Methods: We use the medical conditions cited by the 2006 Surgeon General's report as causally related to exposure to SHS. Based on the population attributable risk for these conditions, we calculate the number of episodes of illness (using Episode Treatment Groups) attributable to exposure to SHS. We use Blue Cross and Blue Shield of Minnesota (Blue Cross) claims data to calculate the treated prevalence of and costs to treat these conditions.

We apply the treated prevalence ratios to the remainder of the State's population groups – including Private Insurance, Medicaid, Military, and the uninsured – adjusting for the age and gender composition of these different groups. Because Blue Cross does not cover a representative selection of the State's population, we also adjust the per-episode treatment costs for insurance status using the Medical Expenditure Panel Survey.

Results: For calendar year 2003, the cost of treatment for conditions for which the 2006 Surgeon General's report found that there was sufficient evidence to conclude a causal link with SHS exposure was $215.7 million, adjusted to 2006 dollars. For additional conditions with a suggestive association with SHS exposure, we calculate a total of $280.6 million in medical treatment costs. In addition, 581 Minnestoans died of sufficiently related conditions and 309 of suggestively related conditions.

Conclusions: These medical cost results should reframe the economic debate for policymakers interested in legislation to restrict smoking in public places, including restaurants and bars.