Health Care System and Tobacco
Epidemic
Ayda Yurekli,
Senior Economic Advisor,
Tobacco Free Initiative, WHO, Geneva
Outline

The link between health system & tobacco epidemic
–
–

Should Serbia be worried about it?
–
–

2|
TA diseases
Who's burden is it anyway?
Serbia's comprehensive on smoke-free legislation
• Do smoke free policies hurt hospitality industry?
Price, and taxes on cigarettes.
Can Serbia do better?
28 April 2009
Deaths caused by tobacco use,
by diseases
Thousand deaths (2005)
1800
1600
(% of deaths from the disease caused by tobacco)
42%
1400
71%
1200
1000
800
8%
600
4%
400
10%
200
0
COPD
Trachea, Ischemic
bronchus hearth
and lung
disease
cancers
Source: Mathers and Loncar, 2006
3|
12%
28 April 2009
Cerebro
Lower Tuberculosis Other TA
vascular respiratory
diseases
infections
Tobacco will kill 176 million people worldwide between 2005 and 2010.
Cumulative tobacco related deaths (Million)
The developing world's share will increase from 70% in 2005 to 77% in 2030
200
2005
2010
2020
2030
176
180
160
77%
140
120
99
100
72%
80
60
23%
40
20
74%
70%
34
26%
72%
28%
30% 29%
22
5.4
0
Developing countries
Source: Lopez et al 2005
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2008
28 April 2009
Developed countries
Total
Who's burden is it anyway?
 Smokers & their families
– High opportunity costs of tobacco expenditures
– Lost family income due to diseases and disability
– Out of pocket expenditures for
• Tobacco products &
• Cure for diseases
 Society
– Cost for covering health care costs and production lost
 Government
– Development issue- strong link between health & development
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28 April 2009
High opportunity cost to Families
Example from Serbia
 On average Serbian daily smoker spend
35,804 Dinar / year on cigarettes.
 Given 317,623 Dinar GDP/capita in 2007
 Daily smokers spend 11.3% of their annual income on
cigarettes
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28 April 2009
Double burden on non-smokers and families
Health Risks and Medical Costs
Source: Donald F. Behan, Michael P. Eriksen and Yijia Lin March 31, 2005,
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28 April 2009
Double burden on non-smokers and families
Economic Costs
Source: Donald F. Behan, Michael P. Eriksen and Yijia Lin March 31, 2005,
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28 April 2009
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28 April 2009
Costs to Society
Taiwan
Type of Cost
Cost (Million)
Excess Absenteeism
US$ 184
Sick leave due to ETS
US$
Occupational injuries among smokers
US$ 1,032
Scotland
Absenteeism
£ 40
Productivity loss
£405
Loss due to fires
£
Sources: Tsai et al Tobacco Control 2005;14:33-37
Parrotta et al Tob Control 2000;9:187-192 ( Summer )
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28 April 2009
4
81
Should Serbia be worried about it?
SMOKING PREVALENCE RATE 2007
Ten leading risk factors as causes of disease burden measured in
DALYs in Serbia and Montenegro (2002), Males(%)
Smoking prevalence- age
standardized (%)
60
50
48
43
41
40
38
40
34
32
32
30
30
30
30
30
27
27
25
25
23
22
20
20
10
0
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Tu a
R rke
om y
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Fr a
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C rma
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S ep.
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S ki a
lo
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a
It a
A ly
lb
an
ia
0
Urban outdoor air pollution
Lead
Illicit drugs
Physical inactivity
Low fruit and vegetable intake
High cholesterol
High BMI
Alcohol
High blood pressure
Tobacco
108.6
Deaths attributed to smoking, all cause (1000s) in 2002
100.1
79.2
69.1
33.0
29.0
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28 April 2009
13.8 11.0
8.1
8.0
4.7
4.2
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18.6 18.0 17.7
2.8
5
10
15
20
25
Ten leading factors of disease burden measured in DALYs in Serbia
Montenegro (2002), Females (%)
Childhood sexual abuse
Lead
Alcohol
Unsafe sex
Low fruit and vegetable intake
Physical inactivity
High cholesterol
Tobacco
High BMI
High blood pressure
0
5
10
15
20
Should Serbia be worried about it?
