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<p><strong>You Are Here:</strong> <span class="crumb_link"><a href="/" class="crumb_link">AHRQ Archive Home</a> > <a href="/research/resarch.htm" class="crumb_link"><em>Research Activities</em> Archive</a> > <a href="." class="crumb_link">February 2007</a> > Employer-sponsored insurance coverage of smoking cessation treatments could save employers and insurers money</span></p>
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<td><h1><a name="h1" id="h1"></a>Health Care Utililization, Costs, and Financing</h1>
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<h2>Employer-sponsored insurance coverage of smoking cessation treatments could save employers and insurers money</h2>
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<p>Several interventions are known to improve smokers' ability to quit, including counseling, nicotine replacement therapies, and the medication bupropion. Insurance coverage of these interventions encourages their use and increases quit rates, but many employers and health insurance plans still do not cover smoking cessation treatments. According to a new study, both employers and insurers could begin to save money after several years if they added smoking cessation benefits, especially for a stable group of employees/enrollees.</p>
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<p>Harvard Medical School researcher Douglas E. Levy, Ph.D., calculated the cost benefit of covering smoking cessation interventions for a hypothetical group of nonelderly, privately insured adults over a 20-year period. He derived population characteristics from the 1997-2002 National Health Interview Surveys. Based on Medical Expenditure Panel Survey models, Dr. Levy calculated the cost savings of implementing the smoking cessation benefit itself. His calculations were based on the costs of the benefit per additional person who quit smoking and the marginal savings from reduced medical care expenditures. He also calculated employer's marginal savings from reduced smoking-related productivity losses and absenteeism.</p>
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<p>He estimated that, by the final simulation year, insurers had benefit-cost ratios of 0.56 to 1.67, with per member per month costs of -$0.22 to $0.43. The earliest year at which savings were achieved for insurers was year 8. Employers saw benefit-cost ratios of 1.88 to 5.58 by the final simulation year, with per member per month costs of -$1.23 to -$0.15. Employers achieved savings as early as year 3 and as late as year 8. Cost benefits were sensitive to the rate at which population members were assumed to exit the insurer or employer. The study was supported in part by the Agency for Healthcare Research and Quality (HS00020).</p>
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<p>More details are in "Employer-sponsored insurance coverage of smoking cessation treatments," by Douglas E. Levy, Ph.D., in the September 2006 <em>American Journal of Managed Care</em> 12(9), pp. 553-562.</p>
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