Data on morbidity are obtained from the Global Burden of Disease Study (table 6). Chronic respiratory diseases, ischemic heart disease, and tuberculosis are among the most prevalent diseases among men and women in South Africa. In 2015, approximately 1.3 million cases of tobacco-related disease were reported.

# **Tobacco-related medical costs**

The most recent study that analyzes the medical costs of tobacco consumption in South Africa occurred in 1988. Yach, McIntyre, and Saloojee (1992) estimate the cost of smoking-related diseases at R 3.64 billion (US$1.3 billion in 2015 prices), equivalent to 1.82 percent of GDP. The cost of health care and lost productivity because of admission to hospital and premature mortality the cost was estimated at between R 1.39 million and R 2.45 million in 1988. Even though these estimates are specific to tobacco-related illnesses, they are far too outdated to represent the current reality in South Africa and cannot be used in the analysis.

Another option is to use cost data from private hospitals in South Africa. To the best of our knowledge, there are no recent studies that have estimated tobacco-related costs in South Africa for the public sector or administrative data that would allow for these estimations. While a middle income country, South Africa’s health system is associated with higher private health spending (51.8 percent) than most high income countries of the Organisation for Economic Co-operation and Development; yet, only 17 percent of the population can afford private insurance.<sup>24</sup> Lorenzoni and Roubal (2016) estimate the average price of 28 case types using data from private hospitals from several large medical schemes in South Africa in 2011–13.<sup>25</sup> Of these 28 case types, four may be categorized as tobacco-related: heart failure, malignant neoplasm of bronchus and lung, pneumonia, and acute myocardial infarction, and, for two, we also have information on the number of cases in 2015: bronchus and lung cancer and ischemic heart disease (table 7).<sup>26</sup> Nonetheless, using only private sector information for two tobacco-related diseases provides severe underestimates of the effects on reduced medical expenses. To mitigate some of these limitations, the analysis could be complemented by using medical costs from countries with a health system similar to South Africa’s health system. However, few countries have available medical cost information for tobacco-related diseases.

An alternative is to use the aggregate cost estimates of Goodchild, Nargis, and Tursan d’Espaignet (2018), who apply a cost-of-illness approach to estimate the economic cost of smoking-attributable diseases in 152 countries in 2012.<sup>27</sup> For the purpose of this study, we limit this to direct health care expenditures and exclude indirect

> 24 As of 2017, government expenditures on health amounted to R 170.9 billion (8.8 percent of GDP) or US$1.2 billion. Public expenditure on health rose from 3.4 percent of GDP in 1995 to 4.2 percent in 2014, similar to private expenditures on health (4.6 percent of GDP). Moreover, 48.2 percent of health expenditure in South Africa comes from public funds. Out-of-pocket health expenditure has been decreasing over the years and was at 6.5 percent of total health expenditure in 2014. See WDI (World Development Indicators) (database), World Bank, Washington, DC, http://data.worldbank.org/products/wdi.

> 25 “‘Case type’ refers to categories of hospital services that are similar from a clinical perspective and in terms of their consumption of resources. . . . The term ‘price’ relates to the amount paid to health care providers from risk pools, savings accounts, and out-of-pocket rather than the amount claimed. Payments to all private provider types are included” (Lorenzoni and Roubal 2016, 12).

> 26 Ischemic heart disease is also referred to as coronary artery disease or coronary heart disease. It occurs if arteries are narrowed and increases the chances of heart failure (Cleland and McGowan 1999). Myocardial infarction is one of the manifestations of ischemic heart disease; the cost of myocardial infarction is thus used for ischemic heart disease (Manfroi et al. 2002).

27 Goodchild, Nargis, and Tursan d’Espaignet (2018) group countries according to the country income status classification of the World Bank and the World Health Organization region. The World Bank classifies South Africa as an upper-middleincome country. See “South Africa,” World Bank, Washington, DC, https://data.worldbank.org/country/south-africa.

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