Selected mortality as % of total mortality in
Serbia and Montenegro, 2002
Other diseases
23%
Digestive
diseases
3%
Respiratory
diseases
3%
Malignant
neoplasms
17%
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28 April 2009
Cardiovascular
diseases
54%
Should Serbia be worried about it?
NO, because
 Serbia has been drafting a new law on Comprehensive Ban on
Tobacco Smoking in (closed) public places to protect people from
second hand smoke.
 Smoke-free laws are popular & do not harm business
– 16 countries in the world are covered by comprehensive
smoke-free comprehensive laws
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28 April 2009
Political or economic argument?
Do Smoke Free Policies Hurt Hospitality Industry?
 There is no evidence of negative impact on sales or
employment in restaurant, bars and hotels found in 22 peerreviewed studies
– negative effect found by TI sponsored not-peer reviewed
studies
 NY introduced the smoke-free law in July 2003.
– In 2004 8.7% increase in business receipts for restaurants
and bars
– 10,600 new jobs Sources: Scollo , Lal, Hyland and Glantz. Tob Control 2003; 12: 13-20.
March 2004 The State of Smoke-Free New York City. A One-Year review,
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28 April 2009
New York
Bar and Restaurant Tax Receipts
Continued Increase since SFAA
Tax Receipts Collected
$35,000,000
$31,040,049
$30,000,000
$25,000,000
$20,346,519
$21,295,278
4/02-3/03 (preSFAA)
4/03-3/04 (postSFAA)
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
Source: New York city, 2008
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28 April 2009
4/06-3/07
Do Smoke Free Policies Hurt Hospitality Industry?
Evidence says NO
Sales rose after smoking
banned in restaurants and
bars in California
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28 April 2009
WHO FCTC –Article 8
Protect people from tobacco smoke
No safe level of second-hand smoke
 Smoke-free environments protect
– non-smokers health,
• help smokers quit &
– encourage smoke-free homes
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28 April 2009
Effect of smoke-free public places on
smoking behavior at home
 There is no evidence found that total ban on public places would
increase smoking in the home
 Evidence from UK show that total ban on public places has
 A. Increased:
– Smoke-free homes –22% to 37% between 1996-2003
 B. Saved
– £181m from prevention of fires and reduced cleaning costs,
and
– £2.8bn from improved productivity of staff no longer taking
smoking breaks
Source: Adrian O’Dowd, BMJ 2005;331:129 (16 July)
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28 April 2009
WHO FCTC –Article 8
Protect people from tobacco smoke
Practical Approach
Up to date,
evidence show
that there are no
ventilation
systems that
prevent the
exposure of SHS
Without substantial
capacity, air
cleaners will have
little impact on
SHS levels
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28 April 2009
Non
smoking
area
Smoking
area
Urinating
Prohibited
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28 April 2009
Urinating
permitted
Serbian people deserves Clean Air Quality same as New Yorkers
Ambient particulate matter, mg/m3
New York: Impact of smoking environments on air quality
Before Smoke-Free Air Act (SFAA),
Air Quality Was 50X Worse in Bars w/ Smoking than at the Holland Tunnel
1.535
1.6
1.4
1.2
Proposed EPA
24-hour outdoor
standard (.05 mg/m3)
1.0
0.8
0.6
0.4
0.485
0.2
0.0
0.006
0.017
0.021
Central Park
Holland
Tunnel
NonSmoking
Bar
Source: New York city, 2008
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28 April 2009
Smoking
Bar #1
0.580
Smoking
Bar #2
Smoking
Bar #3
Serbian people deserves Clean Air Quality same as New Yorkers
Ambient particulate matter, mg/m3
New York: Air quality after smoking ban
Air Quality in Bars Improved Significantly Post-SFAA
1.6
Pre-SFAA
1.4
1.2
1.0
0.8
0.580
0.6
0.485
0.4
0.2
0.174
0.146
0.021 0.042
0.093
0.0
Non-Smoking
Bar
Source: New York city, 2008
22 |
1.535
Post-SFAA
28 April 2009
Smoking Bar #1
Smoking Bar #2
Smoking Bar #3
Bottom-Line with Comprehensive Smoke-Free Laws
 Smoke free policies are cost effective on reducing smoking
behavior and consumption:
– WHO estimates that enforcement of smoke free policies would
save one DALY for $358
• (US guidelines consider an cessation intervention costing $2,587 or less per
life-year gained as cost effective)
 Many countries would likely to save from non-smoking
legislation:
– Evidence from:
• Canada: $32.2 million, and
• US: between $39 and $72 billion
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28 April 2009
Costs to Government via Health Care System
Economic Burden of Tobacco use
Direct Costs from the treatment of illness directly attributed to tobacco
usage accounted for
– 0.46 to 1.15 percent of gross domestic product (GDP) for United
States
– 0.13 percent of GDP in the United Kingdom
– 0.12 to 0.56 percent of GDP in Canada.
