Who's Counting?

You could be forgiven for thinking that the health system could save $1.9 billion if tobacco had never existed. That’s what the Ministry of Health says smoking costs the public system. But you’d be wrong. The ministry’s latest estimate of the cost of smoking has nothing to do with the costs that smokers impose on taxpayers or the costs that could be avoided if smoking were to disappear.

After sorting the population by age, gender, income, ethnicity and smoking status, they compared the costs of providing health services to smokers as compared to non-smokers for each group.

But there are two very big problems with this way of estimating costs.

Everybody dies sometime and most of us will incur end-of-life costs that will be paid for by the public health system.

Suppose that a smoker will die at age 65 and a non smoker will die at 75. Comparing 65-year-old smokers to 65-year-old non-smokers and calling the difference the cost of smoking than rather biases upwards the measured costs of smoking.

We ought to be comparing the health costs of a non-smoker dying at age 75.