1. Health Care System and Tobacco Epidemic
Ayda Yurekli,
Senior Economic Advisor,
Tobacco Free Initiative, WHO, Geneva

2. Outline The link between health system & tobacco epidemic
TA diseases
Who's burden is it anyway?
Should Serbia be worried about it?
Serbia's comprehensive on smoke-free legislation
Do smoke free policies hurt hospitality industry?
Price, and taxes on cigarettes.
Can Serbia do better?

3. Deaths caused by tobacco use, by diseases
Source: Mathers and Loncar, 2006

4. Developing countries Developed countries Total
Tobacco will kill 176 million people worldwide between 2005 and The developing world's share will increase from 70% in 2005 to 77% in 2030
Developing countries Developed countries Total
(71%) 1.6 (29%) 5.4
(74%) 25.7 (26%) 99.1
(77%) 40.7 (23%) 175.8
Source: Lopez et al 2005
Health Care System and Tobacco Epidemic

5. Who's burden is it anyway?
Smokers & their families
High opportunity costs of tobacco expenditures
Lost family income due to diseases and disability
Out of pocket expenditures for
Tobacco products &
Cure for diseases
Society
Cost for covering health care costs and production lost
Government
Development issue- strong link between health & development

6. High opportunity cost to Families Example from Serbia
On average Serbian daily smoker spend
35,804 Dinar / year on cigarettes.
Given 317,623 Dinar GDP/capita in 2007
Daily smokers spend 11.3% of their annual income on cigarettes

7. Double burden on non-smokers and families Health Risks and Medical Costs
Source: Donald F. Behan, Michael P. Eriksen and Yijia Lin March 31, 2005,

8. Double burden on non-smokers and families Economic Costs
Source: Donald F. Behan, Michael P. Eriksen and Yijia Lin March 31, 2005,

10. Costs to Society Taiwan Type of Cost Cost (Million) Excess Absenteeism
US$ 184
Sick leave due to ETS
US$
Occupational injuries among smokers
US$ 1,032
Scotland
Absenteeism
£ 40
Productivity loss
£405
Loss due to fires
£ 4
Sources: Tsai et al Tobacco Control 2005;14:33-37
Parrotta et al Tob Control 2000;9: ( Summer )

11. Should Serbia be worried about it?

12. Should Serbia be worried about it?

13. Should Serbia be worried about it?
NO, because
Serbia has been drafting a new law on Comprehensive Ban on Tobacco Smoking in (closed) public places to protect people from second hand smoke.
Smoke-free laws are popular & do not harm business
16 countries in the world are covered by comprehensive smoke-free comprehensive laws

14. Health Care System and Tobacco Epidemic
Political or economic argument? Do Smoke Free Policies Hurt Hospitality Industry?
There is no evidence of negative impact on sales or employment in restaurant, bars and hotels found in 22 peer- reviewed studies
negative effect found by TI sponsored not-peer reviewed studies
NY introduced the smoke-free law in July 2003.
In % increase in business receipts for restaurants and bars
10,600 new jobs -
Scollo M, Lal A, Hyland A, Glantz S. Review of the quality of studies on the economic effects of smoke-free policies on the hospitality industry. Tob Control 2003; 12:
New York City. The State of Smoke-Free New York City. A One-Year review, NY, March 2004.
Sources: Scollo , Lal, Hyland and Glantz. Tob Control 2003; 12:
March 2004 The State of Smoke-Free New York City. A One-Year review,
Health Care System and Tobacco Epidemic

15. New York Bar and Restaurant Tax Receipts Continued Increase since SFAA
Tax Receipts Collected
Source: New York city, 2008
Health Care System and Tobacco Epidemic

16. Health Care System and Tobacco Epidemic
Do Smoke Free Policies Hurt Hospitality Industry?
Evidence says NO
Sales rose after smoking banned in restaurants and bars in California
A total ban on smoking in public places and workplaces protects people from the dangers of second-hand smoke and helps convince smokers to quit
Research clearly shows that there is no safe level of exposure to second-hand smoke. Second-hand smoke increases the risk of coronary heart disease by 25–30% and the risk of lung cancer in non-smokers by 20–30%
Smoke-free environments help smokers who want to quit. Smoke-free policies in workplaces in several industrialized nations have reduced total tobacco consumption among workers by an average of 29%
Smoke-free public places also encourage families to make their homes smoke-free, which protects children and other family members from the dangers of second-hand smoke.
Public opinion surveys show that smoke-free legislation is extremely popular wherever it is enacted. In 2006, Uruguay became the first country in the Americas to go 100% smoke-free. The ban won support from eight out of ten Uruguayans. In California, 75% of the
population approve of smoke-free workplace laws that included restaurants and bars
In China, which has few smoke-free public places, more than 80% support a smoking ban in workplaces, and about half support banning smoking in restaurants and bars
The effectiveness of smoke-free laws is greatly weakened or completely eliminated when smoking is permitted in designated areas. The tobacco industry itself acknowledges the effectiveness of smoke-free environments, and always pushes for exceptions such as designated indoor smoking areas
Health Care System and Tobacco Epidemic 16

17. WHO FCTC –Article 8 Protect people from tobacco smoke
No safe level of second-hand smoke
Smoke-free environments protect
non-smokers health,
help smokers quit &
encourage smoke-free homes

