The Financial Implications of Coverage of Smoking Cessation Treatment by Managed Care Organizations

Abstract

This paper presents results from a simulation of the financial impact and cost effectiveness of smoking cessation in a hypothetical managed care organization (MCO), using data from three large managed care organizations and from existing literature. With base-case assumptions and a market cost of capital, at five years, coverage of cessation services costs an MCO dollars .61 per member per month (PMPM). In a steady-state situation, net cost is dollars .41 PMPM. Both values include altered medical expenditures and MCO revenue patterns attributable to coverage-induced cessation. Quitters gain an average of 7.1 years of life, with a direct coverage cost of dollars 3,417 for each life-year saved. Coverage of cost-effective programs by MCOs should be strongly encouraged.

Effectiveness of pharmacist counseling combined with nicotine replacement therapy: a pragmatic randomized trial with 6,987 smokers

“…Reducing smoking prevalence requires both the use of effective smoking cessation strategies and strategies that reach large proportions of the population [2]. One approach is pharmacotherapy [e.g., nicotine replacement therapy (NRT)], which has demonstrated efficacy for smoking cessation in traditional randomized clinical trials [3][4][5].…”

Lessons from Cost-Effectiveness Research for United States Public Health Policy

“…We do not cover financial "business case" analyses that evaluate the short-term return on investment for an employer or health care plan (39,51). Because health benefits from prevention take years to accrue and other health care payers might benefit, prevention strategies that are cost effective to society, such as smoking cessation services, do not necessarily have a positive short-term financial return for payers (76,136).…”

Reimbursing Dentists for Smoking Cessation Treatment: Views From Dental Insurers

“…Thus, despite extensive data supporting the cost-effectiveness of tobacco use treatment, our interviews suggest that dental insurers do not view this data as relevant to the dental care setting ( Curry et al, 1998 ;Warner, 1998 ;Warner et al, 2004 ). These fi ndings support the need for well-designed trials to document the cost-effectiveness of these services in dental care settings.…”

“…Yet, numerous studies have demonstrated that treating tobacco use compares favorably with the cost of routinely reimbursed prevention and chronic disease interventions ( Curry, Grothaus, McAfee, & Pabiniak, 1998 ;Warner, 1998 ;Warner, Mendez, & Smith, 2004 ). Moreover, ROI calculations have demonstrated that tobacco dependence treatment provides a timely ROI for employers through savings in health care, increased productivity, reduced absenteeism, and reduced life insurance payouts ( Warner, 1998 ).…”