New Study Finds Positive Return on Investment for States that Invest in Quit Smoking Treatments
For every $1 spent on helping smokers quit, Michigan would see $1.24 return
OAK PARK MI (09/14/2010)(readMedia)-- .
Note to Editors: State-specific data is attached. Additional information is at www.lungusa.org/cessationbenefits
A new study released today by the American Lung Association, and conducted by researchers at Penn State University, finds that helping smokers quit not only saves lives but also offers favorable economic benefits to states.
For every dollar Michigan spends on providing tobacco cessation treatments, there is the potential for $1.24 return on that investment.
The combination of direct health care expenditures, workplace productivity losses, and costs of premature death total a $10,968,142,443 annual impact on Michigan's economy.
Consequently, although the average retail price of a pack of cigarettes in Michigan is $6.54, the real cost to society and the state's economy is $22.48.
"This is money that the state government and consumers could be spending in other places. As states look for ways to reduce costs, helping people quit using tobacco is an important solution," said Barry Gottschalk, CEO of the American Lung Association in Michigan.
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 coverage to help people quit smoking. 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.
Each year, tobacco use kills 393,000 people in America, and this new study identifies significant and staggering costs directly attributable to death and disease caused by smoking.
Nationwide, the study finds that smoking results in costs to the U.S. economy of more than $301 billion. This includes workplace productivity losses of $67.5 billion, costs of premature death at $117 billion, and direct medical expenditures of $116 billion.
The study also calculates the combined medical and premature death costs and workplace productivity losses per pack of cigarettes. The nationwide average retail pack of cigarettes is $5.51. The costs and workplace productivity losses nationwide equal $18.05-more than 300 percent the average retail price of a cigarette pack – but still below the impact on Michigan.
Smoking is the number one preventable cause of illness and death in the United States and surveys show that 70 percent of tobacco users want to quit. Quitting can often take several attempts before a smoker is successful. Using evidence-based treatments increases smokers' chances of quitting – but many smokers don't have access to or don't know about what kind of treatments are available to them.
In addition to identifying the staggering costs of smoking to the U.S. economy, this new study now provides state governments with compelling economic reasons to help smokers quit.
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.
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. The American Lung Association urges every state to provide all Medicaid recipients and state employees with comprehensive, easily accessible tobacco cessation benefits. A comprehensive cessation benefit includes all seven medications and three types of counseling recommended by the U.S. Public Health Service for tobacco cessation. Only six states now provide comprehensive coverage for Medicaid recipients: Indiana, Massachusetts, Minnesota, Nevada, Oregon and Pennsylvania.
The Lung Association also recommends that private insurance plans and employers offer comprehensive cessation coverage and encourages states to require them to cover these treatments. Only seven states have such requirements now: Colorado, Maryland, New Jersey, New Mexico, North Dakota, Oregon and Rhode Island.
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.