A recent article on the Harvard Business Review's blog surmised that one way to control rising healthcare costs would be to shift the burden to some of the root causes of sickness – in this particular case cigarettes and sugar.
The article was penned by a Dartmouth business professor and a consultant from an analytics firm who note that the Center for Disease Control and Prevention (CDC) estimated the resulting costs from smoking-related medical expenses and productivity loss work out to about $167 billion a year. That works out to 50 cents a cigarette, or about $10 a pack according to the authors. They also note the CDC puts the cost of diabetes-related medical costs and loss of work at about $174 billion a year, which they work out to about $8 per pound of sugar consumed by Americans every year. (The current wholesale sugar price is about 40 cents a pound.)
The authors suggest that rather than subsidizing these products, we pass those resulting costs on to the consumers. They suggest that $25-a-pack for cigarettes and $10-a-pound for sugar would cover not just healthcare costs, but also costs for re-training folks who work in those industries and programming for users who would like to curb their habits.
The authors suggest that creating disincentives for bad habits and encouraging healthy lifestyles will remold the healthcare industry into something not only more affordable, but healthier for all of us.
What do you think? I'm sure there are plenty of smokers out there who would rather not see the price of a pack of smokes go up any more than it already has and soda junkies that would prefer to not pay Starbucks-like prices for a can of coke. But if we can look past our own pockets for a moment and consider the greater good – should we all bear the costs of our own bad habits?
I realize these are just two examples and there are plenty more vices that this math could apply to – alcohol, processed foods, trans fats, etc. It would be unfair to penalize one vice and leave the others unshackled. What's the answer?
Tell us what you think in the comments. You can read more about the issue here.