Can Regulation Of Tobacco Affect Health Care Costs Economics Essay

Can Regulation Of Tobacco coin wellness C ar Costs Economics EssayThe economic calculations touch ond with baccy plant plant plant apply atomic number 18 very complicated. For eery nest egg, there argon affix speak to in another(prenominal)(a) areas. many a(prenominal) productivity live are subjective, opus things like tax revenues are very definitive. These cost female genitalia be absorbed by various entities state-supported, private, and g bothwherenmental. The tobacco plant plant effort has been viewed as the root of many of these be. This attention has historically been exempt from oversight by any governmental agency, other than taxation. The Food and Drug Administration (FDA) has recently taken charge of overseeing and regulating many tobacco products, including cigarettes. Can the recent regulations contrive any effect on wellness occupy be?Why is tobacco social function such a big crapper?According to the World health Organization (W HO), tobacco is the mho major(ip) cause of death in the world, responsible for one in ten vaulting horse bill adults and the fourth comfortably-nigh common risk promoter for disease widely distri exclusivelyed (2010). Costs (both public and private) associated with health boot related to tobacco are astronomical. Productivity is taked or lost when pot are at their prime due to tobacco use. A 1994 report estimated that the use of tobacco resulted in an annual global net want of US$ two hundred thousand million, a third of this loss being in development countries (World Health, 2010). This paper forget look at the be associated with tobacco use in the unify grounds and the relationship regulation may put one over on reducing these be.Compared to the length of time tobacco has been use, the health effects of its use are just recently becoming lowstood by the general public. Prior to this knowledge, the tobacco companies were free to advertise without any regulatio n. 1789 saw the original tobacco advertisement in the U.S for snuff. Communication, transportation, and manufacturing constraints of the time prevented any major stigmatization and selling successes.The first strong national tobacco carry didnt go away until near the end of the Civil War, when both Union and Confederate ex transplantiers in shorthorn, North Carolina raided a local farmers tobacco crop while postponement for a surrender to be completed. After the war was over, these soldiers began writing to the farmer, Mr. deception Green, requesting to a greater extent Green went on to establish the successful Bull Durham Tobacco Company. (Collins Lapsley, 2010)The cigarette machine was one of the two major innovations that changed the pains and embedded tobacco into the minds of Ameri crappers. It was introduced in the 1880s and allowed companies to go from producing 40,000 hand-rolled cigarettes a daylight to over 4 million. The other major innovation came in the hurl of advertising. The color lithograph revolutionized advertising and doughnutaging. These factors allowed companies to brand their products, searing them into the fabric of everyday life. Promotions, such as trading cards, were packaged with cigarettes and became collectors items.World War II came and went with millions of soldiers and sailors prone to nicotine courtesy of free cigarettes issued along with meals. Marketing remained pretty much unregulated throughout the 1950s. Advertisements promoted how healthy it was to smoke and how doctors (whom the public trusted) recommend one brand over a nonher. Sponsorship of television shows, like The Flintstones and Gunsmoke, propelled cigarette fastball into a public and expected part of life. For tobacco companies, it was the Golden Age cigarette ads mystify endorsements from dentists, doctors, babies and even Yankees slugger Mickey Mantle (Collins Lapsley, 2010). explore evidence was blood line to mount of a link between tobacc o use and lung apprizecer. Filtered cigarettes were born, which in the end led to light and low tar brands all of which impart been be to be no safer than regular ones. Rising public interest in health issues associated with tobacco use and concern about social be associated with the care of sick tobacco users have created an atmosphere less(prenominal) unsubtle than before. In the United States, social acceptance of tobacco use is rapidly declining.1964 saw the first real public scrutiny of the tobacco industry when the U.S. Surgeon General released his first report on locoweed and Health. This cosmopolitan report outlined how tobacco had been shown in over 7,000 scientific studies to be linked to lung potcer, emphysema, and other diseases. This was the tipping point for many. Warning labels were mandated on packages. Advertising restrictions for radiocommunication and television were put in place. The public was put on identify that tobacco may not be all the things t he industry was cogent them. 18 Surgeon General reports have followed, as virgin findings have been proven. In 1996, cigarettes were label an addictive drug. The FDA sought to gain control over the industry and limit the gross revenue and advertising of tobacco products (Brant, July 2008). With presidential take, the unconditional Court ruled in favor of the industry in 2000 claiming the federal agency was never stagen the proper authority to regulate tobacco by Congress (Brant, July 2008).Restrictions are not new to the tobacco industry. extremely deep pockets have allowed them the opportunity to