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Blog: The Business of Management
 

February 17th, 2009

What Does It Cost to Get Smokers to Quit?

Motivating workers to get healthy is a tricky business.

Anyone who manages people these days knows that there is a tremendous effort by a lot of organizations to get employees to take better care of themselves and ultimately save the company money through lowered health care costs.

No one has quite figured out the perfect approach to this, so businesses bounce from encouraging healthier practices by essentially bribing workers with a cash incentive, to taking a punitive approach by threatening to charge those who smoke, or even resorting to not hiring people who say they smoke.

This all raises a reasonable question: Just what does it cost to get workers to quit smoking and stay healthy, anyway?

And, here’s the answer, according to the New England Journal of Medicine and reported by the Associated Press—it costs $ 750, if you believe a study of workers conducted by General Electric since 2005.

“Among those paid up to $750 to quit and stay off cigarettes, 15 percent were still tobacco-free about a year later,” according to the AP story published in the Fort Worth Star Telegram. “That may not sound like much, but it’s three times the success rate of a comparison group that got no such bonuses. GE was so impressed that it plans to offer an incentive program nationwide next year, aiming to save some of the company’s estimated $50 million annually in extra health and other costs for employees who smoke.”

This all sounds good, but I wonder: Will financial incentives to help workers stop smoking or work harder to stay healthy be a line item that avoids getting whacked out of the budget during these tough times? Yes, you can point to a pretty nice ROI in the GE study, but how many organizations will really look at it that way and not just focus on the upfront dollars it takes to encourage the cost-saving behavior?

Our friends over at the Benefits Buzz blog made this very point recently when they penciled out the costs for corporate gym or health club memberships for employees based on a 2005 study that found most people who pay for gym memberships only work out there four—yes, four—times per month.

“Each attendee’s four trips per month to make a trip to the sauna and catch up on sitcoms as they gingerly touch the pedals of a recumbent bike is never, never, ever going to make a dent in your health care or absenteeism costs,” the blog post noted. “I don’t care what anyone else tells you.”

In my book, it’s worthwhile to pay smokers to quit because it ultimately will help the organization make a big dent in health care costs, as GE has found. My guess, however, is financial incentives like this one will face the budget knife in most companies this year.

It’s not that organizations don’t see the benefit in helping employees to get healthy. I think they do. But the issue for many will be a lack of focus on the long-term ROI when the more pressing issue is just keeping things going through this terribly difficult year.

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