Study finds rate of return on tobacco dollars is best when directed to other health programs

Although some states have seen dramatic returns on their investment in tobacco control programs, many are using their tobacco-settlement dollars for purposes other than tobacco control.

Representatives of Cancer Care Inc. and the CHEST Foundation recently released data showing that some states with among the highest rates of lung cancer are spending the least amount per capita on tobacco-control programs.

Information provided to State Health Watch by Spectrum Science Public Relations and the Campaign for Tobacco-Free Kids indicates, based on activities in California, Massachusetts, Oregon, Florida, and other states, that:

  • Comprehensive state tobacco-prevention programs that are adequately funded can quickly and substantially reduce tobacco use.
  • State tobacco-prevention programs can be insulated against attempts by the tobacco industry to reduce program funding and otherwise interfere with their successful operation.
  • Program funding must be sustained over time to protect initial tobacco-use reductions and achieve further cuts.

A report from California, which in 1988 enacted Proposition 99 to increase cigarette taxes by 25 cents per pack, showed 20% of the new revenues earmarked for health education against tobacco use. Analysts say that despite increased levels of tobacco marketing and promotion, a major cigarette price cut in 1993, tobacco-company interference with the program, and periodic cuts in funding, the program still has reduced tobacco use substantially.

Since passage of Proposition 99, cigarette consumption in California has declined by more than 58%, compared to 33% in the country as a whole. In the 10 years following voter approval of Proposition 99, adult smoking in the state declined at twice the rate it declined in the previous decade. And from 1994 to 2000, smoking among those ages 12 to 17 declined by 35%.

In a similar program in Massachusetts, cigarette consumption declined by 32% between 1992 and 1999. Florida used tobacco-settlement funds for a program targeted to young people that in three years has seen smoking among middle-school students decline 47% and among high-school students by 30%, resulting in almost 75,000 fewer youth smokers. However, the governor and Legislature have cut funding for the program in every year since its inception, and for the first time, no statistically significant decline in smoking was observed between 2000 and 2001. Even more of a concern is the fact that increases in smoking between sixth and seventh grades and between seventh and eighth grades reached record high levels in 2001.

But despite this evidence that tobacco prevention efforts are successful in reducing tobacco use, and despite the assumption that reduced tobacco use will have a positive impact on health care costs down the road, many states simply are not taking advantage of the money coming to them from the multibillion dollar tobacco Master Settlement Agreement to implement and maintain programs in their states.

Agreement’s promise unfulfilled

"The states are missing a tremendous opportunity to save lives," says Peter Bach, MD, a pulmonologist and epidemiologist associated with New York City’s Memorial Sloan-Kettering Hospital, who was lead investigator on a study of state expenditures of settlement funds for tobacco control programs published in the Oct. 3, 2002, New England Journal of Medicine. "The agreement is not living up to its promise and most states are spending far less money on tobacco control than was recommended by the CDC [Centers for Disease Control and Prevention]." (See chart 1 and 2.)

Cancer Care Inc. and the CHEST Foundation analyzed the findings in Mr. Bach’s study and reported that the 10 states with the highest rates of lung cancer from 1994 to 1998 among men and women averaged $1.93 per capita and $2.67 per capita in spending on tobacco-control programs, respectively. The CDC’s recommendations to states range from $5 to $15 per capita per year for smoking-control programs, with a mean of $7.47.

His article noted that the agreement specifically states that one of its goals was to support "tobacco-related public health measures." As a result, he says, it had been hoped that states would invest a considerable proportion of their settlement revenue in comprehensive tobacco-control programs.

Because previous reports failed to take into account the fact that some states fund tobacco-control efforts from other sources, Mr. Bach and colleagues used a cross-sectional analysis to assess overall state expenditures for tobacco-control programs in the context of other state economic and health data. The results were disappointing for those hoping the settlement would be used to reduce smoking.