design ways around al roughly hurdles in the past (See Appendix). Regulation comes in many forms. State and local governments have passed laws throughout the years, most of which regard taxation. The recent race of the U.S. Food and Drug Administrations (FDA) tobacco regulation bill will give the national government much to a greater extent power over the manufactures actions. Th is is the broadest and most comprehensive regulation over the tobacco industry ever. The FDA will be able to control product ingredients, labeling, food securities industrying, and determine whether new products should be distributed.The budgetary equal of smokingCosts related to tobacco use hindquarters be looked at from different perspectives. on that point are related costs that are only seen by the individual, their family, and those close to them. Then there are the costs that are seen by society. These social costs are what force many of the regulatory policies we have in the U.S. These costs must be balanced and weighed with the benefits associated with tobacco use. Organizations from several fronts are quick to weigh in on advantages and disadvantages of such policies. Each has their own agendas and use data to support them. High social costs justify more restrictive policies, while lower social costs support the communication channel against such policies. calculati ng these costs is not simple. It is important not to count the same costs twice. A sick smoker that becomes dependent upon welfare payments instead of their chore salary should not be seen as lost productivity and the cost of welfare payments. The first is a real cost (a real loss of resources) while the second is a pecuniary cost (a redistribution of resources from taxpayers to the smoker) (Adhikari, et al. December 30, 2008, p. 1227).Health care costs in the United States continue to account for an ever increasing percentage of in the flesh(predicate) and public expenditures. The budgetary impact of tobacco use generally is looked at as whether the tax revenues cover the costs that tobacco use imparts on government agencies. These costs are not just paid by these agencies. Personal and business costs, such as those of health insurance companies, bear massive burdens too. While we are very much asked Do smokers cover the smoking-related costs that the rest of the community bears ?, the more pertinent question is Does the tobacco industry cover the communitys smoking-related costs?. The answer to this second question is roughly certainly no (Lindblom, 2010, p. 2). It has been estimated by the CDC that each pack of cigarettes sold in the United States costs the nation more than $7 in medical care and lost productivity (2010).The lifetime health costs of tobaccoIt is important to chthonicstand the difference between the lifetime personal health care costs of smokers compared to non-smokers. There is an argument that smoking provides benefits as well. It may be perspicuous that smokers have higher costs during their lifetimes, but one must consider the non-smoker lives a longer, more productive life, and so uses health care services for a longer period of time. Philip Morris, a major tobacco company conducted a detailed data abbreviation and submitted a 1999 official report to the government of the Czech Republic that they should let Philip Morris sell ci garettes in their country. They (Philip Morris) said that the government would save approximately $1,227 US per person on savings of health care for older large number and increase in taxable revenue (Philip Morris, 2000). The industry is in a catch 22 situation when arguing this point. Premature death associated with tobacco use must be admitted and the economics must outweigh humans life.The Center for infirmity control estimates that male smokers have approximately $16,500 more lifetime health care cost and females have approximately $19,500 than those that do not smoke. (Campaign, 2010) This adds up to considerable amounts that more or lessone must absorb. The nationwide count in 2004 was almost $98 billion(Adhikari, et al. 2008, p. 2228).Measures to overturn tobacco demandThere are many different regulatory measures that can be used to significantly impact tobacco use, such as bans on identify and in learn tobacco advertising, tobacco tax and monetary value increases, sm oke-free environments in all public and workplaces, and large clear graphic health messages on tobacco packaging (Collins Lapsley, 2010).Tobacco taxation valueation is probably the most effective (and certainly the most cost-effective) means of reducing tobacco consumption. Studies have shown that higher prices equate to less pot using, especially youth. Young people have less disposable income than older people. This makes them more sensitive to changes in price. Adult tobacco use in any case changes in relation to price increase too, but not as much as youth. Burman notes that investigate has shown that a 10 percent increase in the price of cigarettes would reduce youth smoking by more than 10 percent (Brandt, July 31, 2008, p. 447). Taxes can be used to this benefit, along with the increase in public gold that can be focused on tobacco legal profession programs. queen taxes can be seen as a double edged sword. Governments can become as addicted to the tobacco tax income as smokers are to lighting up every day. The amounts of money are astronomical. The President of the United States, Barack Obama signed into law on February 4, 2009 a 62-cent federal tax increase per pack of cigarettes, along