18. Effect of smoke-free public places on smoking behavior at home
There is no evidence found that total ban on public places would increase smoking in the home
Evidence from UK show that total ban on public places has
A. Increased:
Smoke-free homes –22% to 37% between
B. Saved
£181m from prevention of fires and reduced cleaning costs, and
£2.8bn from improved productivity of staff no longer taking smoking breaks
Source: Adrian O’Dowd, BMJ  2005;331:129 (16 July)

19. WHO FCTC –Article 8 Protect people from tobacco smoke Practical Approach
Up to date, evidence show that there are no ventilation systems that prevent the exposure of SHS
Without substantial capacity, air cleaners will have little impact on SHS levels
Smoking area
Non
smoking
area
<<

20. Urinating
permitted
Urinating
Prohibited

21. 24-hour outdoor standard (.05 mg/m3)
Serbian people deserves Clean Air Quality same as New Yorkers New York: Impact of smoking environments on air quality
Ambient particulate matter, mg/m3
Before Smoke-Free Air Act (SFAA), Air Quality Was 50X Worse in Bars w/ Smoking than at the Holland Tunnel
Proposed EPA
24-hour outdoor standard (.05 mg/m3)
Source: New York city, 2008

22. Serbian people deserves Clean Air Quality same as New Yorkers New York: Air quality after smoking ban
Air Quality in Bars Improved Significantly Post-SFAA
Ambient particulate matter, mg/m3
Source: New York city, 2008

23. Bottom-Line with Comprehensive Smoke-Free Laws
Smoke free policies are cost effective on reducing smoking behavior and consumption:
WHO estimates that enforcement of smoke free policies would save one DALY for $358
(US guidelines consider an cessation intervention costing $2,587 or less per life-year gained as cost effective)
Many countries would likely to save from non-smoking legislation:
Evidence from:
Canada: $32.2 million, and
US: between $39 and $72 billion
Labour Canada's Regulatory Impact Analysis Statement. Prepared for the federal Non-smokers' Health Act. Ottawa, Minister of Supply and Services, Canada Gazette, 1989: 4540.
Envirnomental Protection Agency (EPA), 1994, The Costs and Benefits of Smoking Restrictions: An Assessment of the Smoke-Free Environment Act of 1993 (H.R. 3434). Indoor Air Division, Office of Radiation and Indoor Air, Washington.
Source: WHO-CHOICE. World Health Organization, 2002.
Health Care System and Tobacco Epidemic

24. Costs to Government via Health Care System Economic Burden of Tobacco use
Direct Costs from the treatment of illness directly attributed to tobacco usage accounted for
0.46 to 1.15 percent of gross domestic product (GDP) for United States
0.13 percent of GDP in the United Kingdom
0.12 to 0.56 percent of GDP in Canada.
0.43 percent of GDP in China
The social costs amount to 1.4% to 1.6% of GDP in the US; a similar estimate came from Canada. The China study showed that amount to be 1.7% of GDP (Jha and Chaloupka, 2000).
Social costs include costs due to indirect costs of morbidity and premature mortality, as well as direct medical costs.

25. Serbia should NOT be worried

26. Serbia should NOT be worried
Serbia is among number of countries that ensures sustainable financing for Tobacco Control
Earmarked 1 dinar per cigarette pack (annually harmonized with the rate of inflation) to fund tobacco control work,
including smoking prevention,
diagnostics and treatment of tobacco related diseases

27. Earmarking tobacco tax revenues for health: Examples
Egypt: 10 piaster's per 20 cigarettes for the students health insurance
Qatar: 2% of tobacco import revenues for health awareness activities and tobacco control activities
Thailand: 2% of tobacco tax revenues for the Thai Health Promotion Foundation
Nepal: 2 paisa/ stick on cigars and cigarettes for cancer care hospital
Republic of Korea: 626 Korean Won/pack for the national Health Promotion Fund
Mongolia: 2% of tobacco excise tax revenues for Prevention and Control for tobacco and alcohol
Finland: 0.45 % of tobacco tax revenue goes to health promotion and anti-tobacco activities
Iceland: 0.9% of gross tobacco sales for Public Health Institute
Switzerland: SFR per pack of cigarettes for tobacco control
Poland: 0,5% of the value of the tobacco excise tax for smoking cessation
Bulgaria: 1% of cigarette tax revenue for tobacco control and alcohol
Egypt since 1999, Qatar 2002, Thailand 2001, Nepal 1995, Republic of Korea 2003, Mongolia 2006, Finland 1995, Iceland 2003, Serbia 2005, Switzerland 2004, Poland 1995, Bulgaria 2005,
Health Care System and Tobacco Epidemic

28. Can Serbia do better. YES
Can Serbia do better? YES. Serbia has the lowest excise tax and average retail price in the region

29. Can Serbia do better. YES
Can Serbia do better? YES. Assuming other than tax and producer's price, there is no change in other factors including per capita income
21% increase in excise from
54.5% increase in excise from
Current
48 to 58 RSD
31 to 48 RSD 58 48 31
Excise Tax/pack
55%
47%
43.9%
Excise as % of RP
105 90
70.6
Price/pack (RSD)
RSD & ( percentage change from current level)
Price elasticity=-0.4
44.4 (+33%)
40.7 (+22%)
33.3
Revenue (Bill. RSD)
Price elasticity= -0.8
33.7 (+1%)
35.7 (+7%)

30. Conclusion
Serbia already moved forward with TC and showed its political commitment with strong TC measures.
Comprehensive smoke-free laws work and Serbians deserve clean air.
Comprehensive smoke-free laws DO NOT HARM hospitality sector.
Serbia has one of the lowest tax and price of cigarettes in the region and has room to increase its taxes to generate more revenues.