The financial implications of coverage of smoking cessation treatment by managed care organizations.
This paper presents results from a simulation of the financial impact and cost effectiveness of smoking cessation in a hypothetical managed care organization (MCO), using data from three large managed care organizations and from existing literature. With base-case assumptions and a market cost of capital, at five years, coverage of cessation services costs an MCO dollars .61 per member per month (PMPM). In a steady-state situation, net cost is dollars .41 PMPM. Both values include altered medical expenditures and MCO revenue patterns attributable to coverage-induced cessation. Quitters gain an average of 7.1 years of life, with a direct coverage cost of dollars 3,417 for each life-year saved. Coverage of cost-effective programs by MCOs should be strongly encouraged.
Warner
Kenneth E
KE
Department of Health Management and Policy, University of Michigan School of Public Health, Ann Arbor, MI 48109-2029, USA. kwarner@umich.edu
Mendez
David
D
Smith
Dean G
DG
D015331:Cohort Studies; D003362:Cost-Benefit Analysis; D017048:Health Care Costs; D005102:Health Expenditures; D006302:Health Services Research; D006801:Humans; D019458:Insurance Coverage; D008329:Managed Care Programs / Q000191:economics* / Q000706:statistics & numerical data; D019057:Quality-Adjusted Life Years; D016540:Smoking Cessation / Q000191:economics* / Q000706:statistics & numerical data; D014481:United States