Mr. Bach found a mean expenditure on tobacco control of $3.49 per capita in 2001, with most states investing far less than the CDC recommended. Only six states exceeded the CDC recommendations. "State governments in aggregate distributed roughly $6.5 billion in settlement funds in 2001," he reports. "Approximately 6% of these funds were devoted to tobacco-control programs. In aggregate, health care expenditures made up approximately 41% of the total state settlement allocations; long-term care and medical research received 3% and 4% respectively; tobacco-growing communities received about 5%; and more than one-third of the funds were distributed to other non-health-related programs such as education, child and adolescent services, budget reserves, and miscellaneous programs. States with higher smoking rates had significantly lower expenditures for tobacco-control programs.

"This finding persisted even after tobacco-producing states were excluded from the analysis. Funding for tobacco-control programs also showed a trend toward an inverse correlation with the rate of smoking-related deaths." Mr. Bach says that in trying to identify state characteristics associated with use of settlement funds for tobacco control, they found that legislatures in tobacco-producing states tended to devote a lower proportion of settlement revenue to tobacco-control programs than did legislatures in other states. There was no relation between the proportion of settlement funds allocated to tobacco-control programs and various measures of tobacco-related health burden such as smoking rate, smoking-related mortality or morbidity from lung cancer, or smoking-attributable Medicaid expenditures.

The inverse correlation between state smoking rates and funding of tobacco-control programs is of serious concern, according to Mr. Bach. "A possible explanation for this finding is variability in the local tobacco culture among states," he says. "We found that tobacco-producing states were investing less than half as much in their tobacco-control programs as other states. Political and economic concerns may make it less attractive for lawmakers to support tobacco-control programs in these states."

Even when tobacco-producing states were excluded from the analysis, the inverse relation between smoking rates and funding of tobacco control programs persisted, suggesting that state tobacco production is not the sole explanation for the finding. Another possible explanation is that states with higher funding levels now have lower smoking rates as a result of their programs, but Mr. Bach says this explanation is unlikely given that most state tobacco-control programs are relatively new and that their effect is thought to be incremental, increasing over several years.

While some may argue that investment of settlement funds in nonhealth-related programs is appropriate because the settlement income is meant to replace funds that would have been spent on nonhealth-related programs but had to be diverted to health programs to treat tobacco-related illness; in fact, tobacco-related illnesses represent more than a financial drain on state budgets, because state citizens suffer directly from the effects of tobacco use on their health, economic, and functional status.

CHEST Foundation president Diane Stover, MD, says there will be 170,000 people diagnosed with lung cancer this year and that 92% will die of it. Lung cancer is becoming more of a woman’s disease, she says, with more women dying from lung cancer than from breast cancer. Direct medical costs for all lung cancer patients are estimated at $80 billion annually, with an additional $58 billion going to indirect costs.

Ms. Stover explains that with 87% of all lung cancers related to smoking and more than 50% of those now diagnosed with the disease indicating they are former smokers, there is a great need for prevention activities. Prevention should be targeted first, she says, to preventing children and adults from starting to smoke, then to smoking-cessation efforts, and finally to research on drugs that can prevent problems in high-risk people.

"We hope that by presenting our analysis of the New England Journal of Medicine data to states, they will see the need to bring more money to the prevention and control programs, where it should be," she adds. "We need to put more money into taking the stigma away from smoking and emphasizing that smoking and nicotine addiction are chronic life-threatening diseases."

Cancer Care executive director Diane Blum reports that Pennsylvania spends the least — 10 cents per capita per year — on control programs, even though its citizens have one of the highest smoking rates. States with the highest spending on control are Hawaii, Maine, Massachusetts, Mississippi, and Vermont. "We’re urging the states to make a commitment to use the settlement money for prevention and treatment," she says. "When funds are invested in smoking control, the rate of return far exceeds that received when funds go to other health programs."

[To download information on the study, go to: Contact Mr. Bach, Ms. Stover, and Ms. Blum through Michelle Tuohey or Amanda Hutchison at Spectrum Science Public Relations. Telephone: (202) 955-6222.]