Estimation of 1-Year Changes in Medicaid Expenditures Associated With Reducing Cigarette Smoking Prevalence by 1%

IMPORTANCE Reducing smoking is associated with a reduction in health care costs, including in the short run. Medicaid recipients smoke at higher rates than the general population, which suggests that investments to reduce smoking in this population would reduce short-run Medicaid costs. OBJECTIVE To estimate the short-run (1-year) change in health care expenditure associated with a 1% decrease in absolute smoking prevalence in all US states. DESIGN, SETTING, AND PARTICIPANTS Economic evaluation based on state Medicaid expenditures and the elasticity between changes in smoking prevalence and health care costs. Data sources were the 2017 Behavioral Risk Factors Surveillance System, 2017 National Health Interview Survey, and Kaiser Family Foundation Total Medicaid Spending for fiscal year 2017. Analysis was conducted in 2018. Participants were all people receiving Medicaid in all US states and the District of Columbia.


Introduction
In fiscal year 2017, total Medicaid costs were $577 billion. 1 It is widely accepted that reducing smoking is associated with a reduction in health care costs, but the implicit assumption has been that it takes years to see these savings. While this may be true for some diseases, notably cancer, other risks change quickly in response to changes in smoking behavior, including myocardial infarction, lung disease, and complications of pregnancy. Medicaid recipients smoke at higher rates than the general population; in 2017, 24.5% of adult Medicaid recipients (aged Ն18 years) smoked cigarettes compared with 14.0% of all adults, 2 suggesting that investments to reduce smoking in this population could be associated with a reduction in Medicaid costs in the short run. 3

Key Points
Question What

Methods
This article reports the results of a secondary data analysis using large deidentified data sets, which is not considered human subjects research and is therefore exempt from review according to the University of California, San Francisco, institutional review board. Reporting of the study followed the Consolidated Health Economic Evaluation Reporting Standards (CHEERS) reporting guideline. The analysis was conducted in 2018.

Study Population and Data Sources
Participants of the study were people receiving Medicaid in all US states and the District of Columbia.

Statistical Analysis
Adult Medicaid recipients smoke (defined as persons who had smoked Ն100 cigarettes during their lifetime and now smoked cigarettes either every day or some days) at higher rates than the general population. In addition, there are differences in cigarette smoking by Medicaid recipients across states as well as differences in Medicaid eligibility, benefits, and medical costs.
We used the NHIS to estimate the cigarette smoking prevalence among the general population and Medicaid recipients in each census region accounting for person-level weights (Table 1), then computed the ratio of these 2 prevalences (Table 1). We then multiplied the Behavioral Risk Factors Surveillance System prevalence estimates for each state ( Lightwood and Glantz 6 quantified short-run changes in health care costs the year after changes in smoking behavior and found that 1% relative reductions in current smoking prevalence and mean packs smoked per current smoker are associated with mean (SE) reductions of 0.118% (0.026%) and 0.108% (0.025%) in per capita health care expenditure (elasticities). For this analysis, we concentrate on changes in prevalence. (Given the similar elasticity for changes in consumption per  smoker, the results would be similar for changes in consumption per smoker. One could also estimate the effects of simultaneous changes in both variables by adding the effects of the 2 changes.) To apply the 0.118 elasticity between changes in cigarette smoking prevalence and changes in health care expenditures the following year, we need to compute the relative decrease in prevalence that corresponds to a 1% decrease in absolute prevalence in each state. Dividing the 1% absolute prevalence decrease by the estimated Medicaid prevalence (  Table 2 shows that reducing absolute smoking prevalence by 1% in each state was associated with substantial Medicaid savings the following year, totaling $2.6 billion (in 2017 dollars). The median (interquartile range) state savings was $25 million ($8 million to $35 million).

Discussion
The results of this study indicate that investments in policies to motivate and assist Medicaid recipients to stop smoking may yield substantial savings in short-term medical costs.
These estimates are based on cigarette smoking only, 6 and the use of noncigarette tobacco products is increasing. While 14.0% of adults were current cigarette smokers in 2017, 19.3% used some tobacco product. 2 To the extent that tobacco control programs are associated with reduced use of these other tobacco products, there could be additional savings. This analysis is focused on reductions in prevalence; reductions in consumption by continuing smokers may also be followed by reductions in health care costs. 6 Because some of the risks of smoking, such as cancer, emerge more slowly over time, these medical cost savings would likely grow with time.

Limitations
The fact that the NHIS data are only available by region but are applied to individual states introduces uncertainty, as different states have different age, racial, and sex distributions. Unfortunately, more granular data are not available. Many Medicaid recipients are children (and so their health costs are included in Table 2