New Study Finds Positive Return on Investment if New York Invests in Quit Smoking Treatments

(September 14, 2010)

A new study released by the American Lung Association, and conducted by researchers at Penn State University, reveals that  helping smokers quit not only saves lives but offers economic benefits as well.  The study, titled Smoking Cessation: the Economic Benefits, provides a nationwide cost-benefit analysis that compares the costs to society of smoking with the economic benefits of states providing cessation (quit-smoking) coverage. The report finds that in New York, smoking costs the state more $20 billion annually in direct health care expenditures, workplace productivity losses and premature deaths.  It also finds that by providing smoking cessation treatments, the state could potentially save more than $58 million per year and earn a return of $1.34 on every dollar invested.

“This study clearly demonstrates that money invested in smoking cessation not only benefits public health, but is cost effective,” said Scott T. Santarella, President and CEO of the American Lung Association in New York. “Helping people quit smoking is not only the right thing to do; it’s the fiscally sound thing to do.”

 Key findings of the study for New York include:

* Smoking costs the state more than $20 billion annually including  more than $3.9 billion in lost productivity, $6.8 billion in premature death and $9.8 billion in direct medical expenditures.

*For every pack of cigarettes sold in New York, the cost in direct medical expenses and lost productivity totals more than $36 per pack (per pack losses in productivity $18.97 plus per pack losses for medical care expenditures $17.28)

*Comprehensive smoking cessation treatments could save the state $58 million per year.

*For every $1 spent on smoking cessation, New York could earn a return on its investment of $1.34


Santarella noted that in the American Lung Association’s 2009 State of Tobacco Control Report released in January gave New York earned an “F” when it came to covering smoking cessation treatments.

“We know that coverage for smoking cessation treatment in New York could be vastly improved,” said Santarella.  “Now is the time for the state to act by providing comprehensive cessation benefits to New Yorkers so we can reduce the terrible toll from smoking and save dollars that will benefit all New Yorkers.  We hope this compelling study will give state policymakers the data they need to close the loopholes that New Yorkers currently face regarding cessation coverage.”

The Lung Association is advocating for comprehensive cessation coverage. A comprehensive cessation benefit includes all seven medications and three types of counseling recommended by the U.S. Public Health Service for tobacco cessation.  

The study notes that some of the highest rates of smoking are found among people enrolled in Medicaid, the joint federal and state health program for low-income people.  In New York, Medicaid coverage for the seven recommended smoking cessation medications varies by plan and only pregnant women on Medicaid receive individual counseling, a key component of comprehensive coverage.  At present, only six states now provide comprehensive coverage for Medicaid recipients: Indiana, Massachusetts, Minnesota, Nevada, Oregon and Pennsylvania.

When it comes to private insurance plans and employers, New York state has no requirement that cessation coverage be offered. Seven states, Colorado, Maryland, New Jersey, New Mexico, North Dakota, Oregon and Rhode Island, require private insurance plans and employers offer comprehensive cessation coverage. 

For New York state employees, coverage for medications and counseling varies by plan as do barriers to coverage. At present, five states provide comprehensive coverage for state employees:  Illinois, Maine, Nevada, North Dakota and New Mexico.

“New York State has an opportunity to save residents’ lives by passing legislation that gives them the coverage they need and deserve,” said Santarella.  “New York should begin its move toward comprehensive cessation coverage by offering the benefit to all Medicaid recipients and state employees.  Ultimately all private plans should be required to cover tobacco cessation.  With 25,000 New Yorkers dying every year as a result of smoking, we need this coverage in place now so we can help people quit this deadly addiction.”

The study comes at an important time, as important cessation benefit provisions are being implemented at the federal and state levels as a result of healthcare reform legislation.

 The study derives these economic benefits by considering lower medical costs due to fewer people smoking, increased productivity in the workplace and reduced absenteeism and premature death due to smoking.

About the Study
Researchers at Penn State University with expertise in health economics and administration performed this cost-benefit analysis using government and other published data.  The analysis compares the costs of providing smoking cessation treatments (including price of medications and counseling and lost tax revenue) to the savings possible if smokers quit (including savings in health care expenditures, premature death costs, and productivity losses).

Funding for the study was provided through an unrestricted research grant from Pfizer Inc.

 

About the American Lung Association in New York
Now in its second century, the American Lung Association in New York is the leading statewide organization working to save lives by improving lung health and preventing lung disease. With your generous support, the American Lung Association is "Fighting for Air" through research, education and advocacy. For more information about the American Lung Association, or to support our work, call 1-800-LUNG-USA (1-800-586-4872) or visit www.alany.org.