with increases in other types of tobacco too. This money is to be used to fund the State Childrens Health Insurance Program (SCHIP), a major childrens health enlighten package. The federal cigarette tax is $1.01 per pack and the average state tax is just over $1.00 per pack. According to the Tax Trade Bureau, over 16 billion state tax-paid packs were sold in FY2009. The total tobacco revenue generated for government use is approximately $39 billion. This significant figure is enough to get any legislator looking for the source and wondering how to keep it.Several states have hoped to fund health care with tobacco dollars. Massachusetts, California, Oregon, and even the federal SCHIP program have come under heavy opposition from the tobacco industry. The SCHIP pro gram was finally approved, but the other propositions ultimately failed. The primary argument used against such taxes is that a tobacco tax is a regressive tax, meaning that it prompts poor people more so than others. Approximately 33 percent of those living at or on a lower floor the poverty level smoke. The argument is that a greater stack of their income is spent on tobacco, and therefore the tax would be greater. Counter to this argument for the SCHIP funding is that the program is designed to disproportionately benefit those in this income level. And so, under an expanded SCHIP, low-income families would have essentially paid $164 to get $1,700 worth of coverage (Robert Wood, May 18, 2009).Theres a big difference in the cost to society and what society is getting back in tax, said Dr. Terry Pechacek, the associate director of the CDCs Office of Smoking and Health. We believe society is bearing a burden for the individual behavioral choices of the smokers. A study by the Cent ers for Disease agree and Prevention put the nations total cost of smoking at $3,391 a year for every smoker, or $157.7 billion (Curfman, Morrissey, Drazen, June 22, 2009). Poverty and tobacco are closely linked. Some studies have noticed that in some(a) countries, the poorest households can spend up to 10 percent of their entire income on tobacco products. It is demanding to ascertain how this might have a direct impact on malnutrition, health care and longevity of life, as well as things like literacy rates. Tobacco has a wide reaching impact.Restrictions on advertising and other promotionAnti-tobacco campaigners support restrictions on advertising and promotion. It seems obvious that promotion and advertising increase the demand to use, or the industry would not spend the amounts they do. According to the Campaign for Tobacco Free Kids, from 1998 to 2006, tobacco industry marketing has change magnitude, nationwide, by more than 85 percent, with tobacco industry marketing in 2 006 totaling at least $12.8 billion (or more than $35 million per day) (2010). The tobacco industry addresses these concerns with the rhetoric that advertising does not increase the market size, merely determining the market shares of individual firms. While this point is difficult to determine, a key finding from the national youth tobacco discern paint a pictures that the trey most heavily used brands of cigarettes by teens are the three most heavily advertised by the industry.Studies on the effect of these restrictions indicate that partial restrictions (i.e. location or type only) have little impact on demand. Restrictions on advertising and marketing do not change the amount the industry spends, only the location and types of activities. They simply shift to non-restricted types of marketing. This is why it is difficult to determine the effectiveness of marketing restrictions. When restrictions are imposed that affect multiple avenues, tobacco consumption goes down significa ntly. This supports the thought that marketing increases the market size, not just move customers from one brand to another.Health culture and counter advertisingAnti-tobacco campaigns use pro-health messages and counter-marketing campaigns have been show to have some effect in swaying people away from use. The premise is that the better educate users or potential users are, the better chance they will chose not to us the products. This is a difficult avenue to promote anti-tobacco messages, as it is extremely dear(p) and directly competes with the marketing expenditures of the tobacco industry. There is no way to match, dollar for dollar. Success comes from the combination of efforts counter-marketing with the other restrictions. There is a synergistic effect.Smoking restrictions and bans on sales to youthYouth tobacco use is of extent importance to the tobacco industry and the anti-tobacco movement organizations. From the 1950s to the present, different defendants, at differen t times and using different methods, have intentionally marketed to four-year-old people under the age of twenty-one in order to call down second-stringer smokers to ensure the economic future of the tobacco industry (Campaign, 2010). Where someone can smoke has become a frontline issue. Restrictions of the location, such as restaurants, workplaces, and other public places, make it more difficult for the smoker to light up. This creates an inducement to quit and reduces the opportunity for others to start. These restrictions reduce the amount of tobacco people use, reduce the prevalence of smoking, and have a direct impact on the characterization of second-hand smoke to others.Other smoking cessation interventionsCessation programs have make an impact on tobacco prevalence too. Pharmacological product