An assessment of the economic costs of smoking in Ireland

In 2015 following a competitive tender process, the Tobacco and Alcohol Control Unit commissioned research on the economic cost of smoking and awarded the contract to ICF International (UK) in association with DKM Economic Consultants (Ireland). The final research report was provided to the Department in March 2016 along with a separate Technical Annex.

Summary findings from the report:

It is estimated that 5,962 people are killed annually by smoking. The estimated annual costs are:  healthcare – €506 million, lost productivity – €1,071 million, fires – €6 million, litter -€69 million, loss of welfare due to smoking-related (i) morbidity – €1,355 million and (ii) mortality – €7,657 million.

Background

Tobacco Free Ireland, the Government’s tobacco policy document commits the Department to  engage in an active research programme in monitoring tobacco use and its impact on the population.  Despite the harms caused by tobacco use, there was no comprehensive evaluation of the economic costs of smoking in Ireland.

Methodological issues

The report was informed by an extensive literature search on the health effects of tobacco and the economic costs of same.

Most of the studies worldwide do not cover the range of smoking related costs included in this report and as a causal relationship to smoking has been established for more diseases than are covered in these studies, they tend to underestimate the full costs.

2013 was taken as the base year as this was the year with the most comprehensive data sets available. Healthy Ireland 2015 provided smoking prevalence data.

Costs were estimated for healthcare, lost productivity, fires, litter and loss of welfare due to smoking-related morbidity and mortality.

Key findings

Mortality

It is estimated that smoking causes 5,870 deaths per annum with an additional 92 per annum as a result of exposure to second hand smoke (SHS) (Table 1).  This is an increase from an estimated 5,200 deaths per annum previously calculated, the increase is due to more cancers and respiratory diseases being attributable to smoking than heretofore.

Table 1 – Estimated deaths from smoking and exposure to SHS, 2013

Condition Death from smoking Deaths from SHS exposure Total
Cancers

2860

7

2867

Cardiovascular diseases

1410

85

1495

Respiratory diseases

1530

0

1530

Other diseases

70

0

70

Total

5870

92

5962

Of the 5,962 deaths, just over six in every ten (61% -3,644) occur in men and four in every ten (39% – 2,318) occur in women.

Healthcare costs

The estimated cost to the healthcare system as a result of smoking is over a half a billion euro (€506 million) as outlined below:

  • Hospital based costs €211 million
  • Primary care costs €256 million
  • Domiciliary care costs €40 million.

Productivity costs

The estimated cost of lost productivity is over €1 billion (€1,071 million) as outlined below:

  • Loss of productivity- smoking breaks €136 million
  • Loss of productivity – smokers’ absence €224 million
  • Loss of productivity – premature death €711 million.

Cost of fires

The estimated cost from fires caused by smoking materials and matches is €6 million (€3.9 million dues to fires and €2.0 million due to loss of life as a result of fires).

Cost of litter

The estimated cost of smoking related litter is €69 million

Loss of welfare

  • The loss of welfare from morbidity relating to smoking is estimated at just under €1.5 billion (€1,355 million)
  • The loss of welfare from premature mortality has been estimated at  nearly €8 billion (€7,657 million)

A sensitivity analysis was carried out as part of the research to explore how different assumptions might affect the findings. These are outlined in  table 2.

Table 2. Sensitivity analysis on the economic cost of smoking in Ireland.

 

Low Cost (€m)

Central Cost (€m)

High Cost (€m)

Healthcare costs

270

507

842

Productivity costs

940

1,071

1,623

Cost of fires

6

6

7

Cost of litter

63

69

75

Sub-total

1,279

1,653

2,547

Loss of welfare: morbidity

769

1,355

2,533

Loss of welfare: mortality

7,566

7,657

7,855

Subtotal

8,335

9,012

10,388

Total

9,614

10,665

12,935

Conclusion

The economic cost of smoking is substantial and places a huge burden on individuals, on the healthcare sector, and on the wider economy.  Reducing smoking rates to less than 5% by 2025 is an important policy goal to be pursued.