SICK SMOKERS COST U.S. $73 BILLION PER YEAR - STUDY

SAN FRANCISCO (Reuters) - It costs almost $73 billion
per year to treat U.S. smokers for medical problems caused by
cigarettes -- a figure which dwarfs proposed settlements with the
tobacco industry, according to a study released Wednesday.

Health economists at the University of California went through
published figures for all public and private health care spending and
determined that cigarette smoking accounted for about 11.8 percent of
total U.S. medical expenditures in 1993, totaling $72.7 billion.

``This is higher than was estimated in the past, and we think that we
have used better data, and better modeling to come up with these
higher costs,'' said report co-author Dorothy Rice of the Institute
for Health and Aging at the University of California-San Francisco.

The new research, published in the September issue of Public Health
Reports, indicates that smoking-related illnesses cost the United
States far more than just the estimated $12.9 billion spent in 1993 by
Medicaid, the state-federal health care program for the poor.

It also estimates a far higher total cost than the $50 billion
projected by an earlier research study, a difference Rice and her
colleagues attributed to more precise statistical analysis.

According to official figures, roughly 23 percent of Americans smoke,
ranging from a high of more than 30 percent of Kentucky adults to a
low of 16 percent of adults in Utah.

The report analyzed health care data for each of the 50 U.S. states
and found that California spent the most money treating its smokers
with health care costs reaching about $9 billion, including about $1.7
billion in Medicaid payments.

New York followed with $6.6 billion in medical costs, while Wyoming
spent the least at just $80 million per year.

Taken as a whole, however, the costs of treating sick U.S. cigarette
smokers over a number of years are far larger than the proposed -- and
aborted -- $368.5 billion settlement the states' attorneys general
negotiated last year in a deal with the tobacco industry.

That agreement, originally intended to compensate states for their
smoking-related Medicaid costs, was widely criticized by health groups
and politicians who felt it was too lenient on the tobacco companies,
and eventually fell apart after Congress refused to back it.

Now, new dealings are underway between a number of states and
representatives of the tobacco companies. So far, Mississippi,
Florida, Texas and Minnesota have reached such deals worth a total of
$36 billion.

But Rice said the new research indicated the states might not be
asking for enough.

``Most of the states have just been suing the tobacco industry to
recoup the Medicaid costs,'' Rice said. ``Having the total picture
really indicates that there are additional costs to Medicaid that have
not been accounted for.''

Minnesota, for example, this month took the first payment of a record
$6.17 billion settlement with the tobacco companies. But Rice's report
shows that Minnesota spends a total of about $1.2 billion per year
treating sick cigarette smokers -- meaning the tobacco pay-off will
run out long before the state's supply of sick smokers.

``My feeling is that we really must strive to be a smoke-free society
in order to hold down our costs,'' Rice said. ''We must convince our
children not to take up smoking, not to become addicted...and thereby
not be subject to the health hazards associated with smoking.''

Checked-by: Patrick Henry