Evaluating the tobacco settlement damage awards: too much or not enough?
OBJECTIVE
This study compared the present economic value of the 1998 tobacco settlement with the present economic value of the damages attributable to tobacco.


METHODS
The 1987 National Medical Expenditure Survey was used to estimate the smoking attributable fraction (SAF) of medical expenditures. SAFs were then applied to Medicaid and other expenditures.


RESULTS
Settlement payments covered only 40% of Medicaid treatment costs already incurred and only 30% of past and projected future Medicaid costs. Excess medical expenditures for all other payment sources were roughly comparable to those incurred by Medicaid.


CONCLUSIONS
Although the settlement may reduce future smoking prevalence rates by limiting the ability of tobacco companies to promote smoking and by raising cigarette prices, euphoria over the huge settlement funds should be balanced by a sober comparison with the even larger damage amounts.
Coller
Maribeth
M
Moore School of Business, University of South Carolina, Columbia, 29208, USA.
Harrison
Glenn W
GW
McInnes
Melayne Morgan
MM
D017281:Cost of Illness; D017048:Health Care Costs / Q000706:statistics & numerical data / Q000639:trends; D005102:Health Expenditures / Q000706:statistics & numerical data*; D006801:Humans; D007348:Insurance, Health / Q000706:statistics & numerical data; D016365:Liability, Legal / Q000191:economics*; D008484:Medicaid / Q000706:statistics & numerical data*; D006278:Medicare / Q000706:statistics & numerical data; D012907:Smoking / Q000009:adverse effects / Q000191:economics*; D019460:Tobacco Industry / Q000191:economics / Q000331:legislation & jurisprudence*; D014028:Tobacco Smoke Pollution / Q000009:adverse effects / Q000191:economics; D014481:United States; D014942:Workers' Compensation / Q000706:statistics & numerical data
D014028:Tobacco Smoke Pollution