type of analysis at the present time, because reliable data are available for estimating the costs averted. |
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Some economists might object that our calculations do not account for savings on pensions due to early death, but such "savings" are illusory, since pensions are typically paid to survivors even if the worker dies early. Nor have we taken account of the economic contribution of cigarette manufacturing and retailing in the form of excise and income taxes. Other analyses, however, show that the societal costs of smoking far outweigh these public revenues.16,17 Tables 1 and 2 reveal substantial male/female differences in both direct and indirect costs attributable to smoking. This is due to men's longer length of hospital stay (since they tend to be sicker than women smokers), the greater labour force participation of men aged 45 and older, the higher earnings of these men and their tendency to die of smoking-related causes younger than women do. This sex difference is likely to change with time as male and female rates for smoking prevalence and incomes converge. Present indications are that convergence in costs will arise as much from increased smoking-related disease among women as from decreased disease among men.2 These tables also show that indirect costs due to lost productivity are far higher than even the considerable direct costs due to health care. Lost productivity arising from worker illness and early death is a genuine loss to the economy, and it needs to be included to give a full picture of the cost of smoking. The cost-of-illness approach in this study is similar to that adopted by other researchers as diverse as the Conference Board of Canada,15 the US Centers for Disease Control and Prevention6 and the Canadian Centre on Substance Abuse,16 with similar results. Although cost-benefit analysis takes a societal perspective and attempts to include most relevant outcomes,5 the calculation of the indirect costs is sometimes controversial. For this reason, we tested the effect on the benefit-cost ratio of limiting the cost of early death to three months rather than the balance of the smoker's expected work life. The result is still a substantial $7.70 returned for every $1 spent on prevention. There are few published studies comparable to the present one. The CDC/Battelle Institute analysis6 that provided the model for the present study is the most similar, but its results were based on parameters slightly different from ours. Using an inflation rate of 5% and a long-term program effect of 4.8%, they calculated a benefit-cost ratio of 18.5. Our result of 15.4 compares reasonably well, given the sensitivity of the ratio to inflation and the fact that the US program delivery costs were less inclusive than those in our study while their health care system is more expensive. The returns for prevention programs in both these analyses are rather larger than those reported for a cessation program for pregnant women, which ranged from $3.31 to more than $6.00 for each dollar invested.18 It is instructive to note that smoking prevention programs also provide far higher economic returns than either drug education or sex education, according to the CDC/Battelle Institute study.6 This is consistent with a cost-effectiveness analysis whose conclusion was that smoking prevention would save lives more efficiently than most other lifestyle interventions, such as weight loss or cholesterol lowering.19 Only immunization for measles, mumps and rubella appears to have a benefit-cost ratio (14.0) comparable with that of smoking prevention.20 The results of the sensitivity analyses in Table 2 show that positive economic returns from smoking prevention could be expected across a wide range of conditions. Even when a more extensive (and expensive) program achieves only a modest effect of 1%, the future savings are substantial. But the fact remains that effective programs do not currently exist in Canada on a sufficiently widespread basis that even such modest returns could reasonably be expected. Thus, the savings indicated here must be regarded as only potential benefits until such time as effective smoking prevention programs are implemented nationally. Effective programs are definitely achievable. School-based intervention appears to work best when accompanied by coordinated community action.21 Among other measures, this should include a complementary mass media campaign,22 smoke-free schools,23 accessible smoking cessation services24 and peer-led extracurricular programs25 together with widespread smoke-free bylaws and high prices for cigarettes.26 Such multi-faceted approaches will cost more but may well have a greater effect than the modest 4% in our base case. At the same time, better efficiency may result if prevention is focused on high-risk schools.27 Current programs expose all students regardless of their level of risk, and they are not very effective programs.4 In conclusion, this study reveals that very substantial economic returns could be expected from an effective program of smoking prevention in Canadian schools. Other benefits such as enhanced quality of life have not been considered here, but they are at least as important and the gain in this regard would likely also be impressive. However, such prevention programs are not currently implemented widely enough to expect such benefits. This analysis provides an argument in favour of more widespread implementation.
This study was funded by a grant to the Canadian Association for School Health from the Tobacco Demand Reduction Strategy at Health Canada.
