Medicaid Anti-Smoking Program Saved Big Money, Study Says

  • January 13, 2012
  • By Christine Vestal
Numerous studies have shown that investments in programs aimed at helping people quit smoking reap significant long-term reductions in health care costs. Even so, fiscal stress has caused states to dramatically reduce spending on anything that does not yield immediate returns.

Now new data suggests that states may not have to wait so long for the returns. According to a
study conducted by George Washington University, a Massachusetts Medicaid program saved $3 in Medicaid hospitalization expenses for every dollar it invested in a comprehensive smoking cessation counseling and treatment program — and the savings accrued in the first 16 months of the program.

While not all Medicaid patients who underwent the treatment were able to quit smoking permanently, the group as a whole had far fewer hospital admissions for cardiovascular problems than it did before entering the program. According to the report, the annual medical savings attributable to even a brief reduction in smoking was $571 per participant, far outweighing the $183-per-person cost of the program.

"The good news from a state budget perspective is that even if people stop smoking temporarily, there can be immediate savings," says Leighton Ku, one of the study's authors. "From a public health perspective we'd like to help people stop smoking for good," Ku says. "But the study showed a rapid reduction in the number of people having heart attacks and other cardiovascular problems, and that led to immediate savings."

In the past, most studies have calculated the lifetime value of breaking the tobacco habit. People miss fewer days of work, live longer and are less likely to develop cancer, emphysema and other respiratory, cardiovascular and related diseases. 

The Massachusetts study is among the first to calculate the short-term return on investment in smoking cessation therapies among the Medicaid population.  The independent report used data from two previous state studies that tracked the incidence of hospital admissions related to heart attacks, coronary heart disease and non-specific chest pains from 2002 through 2008.

Prior to the start of the program in 2006, the smoking rate for Massachusetts Medicaid recipients was more than 38 percent. In the first two and a half years of the program, more than 40 percent of Medicaid smokers took advantage of the benefit and the smoking rate dropped 10 percent. Nationwide, the smoking rate for Medicaid beneficiaries is 35 percent. That compares to 19 percent in the general population and less than 10 percent among those with a college degree.
 
Tobacco-related health care costs in the United States total nearly $100 billion annually. The estimated cost to Medicaid is about $50 billion.

The 2010 national health law requires all states to provide tobacco cessation coverage for pregnant women in the Medicaid program, but not for all other beneficiaries. In 2014, insurance plans will be required to include preventive therapies such as smoking cessation under the so-called "essential benefits" provision.
 
While many states currently provide some tobacco cessation treatment under Medicaid, only a handful have made it a priority. Massachusetts, Indiana, Minnesota, Nevada, North Carolina and Pennsylvania cover all recommended treatments, including nicotine replacements, prescription drugs and counseling. 
 
States with the highest rate of smoking among Medicaid beneficiaries have the most to gain from smoking cessation programs. But according to the Partnership for Prevention, one of the study's sponsors, some of the states with the highest rates of smoking have the lowest levels of tobacco cessation coverage. These include Georgia, Kentucky, Tennessee and West Virginia. 

"These new findings should make elected officials take notice," says David Zauche, senior fellow at the Partnership for Prevention. "If smoking cessation were just a neutral (financial) investment, it would be a good investment. But in Massachusetts, it actually showed a profit."