Study: Smoking Cessation Programs Cost-Effective for Health Insurers

A new study finds that covering smoking-cessation treatment is highly cost-effective for health insurers because it adds an average of 7.1 years to a health plan enrollee’s life expectancy, Medscape reported June 7.

Managed care organizations (MCOs) have been slow to offer smoking-cessation programs because of the expense involved. But the study by the University of Michigan School of Public Health in Ann Arbor, Mich., found that the cost in relation to a health plan’s total expenditures is minimal.

“Managed-care organizations ought to be covering smoking-cessation programs,” said study lead author Kenneth Warner, Ph.D., professor of public health at the university. “It is a highly cost-effective intervention and saves more life-years per dollar than virtually anything else they do. There are many MCOs that do not provide coverage or thorough coverage because they are concerned about the financial implications.”

The study’s findings were based on data from more than 500,000 members enrolled in three large MCOs. Researchers used the information to simulate the financial impact of smoking cessation treatment in a hypothetical MCO.

With the hypothetical MCO, the researchers compared the cost-effectiveness of offering and not offering smoking cessation programs. The results showed that during the first five years of coverage, 54,488 enrollees in the hypothetical MCO would have used the covered smoking cessation programs, resulting in 4,892 more members who quit smoking than would have done so without coverage. Over 30 years, 337,010 enrollees would use the services and 19,881 would quit as a result.

In terms of cost, the simulated MCO incurred $15.5 million in expenditures for running a smoking cessation program in the first five years, or an average cost of $0.63 per member per month. Over 30 years, program expenditures totaled $36.8 million, or $0.55 per member per month.

However, total medical care expenditures within the MCO declined by $0.5 million in the first five years and by $7.5 million over 30 years.

“Part of my concern in public health is that much of what we do in the healthcare service delivery arena is far less cost-effective than what we don’t do. This is a wonderful example of that,” said Warner.