Benefits of The Tobacco Solutions Program
Estimating the economic impact of a newly proposed tobacco cessation program is not an exact science; however, there are several good formulas that can provide a good starting point. The three most important components of estimating cost benefit are:
1. Estimating how many members or employees will participate in the program
2. Determining how much their participation will cost
3. Estimating how successful the program will be; in other words, how many participants actually quit
1. Estimating Program Participation
To determine participation, use the "Estimated Program Participation Model" link listed near the bottom of this page. Just plug in your plan numbers using percentages similar to those used throughout the process chart. You also can simply take the number of total eligible members over the age of 15 (presuming that the benefit will be open to dependents and that those under 15 are less likely to smoke) and multiply that number by the percentage of adults estimated to use tobacco.
An example:
We'll use the fictional XYZ Health Plan as our example. XYZ has 300,000 members, so if you multiply that number by 23 percent (median estimate of adult tobacco use in the US) we can determine that there are 69,000 members using tobacco.
Next we can estimate how many members will actually enroll in the program during a given year. This number is highly dependent on marketing efforts, benefits design, and incentives, but a reasonable goal for participation is 3-5 percent. Given the likelihood that four percent of all eligible tobacco users will enroll in the program, we could then estimate that 2,760 members will actually participate on an annual basis.
2. Estimating Program Costs
Now that we have the number of likely participants, we can estimate the cost of providing the service. Tobacco Solutions has three cost areas: individual cessation counseling, pharmacotherapy, and program administration.
A. Behavioral Intervention Costs
Tobacco Solutions has two cost variables for cessation counseling, the cost for phone based coaching services (@$145 per user)* and the cost for web-based interventions (@$45 per user)*. Our experience has shown that most plans will have a four to one ratio of phone use to web use. Using the numbers from our previous example, XYZ Health Plan's cost for delivering behavioral intervention is $300,150 for phone services (2,070 participants @$145 per user)* plus $31,050 for web services (690 participants @$45 per user)*, for a total of $331,200 per year. You also should note that as experience and comfort with the Internet grows, the ratio of phone to Internet users would likely be more in balance.
B. Pharmacotherapy Costs
A number of effective pharmacotherapy products for aiding tobacco cessation are on the market, including the nicotine patch, inhalers, nicotine gum, and Zyban. The Tobacco Solutions program exclusively distributes the Habitrol Patch from Novartis; however, we can provide prior authorization services on other prescription products. We also are willing to explore distribution of other over-the-counter non-patch products. Currently we estimate that approximately 70 percent of enrollees will want to use some form of pharmacotherapy. Given the price differences between these products we recommend basing pharmacotherapy cost on the cost of our distributed Habitrol as this will be the most popular selection. Cost for the home delivery of a complete 8-week course of therapy is $145*, which includes shipping and handling, customized educational materials, and incentive items.
XYZ Health Plan's cost to deliver pharmacotherpy would be $280,140 (70 percent of 2,760, "1,932" times $145 per user).
C. Administrative Costs
Tobacco Solutions is designed to be a turnkey program. You will find that it requires very little internal administrative time or resources. A minimal, one-time only $6,500 start-up fee* covers beBetter Network's program customization. We strongly recommend that sponsoring organizations similar to the size of our sample XYZ Health Plan budget $35,000 for marketing, internal administration, and staff time. In our example, total administrative cost is $41,500.
D. Total Annual Cost
XYZ Health Plan's total annual cost for our comprehensive tobacco cessation program, including intensive individual behavior modification and pharmacotherapy, would cost $652,840 per year or $9.46 per tobacco user. That's less than $10 per tobacco user.
3. Estimating Program Impact On Investment
Our experience has proven that Tobacco Solutions easily pays for itself. Compare our quit rates to the costs of tobacco use and you can see our program's economic benefits.
The measure of effectiveness in tobacco cessation programs is the annual quit rate. In the past two years the Tobacco Solutions program has conservatively documented a 22 percent quit rate in Medicaid participants and a 33 percent quit rate in non-Medicaid participants.
The Tobacco Information and Prevention Source (TIPS), a division of the National Center for Chronic Disease Prevention and Health Promotion, estimates the total economic cost of smoking is $3,391 per smoker per year. This estimate includes higher medical costs, productivity losses, and absenteeism. Even if we take a more conservative look at costs and focus specifically on higher medical service utilization directly related to tobacco use, we can estimate that tobacco users will cost an organization $1,000 more than non-tobacco users(1) each year.
Take XYZ's estimated 2,760 participants and multiply by our expected quit rate (33 percent) to come up with 910 successful quitters. Multiply that number by the conservative annual cost savings of $1,000 and you learn that Tobacco Solutions can help you realize savings of $910,000 annually.
Conclusion
Estimating the cost benefit of tobacco cessation programs is not an exact science. If you compare our numbers to other excellent economic impact estimation tools, you will find we have been conservative in estimating the number of quitters, the cost savings they will generate and the overall impact on a health plan or employer.
Please check out the Centers for Disease Control's free calculator know as SAMMEC (Smoking Attributable Mortality, Morbidity and Economic Costs). Adult SAMMEC is an on-line application that helps to estimate the number of premature deaths, years of potential life lost, medical expenditures, and productivity losses attributed to smoking among adults. Click here to go to the SAMMEC free online calculator.
*Prices quoted in this informational piece are subject to change.
(1) Multiple studies from the CDC, AAHP, TIPS.