1. Health Canada. Canadian Tobacco Use Monitoring Survey. 1. Summary of results. Ottawa, 2000 Jan. 2. Federal, Provincial and Territorial Advisory Committee on Population Health. Statistical report on the health of Canadians. Ottawa: Health Canada, Statistics Canada and Canadian Institute for Health Information; 1999 Sept. 3. Health Canada. Canadian Tobacco Use Monitoring Survey. 5. Youth and young adults. Ottawa, 2000 Jan. 4. Health Canada. School smoking prevention programs: a national survey. Ottawa, 1994. 5. Clemmer B, Haddix AC. Cost-benefit analysis. In: Haddix AC, Teutsch SM, Shaffer PA, Dunet DO, editors. Prevention effectiveness. New York: Oxford University Press, 1996. 6. Rothman ML, Ehreth JL, Palmer CS, Collins J, Reblando JA, Luce BR. Is school health education cost effective? An exploratory analysis of selected exemplary components [unpublished monograph]. Centers for Disease Control and Prevention/Battelle Institute, 1996. 7. Glynn TJ. Essential elements of school-based smoking prevention programs. J School Health 1989;59:181-8. 8. Health Canada. The PAL Smoking Prevention Program. Ottawa, 1988. 9. Health Canada. Improving the odds. Ottawa, 1995. 10. Abernathy T, Bertrand L. Preventing cigarette smoking among children: results of a four-year evaluation of the PAL program. Can J Public Health 1992;83:226-9. 11. Nova Scotia Department of Health, Drug Dependency and Tobacco Control. Smoke-free for life: a smoking prevention curriculum supplement. Halifax, 1996. 12. Canadian Teachers' Federation. Cost of schooling in 1995-96 a bargain at $7.29 per pupil-hour. 1996 Jan:15-16; CTF Economics Service Notes. 13. Kaiserman MJ. The cost of smoking in Canada, 1991. Chronic Dis Can 1997;18(1):13-9. 14. Desjardins B, Dumas J. Population ageing and the elderly: current demographic analysis. Ottawa: Statistics Canada, 1993; Cat 91-533E. 15. Conference Board of Canada. Smoking and the bottom line: the costs of smoking in the workplace. Ottawa: Health Canada, 1997. 16. Single E, Robson L, Xie X, Rehm J. The costs of substance abuse in Canada. Ottawa: Canadian Centre on Substance Abuse, 1996. 17. Choi BC, Pak AW. Health and social costs of tobacco use in Ontario, Canada, 1979 and 1988. J Epidemiol Community Health 1996;50(1):81-5. 18. Marks JS, Koplan JP, Hogue CJ, Dalmat ME. A cost-benefit/cost-effectiveness analysis of smoking cessation for pregnant women. Am J Prev Med 1990;6(5):282-9. 19. Tsevat J. Impact and cost-effectiveness of smoking interventions. Am J Med 1992;93:43S-47S. 20. White CC, Koplan JA, Orenstein WA. Benefits, risks and costs of immunization for measles, mumps, and rubella. Am J Public Health 1985;75:739-44. 21. Perry CL, Kelder SH, Murray DM, Klepp K-I. Community wide smoking prevention: long-term outcomes of the Minnesota Heart Health Program and the Class of 1989 Study. Am J Public Health 1992;82(9):1210-6. 22. Flynn BS, Worden JK, Secker-Walker RH, Badger GJ, Geller BM, Constanza MC. Prevention of cigarette smoking through mass media intervention and school programs. Am J Public Health 1992;82:827-34. 23. Pentz MA, Brannon BR, Charlin VL, Barrett EJ, MacKinnon DP, Flay BR. The power of policy: the relationship of smoking policy to adolescent smoking. Am J Public Health 1989;79(7):857-62. 24. Centers for Disease Control and Prevention. Guidelines for school health programs to prevent tobacco use and addiction. J School Health 1994;64(9):353-9. 25. Carr RA. Mobilizing peer support to assist in tobacco reduction. Ottawa: Health Canada, Tobacco Reduction Programs; 1996. 26. Stephens T, Pederson LL, Koval JJ, Kim C. The relationship of cigarette prices and smoke-free bylaws to the prevalence of smoking in Canada. Am J Public Health 1997;87:1519-21. 27. Manske S, Brown KS, Cameron AJR. School-based smoking control: a
research agenda. Cancer Prev Control 1997;1(3):196-212.
Author References Thomas Stephens, Thomas Stephens & Associates, Manotick, Ontario Murray J Kaiserman, Bureau of Tobacco Control, Health Canada, Ottawa, Ontario Douglas J McCall, Canadian Association for School Health, Surrey, British Columbia Carol Sutherland-Brown, Tobacco Reduction Division, Health Canada, Ottawa, Ontario Correspondence: Thomas Stephens, Thomas Stephens & Associates, 1118
John Street, PO Box 837, Manotick, Ontario K4M 1A7;
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