Economic Impact of Financial Incentives and Mailing Nicotine Patches to Help Medicaid Smokers Quit Smoking: A Cost-Benefit Analysis

Abstract

An RCT designed to increase Medicaid smokers' quitting success was conducted in California during 2012-2013. In the trial, alternative cessation treatment strategies were embedded in the state's ongoing quitline services. It found that modest financial incentives of up to $60 per participant and sending nicotine patches induced significantly higher cessation rates compared with usual care alone and usual care plus nicotine patches. Building upon that study, this study assessed potential population-level costs and benefits of integrating financial incentives and nicotine patches in a quitline setting for Medicaid smokers. A cost-benefit analysis was undertaken from the Medicaid program's perspective. The Cardiovascular Disease Policy Model was used to simulate future healthcare expenditures over a 10-year horizon for each treatment strategy for a study cohort of California Medicaid enrollees who were aged 35-64 years in 2014 (n=2,452,000). To simulate potential population-level benefits under each treatment strategy, each treatment was applied to all active smokers in the study cohort (n=478,300). Sensitivity analyses were conducted by varying key parameters, such as cessation costs, discount rate, relapse rates, and time horizon. Adding both financial incentives and nicotine patches to usual quitline care would result in $15 million net savings over 10 years, with a benefit-cost ratio of 1.30 compared with the usual care plus nicotine patches strategy. It would yield $44 million net savings, with a benefit-cost ratio of 1.90 compared with usual care alone. The strategy of providing financial incentives and mailing nicotine patches directly to Medicaid smokers who call the quitline is cost saving. SUPPLEMENT INFORMATION: This article is part of a supplement entitled Advancing Smoking Cessation in California's Medicaid Population, which is sponsored by the California Department of Public Health.