Effect of the California Tobacco Control Program on Personal Health Care Expenditures

Abstract

Large state tobacco control programs have been shown to reduce smoking and would be expected to affect health care costs. We investigate the effect of California's large-scale tobacco control program on aggregate personal health care expenditures in the state. Cointegrating regressions were used to predict (1) the difference in per capita cigarette consumption between California and 38 control states as a function of the difference in cumulative expenditures of the California and control state tobacco control programs, and (2) the relationship between the difference in cigarette consumption and the difference in per capita personal health expenditures between the control states and California between 1980 and 2004. Between 1989 (when it started) and 2004, the California program was associated with $86 billion (2004 US dollars) (95% confidence interval [CI] $28 billion to $151 billion) lower health care expenditures than would have been expected without the program. This reduction grew over time, reaching 7.3% (95% CI 2.7%–12.1%) of total health care expenditures in 2004. A strong tobacco control program is not only associated with reduced smoking, but also with reductions in health care expenditures.