Smoking May Be Hazardous to Your Bottom Line

By Bruce Fitch

Dec. 6, 2007

By now, most people in the U.S. seem to understand the basic facts of tobacco use: hacking, wheezing, coughing. Secondhand smoke: the gift that keeps on giving. Sick days. The clinging odor. The wasted money at nearly $5 per pack. And, of course, lung cancer, emphysema and early death. Not to mention addiction and the ills that come with it. It’s not a pretty picture.

    But is any of this an employer’s problem? Should employer-paid health insurance cover smoking cessation programs the way it would a medical procedure?

    The numbers show that a comprehensive and effective smoking cessation program will usually cost less than 50 cents per member per month—less than $6 per member per year. Compare that with an estimated $210 annual reduction in health costs for each smoker who quits. Put simply, smoking cessation programs are inexpensive and produce short-term and long-term benefits for their participants and nearly immediate value for employers.

    The value is derived from an analysis of just four conditions cited in a Surgeon General’s report:

  • Coronary heart disease (CHD) and stroke

  • Adult pneumonia

  • Low-birth-weight babies

  • Childhood respiratory diseases including asthma, pneumonia, bronchitis and otitis media (middle-ear infection)

    These four conditions, among the many illnesses that are more often found among smokers, contribute to the higher medical costs that smokers typically sustain. Each is also a relatively short-term effect of smoking compared with cancer. The excess risk for childhood respiratory conditions from exposure to secondhand smoke in a household ends shortly after a parent quits smoking. The excess risk for stroke starts declining almost immediately after quitting, but takes five to 15 years to completely disappear after a smoker quits.

    If the positive effects of quitting vary widely by condition, all four conditions demonstrate that there are significantly higher costs associated with smokers as compared with other groups. In chart after chart comparing smokers, ex-smokers and never-smokers, the risks confronting smokers dwarf those of ex-smokers and never-smokers. Consider these implications:

  • Smokers have a significantly higher likelihood of suffering a stroke or developing coronary heart disease. In the year of such an event, annual medical costs are around $65,000. The next two years cost another $30,000. The rate of death from coronary heart disease for current smokers is nearly twice that of never-smokers.

  • Pneumonia costs $3.85 per member per month among smokers. For ex-smokers in the third year after quitting, the number drops to $2.99. Never-smokers come in at a paltry 96 cents.

  • Low-birth-weight babies are much more common among mothers who continue to smoke during pregnancy. These births fall into one of two categories: moderate low birth weights of more than 2.5 kilograms (5.5 pounds), which cost an average of $18,000 (birth cost and the following six months) and severe low birth weights of less than 2.5 kilograms, which cost an average of $58,000 (for the same duration). The birth of a normal-weight newborn costs on average $6,000 to $8,000, including prenatal care.

  • Children from birth to 12 years of age have costs associated with respiratory infections, pneumonia and bronchial conditions, coming in at $1.85 per member per month if one or both of their parents smoke. If neither smokes, the cost is just 50 cents.

    So here is where that leaves us: We all know that smoking is bad for us, but quitting is difficult. For the young, an unrealistic sense of their own mortality can make kicking the habit a low priority. In fact, a big decrease in smoking takes place among 30- to 39-year-olds, suggesting that the approach of age 40 focuses the mind on the ills of smoking.

    But for workers who are middle-aged and older, a lifetime of smoking is tantamount to a lifetime of never learning how to live without tobacco. Medical evidence shows that smoking cessation programs have the best chance of working when the following elements are present:

    Temporary pharmaceutical support, including nicotine replacement therapy and the anti-depressant bupropion

    Supportive services such as telephone quit-lines, advice sessions and individual or group therapy sessions

    We looked at six models of smoking cessation programs, which varied by pharmaceutical and support service components, and ranked them on overall intensity, cost and effectiveness. The “very high” category of support includes eight weeks of nicotine replacement therapy and bupropion, for example, along with 12 individual/group therapy sessions and more. The bare minimum quit-line option, at the opposite end of the spectrum, provides a self-help booklet and five telephone counseling sessions.

    Costs for these programs range from 2 cents up to 45 cents per member per month. The quit rates correlate with cost and intensity, with the more expensive and rigorous programs achieving better results. In addition, an employer can choose to promote the program, which may elevate program costs and but also markedly increases the uptake among employees.

    Even in our very conservative assessment, successful smoking cessation programs almost pay for themselves because they minimize other health care costs—and we didn’t consider the costs in extra sick time. The cost of providing even a gold-plated program—45 cents per member per month—can easily be offset by paring down other program benefits. Removing chiropractic benefits could save $1.35 to $4 per member per month. Increasing use of generic prescription drugs by 10 percent would save $2.65 to $3.05 per member per month. Reducing the number of covered inpatient days even modestly—five days per 1,000 members per year—can produce savings of 90 cents to $2 per member per month.

    If you look at smoking from the perspective of health benefits, it carries all the characteristics of a disease. “Curing” smoking can reverse many of the risks associated with this disease and reduce the associated costs.

    The bottom line, in short, is that it’s very difficult for most people to quit smoking, but employers who help their employees quit bring real value and contribute tangibly to a more stable, productive and profitable workforce. Ex-smokers save a lot of money too—and not just on cigarettes. They also enjoy an enhanced quality of life for themselves and their families.

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