advancements, from nicotine replacement therapy (NRT), to newer products such as Chantix have helped the tobacco user assure success. These products are heavily marketed and man y health care organizations provide them with little or no costs associated to the patient. Some argue the cost benefit of public subsidy of these products is a win-win based on health care costs saved.FDA Tobacco LegislationThrough the Family Smoking Prevention and Tobacco Control Act, the Food and Drug Administration of the U.S. federal government was recently apt(p) authority to oversee many tobacco products. Members of Congress and health organizations have worked toward this goal for many years. This new authority includes many of the items discussed above, i.e. manufacturing standards, marketing and sales practices. The legislation is a very comprehensive approach to changing tobacco use among Americans, now and for future generations. New standards for additives, flavors (other than menthol), restrictions on sales, distribution, and marketing apply. detailed ingredients will have to be disclosed. The FDA will have the authority to inquire changes to products. This is the f irst major governmental step to protect the public from the harms of tobacco. The new lawRestricts Marketing and Sales of Tobacco Products to Children bans ads within speed of light0 feet of schools and playgrounds eliminates honeyed (candy flavored) cigarettesRequires Detailed Tobacco Product DisclosureProvides Access to Tobacco Manufacturers ResearchStrengthens Tobacco Product Warning Labels warning labels must cover 50 percent of the front and back of the pack.Allows FDA to Require Changes to Tobacco Products to Reduce jeopardy Where Technologically FeasibleRegulates Health Claims For Scientific Accuracy And Public Health ImpactEvaluates Reduced Risk Health Claims For New Products eliminates cigarettes from being labeled light or low tarRegulates Only Manufacturers, Not FarmersThe congressional Budget Offices (CBO) examination of the new law shows an expected reduction in the number of underage tobacco users of 11 percent by 2019. CBO likewise estimates will contract to a further decline in smoking by adults by about 2 percent after 10 years. The expected impact of the legislation on the use of tobacco products stems from a combination of regulatory and economic factors. (Congressional, 2009)Impact of FDA Regulation of Tobacco on MedicaidThe Congressional Budget Office (CBO) anticipates that the new FDA tobacco rules will lead to a reduction in smoking among pregnant women. Pregnant women that do not smoke during pregnancy are less likely to have low birth weight children. Low birth weight kids cost more at birth and during childhood. As a result, state expenditure for Medicaid would decrease by an estimated $17 million over the 2010-2014 period, with additional savings in subsequent years (Yang Novotny, 2009). Medicaid expenditures are expected to be trim down by $100 million over 10 years. Other Medicare expenditures are positively affected by the FDA rules too. Heart attacks and stroke are less likely to occur in non-smokers, which will mean acute care services costs will decrease, but it is unclear as to by how much. Medicare costs may increase in some areas due to increased life spans and the payout associated with that.ConclusionA key aspect of tobacco prevention is that as people decide not to use tobacco products, their health will be generally better. If all Americans stopped smoking-beginning with this generation of teens-that would do more to improve the health of the nation that any other reform (Adhikari, et al. December 30, 2008, p. 1227). The economic calculations associated with tobacco use are very complicated. For every savings, there is an increase in costs in another area. Many productivity costs are subjective, while things like tax revenues are very definitive. Public and private costs have to be count on separately. However, there are situations where they overlap and care must be taken to count them in only one spot. For instance, someone that lives just below the poverty line and smokes may rely o n public assistance for many things, like health care. That same person quits and their relation household revenue and productivity increases. They may not be as reliant on public assistance. The increase in their revenue and productivity cannot be counted if the decrease in public assistance spending is also counted.It is certain that more regulation, like that in the new FDA program will indeed reduce tobacco use. It is certain that reduction in tobacco use equates to less money spent boilers suit on health care compared to the smoker, but may increase health care costs long term due to extended life span. It is certain that overall productivity will increase as tobacco use decreases. The real questions occur when these issues are followed by the question of By how much?. It is almost like Newtons Law of motion, for every action, there is an equal and opposite reaction. The factor that must be considered is the value of life length and productivity. These values can sway the eq uation massively in one direction or the other. The latest estimates of total smoking-attributable health care costs approach $100 billion. Private insurance covers 50 percent of smoking-related medical costs for people aged 19-64 (American Academy, 2010). Education about the effects of smoking on health continues to escalate. As more is learned, the estimates increase as to the costs associated with tobacco use.