Policy Basics

Ohio Health Value Review– July 2017

November 3, 2017

July 2017

Welcome to the inaugural edition of Ohio Health Value Review

The Ohio Health Value Review is a quarterly electronic update from the Health Policy Institute of Ohio designed to strengthen connections between public health and healthcare partners in Ohio and highlight opportunities for different sectors to work together to improve health value in our state. If you have questions about the newsletter or have suggested tools or resources you would like to see included in future editions, please contact Nick Wiselogel, HPIO’s Vice President of Strategic Communications.

State budget a mixed bag for tobacco use reduction

The recently passed state budget provided mixed results for efforts to reduce tobacco use in Ohio, a key factor in the state’s low health value. Ohio ranks 46 out of 50 states and the District of Columbia on health value in HPIO’s 2017 Health Value Dashboard, a composite measure of population health outcomes and healthcare spending.

Gov. John Kasich’s original budget proposal called for an increase in the excise tax rate on cigarettes from $1.60 per pack to $2.25 per pack. The governor’s plan also called for an increase in the tax rate for tobacco products other than cigarettes from 17 percent to 69 percent of wholesale price and levied a 69 percent tax on sale or use of nicotine vapor products beginning in 2018. Those taxes were removed from the House-passed version of the bill and were left out of the Senate budget, so the state’s tobacco tax rates remains unchanged. In addition, the Senate added a 50-cent tax cap on premium cigars.

There is a strong body of evidence that increasing the unit price of tobacco products, including increased taxes on cigarettes, is one of the most effective strategies for reducing tobacco use. In fact, according to data from Campaign for Tobacco-Free Kids, all of the Midwestern states that had significant reductions in adult smoking from 2013 to 2015 — Illinois, Minnesota, Pennsylvania and Ohio — had state and/or local cigarette tax increases between 2012 and 2015.

Although the General Assembly declined to raise the tax rate on tobacco products, they did approve funding targeted at tobacco use prevention and cessation.

Kasich’s original budget plan called for $22.2 million over two years to be appropriated to the Department of Health for tobacco prevention and cessation programs. That figure was reduced to $11 million in the House version before being increased to $25 million in the final budget.

The prevention and cessation allocation funding in the budget is substantially more than what was allocated from 2009 to 2015, but is still much less than the historically high spending to combat tobacco use in the early 2000s (Ohio spent $54.8 million in combined state and federal dollars in 2005).

As HPIO staff members were preparing the 2017 Health Value Dashboard, they wanted to not only identify areas where Ohio does well and needs improvement, but also pinpoint what factors played the largest role in the state’s overall poor ranking.

Digging deeper into the numbers showed that tobacco use is one of the key factors contributing to Ohio’s poor performance. The state ranks in the bottom quartile for both adult smoking and secondhand smoke exposure for children. Analysis of Dashboard data found a strong correlation between a state’s adult smoking rate and its health value rank. In other words, states with higher health value rankings tend to have lower smoking rates (see figure below).

Tobacco use contributes to many of Ohio’s greatest health challenges, including cardiovascular disease, cancer and infant mortality. In addition, tobacco use is a cost driver for Medicaid and employers. Researchers estimate that 15 percent of U.S. Medicaid costs are attributable to cigarette smoking and a recent Indiana study found that per member per month (PMPM) Medicaid expenditures were 51.4 percent higher for smokers compared to non-smokers. Smoking also increases healthcare costs for employers.

Beyond increasing the cost of tobacco products, HPIO’s “State Policy Options to Reduce Tobacco Use and Secondhand Smoke Exposure” also identified evidence-based strategies such as media campaigns, access to cessation counseling and medication and quitline interventions as approaches that are effective at reducing tobacco use.

While the state’s investment in prevention and cessation funding will likely help to reduce tobacco use in Ohio, the legislature’s decision to not increase tobacco taxes is a missed opportunity to improve Ohio’s overall health value rank.

Health value graphic

As the graphic below shows, states with a lower adult smoking rate are more likely to have a better health value rank, meaning better population health outcomes and lower healthcare spending. The graphic is part of HPIO’s publication, “A Closer Look at Tobacco Use and Health Value.”

Health value tools

Population health and healthcare spending

Social and economic environment

Access to care

Healthcare system

Public health and prevention

Physical environment

Health equity 

State Health Improvement Plan (SHIP) priority topics

Mental health and addiction

Chronic disease

Maternal and infant health