Smoking-attributable medical care costs in the USA

Medical care costs attributable to cigarette smoking are estimated using an econometric model of annual individual expenditures for four types of medical services: ambulatory, hospital, prescription drug, and other (which includes home health and durable medical equipment and excludes dental and mental health). The model follows the two-part specification of Duan et al. (1983). Estimation is carried out using the 1987 National Medical Expenditure Survey. Fitted values are used to calculate smoking-attributable fractions (SAFs) of expense by type of service and by age and gender category. The overall weighted average SAF is 6.54%. SAFs are generally largest for ambulatory and smallest for hospital expenses. They are larger for males and for the older age categories. The model is analyzed for heteroscedasticity and goodness of fit. Additional analysis using the National Health Interview Survey is conducted to test for the possible effect of not being able to include alcohol consumption in the primary model. A balanced repeated replication analysis is conducted to evaluate the variance of the SAFs. Variances are found to be acceptably small. An extension of the model to support evaluation of smoking-attributable costs for special populations such as individual states, and special insurance pools such as Medicaid recipients, is described. Results for the fifty states are presented. Conclusions and subjects for further research are discussed.