The Costs of Poor Health Habits

Poor health habits (drinking, smoking, lack of exercise) obviously take their toll on individuals and their families. The costs to society are less obvious but certainly more far-reaching. This investigation is the first to quantify the financial burden these detrimental habits place on American taxpayers. Willard Manning and his colleagues measure the direct costs of poor health habits (fire damage, motor vehicle accidents, legal fees), as well as collectively financed costs (medical care, employee sick leave, group health and life insurance, nursing home care, retirement pensions, liability insurance). Consider two co-workers covered by their employer's health plan: both pay the same premium, yet if one drinks heavily, the other--through their mutual insurance program--involuntarily funds the resulting health problems.

After laying out their conceptual framework, methods, and analytical approach, the authors describe precisely how and to what extent drinking, smoking, and lack of exercise are currently subsidized, and make recommendations for reducing or reallocating the expense. They present, for example, a persuasive case for raising excise taxes on alcohol. The authors correlate their data to make costs comparable, to avoid double counting, and to determine the exact costs of each of these poor health habits and some of their findings are quite surprising.

This unique study will be indispensable to public health policy specialists and researchers, as well as to health economists.

Joseph P. Newhouse is the John D. MacArthur Professor of Health Policy and Management, Harvard University.

Imagine a book written by economists that is technically sophisticated, packed with interesting data, and concerned with a topic that is of great interest to policy makers as well as individuals interested in improving their health. The Costs of Poor Health Habits satisfies this bill. This work is a carefully executed, economically based, large scale empirical study of the costs, especially external costs, of smoking, drinking, and a sedentary lifestyle...As might be expected of any large, important study on a controversial topic, this book has already generated interesting debate...This book will continue to attract much attention and generate controversy, and deservedly so as it is a major work in this area. In addition, it is well written, carefully executed, and technically sophisticated, yet accessible to a broad audience.