Health Economic Modeling for Policy Simulation

Abstract Economic models are powerful tools for simulating the long-term return on investment of policy interventions, making them ideal for examining both health outcomes and costs over extended periods. In this workshop, we will present a case study of policy simulation using the example of a menthol cigarette ban. Menthol cigarette use is associated with higher nicotine dependence and lower quit rates, particularly among females and ethnic minority groups. Several countries, including Canada, have already implemented bans on menthol cigarettes. Using a simulation model, we will demonstrate how the long-term impacts of such a ban can be evaluated, explicitly linking changes in smoking prevalence to later-life health outcomes and health system costs. Participants will be exposed to methods for modeling a simulated population cohort, defined by current smoking status, and project individual transitions across smoking-related health states (e.g., current smoker, recent quitter, long-term quitter) over a lifetime horizon. We will model major health events with high smoking-attributable risk, including cardiovascular and cerebrovascular diseases, lung cancer and other cancers, respiratory diseases like COPD, and other smoking-related conditions. Based on disease events, we will estimate lifetime health outcomes and associated health system costs from a policy-focused, decision-maker perspective, comparing the incremental costs and benefits of a menthol ban to current practice. Finally, we will demonstrate how stratified analyses can reveal differences in policy impact across subgroups.