Tobacco companies have paid the government a lot of money to reimburse
them for the cost of treating tobacco-related illnesses
(http://www.cbpp.org/tobacco-2.htm , http://www.cbpp.org/tobacco.htm ,
http://health.yahoo.com/health/cancer_center/acs_stats/tobacco_use/costs_of_tobacco.html
and so on )

However, some people have argued that smoking-related deaths on
average save the government money, since people who died of such
deaths will die eventually anyway, and whatever they die of eventually
will be paid for by the government.

Indeed, some illnesses may cost much less to treat than some
tobacco-related illnesses.

An example of this is:
http://www.independent.org/tii/news/000623Krauss.html "Virtually every
serious expert who has studied the costs of smoking has concluded
that, while it is dangerous to smokers, it causes no loss to the
federal government."

I want to know when and where the legal argument was bought up, i.e.
in what brief, and exactly what evidence was adduced, that
tobacco-related illnesses save money. Furthermore, I'd like to know
why this argument was actually rejected by the courts.

I'm interested in things like on-line legal opinions and briefs, and
on-line definitive studies and counter-arguments to them.

I'm obviously not at all interested in journalistic summaries of the
kind I mentioned above from the Washington Times.

The dream answer would have some online long document submitted by a
tobacco company claiming that the suit should be dismissed because
tobacco deaths save the government money; with a lot of statistics and
references to back it up; followed by the government's counterbrief
with its own statistics and references; followed by the judge's
decision as to which was right.

---

Clarification of Question by rbnn-ga on 26 Jul 2002 09:20 PDT

Hi,
dr_lap-ga I looked at your link at found it useful.

These comments do seem like good starts.

The main remaining parts of the question to answer are 
(1) 
 Viscusi claims medicare/medicaid costs due to smoking are less than
they would be otherwise.

 But then: why did the tobacco industry distance itself from that
conclusion? Who disagrees with the conclusion and why?

Now I did see some specific criticism of *other* claims by Vincusi,
such as about youth smoking and so on. But I didn't see any
explanation of why the specific claim on medicare/medicaid is untrue.
That is, Vincusi is often called controversial, and there are
allusions to people who disagree with the cost assessment, but where
is the argument against the cost assessment, the argument that is so
compelling that it would cause tobacco industry to distance itself
from Vincusi's conclusion?

gwagner-ga: perhaps the law review article has answers to some of
these questions, but I don't really have access to it nor enough
detail to know if its worth paying for access.

(2) It's unfortunate though that *online* there isn't enough evidence
to support or to refute Vincusi's conclusion on Medicare/Medicaid
costs, except possibly for the law review article, which is access
restricted so I haven't seen it. All that is there is various
references to the studies themselves. The Chronicle of Higher
Education articles are just summaries of claims and aren't of course
sufficient to evaluate correctness of arguments.

There is a reference here that may be of use:

http://www.universitystar.com/96/06/19/061996o4.html

An excerpt:

"...a second, more radical study that was done by W. Kip Viscosi,
professor of Economics at Duke University. Viscosi looked at the issue
from a side that most people are unwilling to look at - early deaths
from smoking related causes actually save money in the long run."

My cursory search did not turn up the above-mentioned study by Dr.
Viscosi, but a more thorough investigation might be worthwhile.

Hi rbnn & pinkfreud,

I believe the prof pinkfreud was referring to is W. Kip Viscusi
(rather than Viscosi, as cited in that link), and he's now at Harvard
Law School. Here's an article that should get you a bit farther in
your search:

Viscusi, W. Kip. "The Governmental Composition of the Insurance Costs
of Smoking." 42 Journal of Law and Economics 575 (1999).

The journal is online at
http://www.journals.uchicago.edu/JLE/home.html, but access to it is
restricted.

As others have commented above, Dr. Viscusi is the primary expert on
the net costs of smoking to the government, as well as research into
smoker's awareness of smoking risks.

A summary of Viscusi's views is available online from The Chronicle of
Higher Education: [ http://www.viewsandreviews.com/free/v48/i38/38a01401.htm
]
Briefly, his research finds that smokers cost the government less,
even factoring in tobacco-related illnesses, because they die young:

"More controversially still, Mr. Viscusi declares that state
governments enjoy a net fiscal gain from each pack of cigarettes sold,
even before excise taxes are taken into account. Because smokers tend
to die young, he argues, governments incur lower nursing-home and
health-care costs for smokers as a class. So the major state and
federal lawsuits against tobacco, which have sought reimbursement for
smokers' Medicaid expenses, are based on a false premise. According to
Mr. Viscusi, total Medicaid costs would actually be higher if there
were no cigarettes. (That analysis, which one of Mr. Viscusi's critics
calls "obscene," was initially disavowed by the tobacco industry
itself.)"

"In a 1995 study, however, Mr. Viscusi concluded that states bear no
net tobacco-related costs. True, smokers incur heavy health-care costs
while they're alive, but as a class, they more than make up for that
by dying relatively young. In _Smoke-Filled Rooms_, he estimates that
in 1995, the state of Mississippi (which was one of the most
aggressive in pursuing the Medicaid claim) enjoyed a fiscal benefit of
as much as 12.5 cents per pack sold, depending on how one adjusts for
the declining levels of tar in cigarettes."

The tobacco industry distanced itself from this result, and this
research was never presented in a court of law. From a live chat
sponsored by the Chronicle, Dr. Viscusi states: "...smokers pay their
own way in terms of the net financial costs to society. That study was
supported by the National Bureau of Economic Research, not the tobacco
industry. When it was released, a lead industry attorney distanced the
industry from both my methodology and conclusions and disavowed any
industry knowledge of my study."
[ http://www.viewsandreviews.com/colloquylive/2002/05/smoking/ ]

Also, because the tobacco industry settled the lawsuits brought by the
state attorneys general, there was never an ultimate ruling as far as
liability: "It's unfortunate, he argues, that the tobacco industry
settled the lawsuits brought by the state attorneys general, because
as a result, the states' legal theories were never tested in court."

Dr. Viscusi's work on the net costs to the government is available in
the book _Smoke Filled Rooms_ (1995). There is no corresponding reply
from the government, because these arguments were never presented in
court.