Health Care Cost

Paying for tobacco cessation is the single most cost-effective health insurance benefit an employer can provide adult employees.1

Tobacco use is the #1 cause of preventable death and disease in the U.S. and is responsible for over 440,000 deaths annually. An estimated 44.5 million adults in the U.S. smoke cigarettes and more than 8.6 million currently suffer from at least one serious illness caused by smoking.2 Some 53,000 nonsmokers die each year from secondhand smoke – 3,000 of them from lung cancer.3

  • According to the Centers for Disease Control and Prevention, an estimated $2.06 for every one of the 24 million packs of cigarettes sold was spent on smoking-related medical care in 1993.4
  • It is estimated that Medicare will spend $800 billion over the next 20 years caring for people with smoking-related illnesses.5
  • Smokers have higher medical costs than non-smokers - an estimated $2,530 more per year—and are admitted to the hospital almost twice as often as nonsmokers.
  • A 1991 study of Medicaid payments showed that tobacco use accounted for 41% of substance abuse-related hospital days — the same amount accounted for by illicit drug use.6

Each year U.S. employers spend over $196 billion per year in excess medical costs and lost productivity of those affected by tobacco use – on average an excess cost of $15 per smoker, per day, or $5,445 per year. With a national average tobacco-use prevalence of 20%, a company of 10,000 employees and their eligible dependents is incurring an estimated $14,188,840 per year in excess costs associated with smoking.7

 

Productivity Cost

Tobacco use costs businesses even more when absenteeism, lost productivity due to smoke breaks and workers’ compensation claims are included. Productivity and lost earnings because of smoking-related disease and premature deaths cost an additional $50 billion a year to what employers are spending on direct medical costs due to tobacco use.8 In 1999, each adult smoker cost employees $1760 in lost productivity. Male smokers are absent from work 4 days more per year than male nonsmokers and female smokers are absent 2 days more per year than female nonsmokers.9 Lost productive work time is 75% higher for smokers compared to nonsmokers.10

Comparative Cost

Studies have shown that tobacco treatment is more cost-effective than:

  • Mammography
  • Colonoscopy
  • Pap test
  • Pharmacologic treatment of mild to moderate hypertension
  • Pharmacologic treatment of hypercholesterolemia

According to the Centers for Disease Control and Prevention, paying for tobacco cessation is the most cost-effective benefit an employer can offer adult employees and is the only treatment that is also a national standard of care, with a proven ROI. Recent studies suggest the benefits of an investment in tobacco cessation outweigh the costs and, in fact, offer a net gain over time.11


 

For a free, comprehensive ROI analysis customized for your organization, please contact our sales team at 1-866-434-9750 or sales@freeclear.com

Footnotes

1 Centers for Disease Control and Prevention. "Coverage for Tobacco Use Cessation and Treatments: Why, What, and How." Rockville, Md: US Dept of Health and Human Services; 2004.
2 Centers for Disease Control and Prevention. "Targeting Tobacco Use: The Nation's Leading Cause of Preventable Death."
3 Journal of the American Medical Association, 1998.
4 Bartlett JC, Miller LS, Rice DP, Max WB. "Medical care expenditures attributable to cigarette smoking – United States, 1993." Morb Mortal Wkly Rep. 1993;43:469-472.
5 Katie Rodgers, "The hazards of secondhand smoke," Business & Health Special Report, Vol. 15, No. 8, summer, 1997, p. 6.
6 Katie Rodgers, "The hazards of secondhand smoke," "Business & Health Special Report, Vol. 15, No. 8, summer, 1997, p. 5.
7 Bartlett JC, Miller LS, Rice DP, Max WB. "Medical care expenditures attributable to cigarette smoking – United States, 1993." Morb Mortal Wkly Rep. 1993;43:469-472.
8 Katie Rodgers, “The hazards of secondhand smoke,” Business & Health Special Report, Vol. 15, No. 8, summer, 1997, p 5.
9 Hodgson T. "Cigarette smoking and lifetime medical expenditures." The Milbank Quarterly 1992; 70 (1):81-125.
10 Stewart WF, Ricci JA, Chee E, Morganstein D. "Lost productive work time costs from health conditions in the United States: results from the American Productivity Audit." J Occup Environ Med. 2003;45:1234-1246.
11 Warner, K., et al. cited in Business Health, Vol. 15, #8, Supplement A, Medical Economics, Montvale, NJ, p.9.