Results Smoking was associated with a greater mean annual healthcare cost of €1,600 per living individual during follow-up. However, due to a shorter lifespan of 8.6 years, smokers’ mean total healthcare costs during the entire study period were actually €4,700 lower than for non-smokers. For the same reason, each smoker missed 7.3 years (€126,850) of pension. Overall, smokers’ average net contribution to the public finance balance was €133,800 greater per individual compared with non-smokers.
But there is one way to show that there is a much greater 'cost' of smoking...
However, if each lost quality adjusted life year is considered to be worth €22,200, the net effect is reversed to be €70,200 (€71,600 when adjusted with propensity score) per individual in favour of non-smoking.
Yes, if you give a year of life an arbitrary value (why €22,200? Why not €2.2 million? Why not €22?), you can easily increase the 'cost'. That would be an intangible cost and they account for a large proportion of the final amount in many 'cost of smoking/drinking/eating' studies. It should be clear, however, that these are not real costs—ie. they are not monetary; nobody needs to pay them. And insofar as they are costs at all, they are costs to the individual who smokes/drinks/eats—ie. they are not externalities; they cannot be a 'burden' on society. Moreover, they are plainly not costs to the health service.
Therefore, the only effect of smoking on a society's healthcare costs is to lower them...
Conclusions Smoking was associated with a moderate decrease in healthcare costs, and a marked decrease in pension costs due to increased mortality.
The supposed healthcare costs of smoking/drinking/eating are the most commonly-cited justification for getting the government to tell people how to live. Look at the comments on the 'let's ration food' article I mentioned yesterday, for example. People will often say something along the lines of "I don't mind people smoking/drinking/eating themselves to death so long as I don't have to pay for their lifestyle choices".
I have lost count of the number of times I have explained to such people that the negative externalities they are referring to do not exist. Although they usually understand and accept the findings of studies such as the one above, they never change their mind about wanting to tell people how to live, which makes me think that perhaps their concern for healthcare costs was only ever an excuse in the first place.
I've written about this before in 'Is the nanny state caused by socialised healthcare?'