Can Regulation Of Tobacco Affect Health Care Costs Economics Essay

Can Regulation Of Tobacco Affect Health Care Costs Economics Essay The economic calculations associated with tobacco use are very complicated. For every savings, there are increased costs in other areas. Many productivity costs are subjective, while things like tax revenues are very definitive. These costs can be absorbed by various entities; public, private, and governmental. The tobacco industry has been viewed as the root of many of these costs. This industry has historically been exempt from oversight by any governmental agency, other than taxation. The Food and Drug Administration (FDA) has recently taken charge of overseeing and regulating many tobacco products, including cigarettes. Can the new regulations have any effect on health care costs? Why is tobacco use such a big deal? According to the World Health Organization (WHO), tobacco is the second major cause of death in the world, responsible for one in ten adults and the fourth most common risk factor for disease worldwide (2010). Costs (both public and private) associated with health ca re related to tobacco are astronomical. Productivity is reduced or lost when people are at their prime due to tobacco use. â€Å"A 1994 report estimated that the use of tobacco resulted in an annual global net loss of US$ 200 thousand million, a third of this loss being in developing countries† (World Health, 2010). This paper will look at the costs associated with tobacco use in the United States and the relationship regulation may have on reducing these costs. Compared to the length of time tobacco has been used, the health effects of its use are just recently becoming understood by the general public. Prior to this knowledge, the tobacco companies were free to advertise without any regulation. 1789 saw the first tobacco advertisement in the U.S for snuff. Communication, transportation, and manufacturing constraints of the time prevented any major branding and marketing successes. â€Å"The first strong national tobacco brand didn’t emerge until near the end of the Civil War, when both Union and Confederate soldiers in Durham, North Carolina raided a local farmer’s tobacco crop while waiting for a surrender to be completed. After the war was over, these soldiers began writing to the farmer, Mr. John Green, requesting more; Green went on to establish the successful Bull Durham Tobacco Company.† (Collins & Lapsley, 2010) The cigarette machine was one of the two major innovations that changed the industry and embedded tobacco into the minds of Americans. It was introduced in the 1880s and allowed companies to go from producing 40,000 hand-rolled cigarettes a day to over 4 million. The other major innovation came in the form of advertising. The color lithograph revolutionized advertising and packaging. These factors allowed companies to brand their products, searing them into the fabric of everyday life. Promotions, such as trading cards, were packaged with cigarettes and became collector’s items. World War II came and went wit h millions of soldiers and sailors addicted to nicotine courtesy of free cigarettes issued along with meals. Marketing remained pretty much unregulated throughout the 1950s. Advertisements promoted how healthy it was to smoke and how doctors (whom the public trusted) recommend one brand over another. Sponsorship of television shows, like The Flintstones and Gunsmoke, propelled cigarette smoking into a normal and expected part of life. â€Å"For tobacco companies, it was the Golden Age: cigarette ads featured endorsements from dentists, doctors, babies and even Yankees slugger Mickey Mantle† (Collins & Lapsley, 2010).