– 0.43 percent of GDP in China
 The social costs amount to 1.4% to 1.6% of GDP in the US; a
similar estimate came from Canada. The China study showed that
amount to be 1.7% of GDP (Jha and Chaloupka, 2000).
Social costs include costs due to indirect costs of morbidity and
premature mortality, as well as direct medical costs.
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28 April 2009
Serbia should NOT be worried
Consumption, Income and Price of Cigarettes in Serbia 1998-2009
160
200
140
120
150
100
80
100
60
40
50
20
0
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
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180
28 April 2009
GDP Index /capita,2005=100
Price Index/pack 2005=100 &
Cigarette consumption/capita/pack
250
Per capita consumption/pack
Price index January 99-09, 2005=100
GDP/capita Index at current prices 2005=100
Serbia should NOT be worried
 Serbia is among number of countries that ensures
sustainable financing for Tobacco Control
– Earmarked 1 dinar per cigarette pack (annually harmonized
with the rate of inflation) to fund tobacco control work,
• including smoking prevention,
• diagnostics and treatment of tobacco related diseases
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28 April 2009
Earmarking tobacco tax revenues for health:
Examples
 Egypt: 10 piaster's per 20 cigarettes for the students health insurance
 Qatar: 2% of tobacco import revenues for health awareness activities and tobacco
control activities
 Thailand: 2% of tobacco tax revenues for the Thai Health Promotion Foundation
 Nepal: 2 paisa/ stick on cigars and cigarettes for cancer care hospital
 Republic of Korea: 626 Korean Won/pack for the national Health Promotion Fund
 Mongolia: 2% of tobacco excise tax revenues for Prevention and Control for
tobacco and alcohol
 Finland: 0.45 % of tobacco tax revenue goes to health promotion and anti-tobacco
activities
 Iceland: 0.9% of gross tobacco sales for Public Health Institute
 Switzerland: 0.026 SFR per pack of cigarettes for tobacco control
 Poland: 0,5% of the value of the tobacco excise tax for smoking cessation
 Bulgaria: 1% of cigarette tax revenue for tobacco control and alcohol
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28 April 2009
Can Serbia do better? YES.
Serbia has the lowest excise tax and average retail price in the region
Average retail prices and excise tax share in
Cigarettes 2007
80
Price/pack US$
5
69%
70
59%
58%
4
58%
57%
56%
$3.2
50
4.5
66%
64%
60
3.5
44%
43%
$3.0
40
3
2.5
$2.7
30
$2.1
$2.1
2
$2.0
$2.0
$1.9
1.5
20
$1.1
10
1
0.5
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28 April 2009
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Average Price
$4.7
tri
a
Excise tax share as % of Retail Price
Excise tax
Can Serbia do better? YES.
Assuming other than tax and producer's price, there is no change in other factors
including per capita income
Current
54.5% increase 21% increase in
in excise from
excise from
31 to 48 RSD
48 to 58 RSD
Excise Tax/pack
31
48
58
Excise as % of RP
43.9%
47%
55%
Price/pack (RSD)
70.6
90
Price elasticity=-0.4
Revenue (Bill. RSD)
105
RSD & ( percentage change from current level)
33.3
40.7 (+22%)
44.4 (+33%)
33.3
35.7 (+7%)
33.7 (+1%)
Price elasticity= -0.8
Revenue (Bill. RSD)
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28 April 2009
Conclusion
 Serbia already moved forward with TC and showed its
political commitment with strong TC measures.
 Comprehensive smoke-free laws work and Serbians
deserve clean air.
 Comprehensive smoke-free laws DO NOT HARM
hospitality sector.
 Serbia has one of the lowest tax and price of cigarettes
in the region and has room to increase its taxes to
generate more revenues.
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28 April 2009