Sunday, January 11, 2009

The price of cigarettes and the cost of saving a smokers life

New England Journal of Medicine published a study after following 30,000 smokers for 12 years.

484 suspected cancers were found.

375 patients opted for surgery.

92 percent lived 10 years or more.

Lung cancer is generally aggressive with extremely low survival rates because it moves so quickly.

The question is - what would it cost to save a smoker ? If a CT scan costs $500, in this study it would have cost $500K for each life saved. We realize that every life is priceless and precious. But let's suspend that theory for a second and talk about pure economics. The economic value of an American is approx. $40K per year (per capita GDP). Over 15-16 years this cost would be paid back so its beneficial to the US to do this.

However since lung cancer is mostly "self-inflicted" with 90 percent deaths to smokers, let's presume we have to recover this cost through a "scan tax". For an annual scan of $500, and assuming an individual consumes 20 cigarettes a day, that works out to 6 cents per cigarette in tax, or an additional $1.36.

This analysis doesn't take into account the complications of radiation.

There are some other interesting lung cancer tests coming that could stratify who should be scanned.

But price-wise, I don't see why smokers won't be willing to pay less than a buck fifty to smoke while vastly improving their chances of survival.
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