Cessation Benefits Are Cost-Effective
The minor cost of covering tobacco cessation benefits seems insignificant when compared to the major financial burden that tobacco use places on businesses. As health care costs due to tobacco related illnesses increase, they erode employer profits, which in turn create a cycle of diminished health care coverage, salaries, and other benefits for employees.
"A study found $225 in savings per employee in annual health costs.
We can show a reduction in absenteeism.
We can show a reduction in our health care costs."
William Weldon, CEO, Johnson & Johnson,
on the effectiveness of Johnson & Johnson’s
tobacco-free workplace policies
- Cost analysis has shown tobacco cessation benefits to be either cost-saving or cost-neutral. Tobacco cessation is more cost-effective than most other common and covered disease prevention interventions, such as treatment of hypertension and high blood cholesterol.
- Comprehensive tobacco cessation benefits cost between $1.20 and $4.80 per employee per year (costs vary based on utilization and dependent coverage). In contrast, the annual cost of tobacco use is about $3,800 per smoker.
An employer’s cost to implement a tobacco cessation program becomes cost-neutral at 3 years and begins to save healthcare dollars at 5 years.
The most cost-effective population to target for smoking cessation programs is pregnant women. Neonatal health-care costs related to smoking are equivalent to $704 for each maternal smoker. Studies indicate that a smoking cessation program for pregnant women can save as much as $7 for each $1 spent.
- Employer spending on health promotion and chronic disease prevention is a good business investment. Programs have achieved a rate of return on investment ranging from $3 to $15 for each dollar invested with savings realized within 12 to 18 months.
- Besides the savings in healthcare costs, economic benefits of preventive intervention include reductions in absenteeism costs, on-the-job productivity loss, life-insurance costs, and costs associated with fire and property damage due to smoking.
- Because smoking cessation efforts are relatively inexpensive and yield a large, long-term benefit, they help to stem the rising cost of health care.
Measures that keep health care costs in check are valuable because it is estimated that a one percent reduction in health care costs could increase retained profits by five percent.
Or, to determine what your business’ cost saving would be, go to Making the Business Case for Tobacco Use Cessation Benefits: www.businesscaseroi.org