Calculating and Leveraging
ROIs in Tobacco Control
2016-2017 TCN Podcast Series
Andrea Mowery, ClearWay Minnesota
Jeffrey Fellows, Kaiser Permanente Center for Health Research
Barry Sharp, Texas Department of State Health Services
Meg Riordan, Campaign for Tobacco-Free Kids
Kaiser Permanente
Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH © 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
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Research
Return on Investment from Tobacco Cessation
Jeffrey L. Fellows, PhD
Senior Investigator and health economist
Kaiser Permanente Center for Health Research
Portland, OR
Email: [email protected]
Kaiser Permanente
Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH © 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
Kaiser Permanente
Research
Defining the return on investment (ROI) from tobacco control programs
• ROI is a financial measure of the net savings (or costs) from an investment in a revenue generating activity
• Presented as a percent (%) • ROI = [(revenue – cost)/cost] x 100
• Used differently in healthcare program evaluations • ROI % doesn’t related well to health outcomes (program size/impacts)
• ROI adds future spending to program evaluation
• Reflects a need to make a “Business Case” for program investments
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Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH © 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
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Research
Economics of treatment: What do we know?
• Costs of smoking are high (Source: CDC)
• 480K premature deaths attributed to smoking, each year
• $170b healthcare costs/$150b lost productivity, each year
• Clinical cessation services are cost-effective
• The gold standard for preventive services (Eddy, 1992)
• $1,000-$3,500 per life year saved ($500–$2,000 per quit)
• More services lead to more quitting
• Best: Multi-session quit coaching with medications (USPHS, 2008)
• Community interventions are cost-effective • State quitlines (with and w/o NRT)
• Comprehensive tobacco control program spending: CA; MA; TX; MN
• Not enough
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Research
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Research
The business case for clinical smoking cessation
• Demonstrate the value of smoking cessation • High cost of smoking & favorable CEA are not enough
• Need near-term results (3-5 years)
• ROI (net financial costs/savings) key to “Business Case”
• Challenges • Limited longitudinal data for smokers and quitters
• Current smokers seem cheap
• Former smokers seem expensive
• Quitters may leave before savings occur
Kaiser Permanente
Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH © 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
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Research
Business Case-ROI Study
• Test 4 system-level interventions • 5 As, w/ and w/o Rx and quitline
• Compared to existing practice (2 As)
• 1-year program, 5-year follow-up
• Longitudinal cohort model • EMR for 200K KPNW adults
• Data for 1998-2002
• Smoking history, SRD Dx, disenrollment
• medical costs and productivity
• Unique approach (w/smoking data) • Timing of Disease and self-quitting
• Disenrollment, by smoking and disease status
• Future $’s for healthy service recipients
• Funded by Robert Wood Johnson Foundation
Kaiser Permanente
Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
Mean annual medical expenditures for KPNW adults,
by smoking status–1998-2002 (2007$)
Baseline expenditure data
Continuing
Smoker
Quit in
1998
Former
smoker
Never
smoker
1998 $3,581 $10,392 $7,278 $3,351
1999 $3,994 $9,206 $8,792 $3,591
2000 $4,177 $7,355 $9,951 $4,047
2001 $4,504 $7,703 $11,590 $4,529
2002 $5,281 $8,054 $10,934 $4,702
Estimates are weighted for age and sex, and reflect disenrollment. Generalized Linear Modeling (SAS PROC GENMOD) was used to assess costs. Values sign. at p<.001.
Kaiser Permanente
Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
Mean expenditures before/after quitting (in 1999) for KPNW
smokers, by smoking-related disease (SRD) status
0
2,000
4,000
6,000
8,000
10,000
-8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8
Q uarter Pre/Post Q uit Q uarter
Av
era
ge
Co
st (
20
02
$)
Pre-Existing SRD
SRD in 1999
SRD after 1999
No SRD
SRD=smoking
related
disease
Kaiser Permanente
Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
Quarterly mean RX cost for 1999 KPNW quitters before and after quitting, by SRD status
0
100
200
300
400
500
-8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8
Quarter Pre/Post Quit Quarter
Aver
age
Cost
(2002$)
Pre-Existing SRD
SRD in 1999
SRD after 1999
No SRD
Kaiser Permanente
Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
Male Female
Quit rate 18-34 35-64 65+ 18-34 35-64 65+
No SRD
Heavy smoker .03 .03 .04 .04 .04 .05
Light smoker .04 .04 .05 .04 .05 .06
SRD
Heavy smoker .10 .10 .13 .11 .12 .15
Light smoker .12 .13 .16 .14 .15 .18
Annual probability of quitting by SRD diagnosis, amount smoked, sex, and age group
Estimates derived using multiple logistic regression modeling. All values were significant at p<.01.
Kaiser Permanente
Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
Disenrollment rates by smoking status, smoking-related disease (SRD) diagnosis, and age group
18-34 35-64 65+
Current smokers
No SRD Heavy .20 .09 .03
Light .24 .12 .04
SRD Heavy .12 .05 .02
Light .15 .07 .02
New Quitters
No SRD Heavy .15 .07 .02
Light .18 .09 .03
SRD Heavy .08 .04 .01
Light .11 .05 .02
Estimates derived using multiple logistic regression modeling. All values are significant at p<.001. Four-year average rates, 1999-2002.
Kaiser Permanente
Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
Current
Smoker
SRD Dx
(yes/no)
Quit
(yes/no)
Disenroll
(yes/no)
SRD Dx
(yes/no)
SRD Dx
(yes/no)
SRD Dx
(yes/no)
New
Quitter
Relapsed
Relapse
(yes/no)
Disenroll
(yes/no)
Disenroll
(yes/no)
Cessation
service
recipient
Quit
(yes/no)
Smoking Cessation Program*
Existing Practice
Return on Investment Model Flow Diagram for Years 1-5
*Provided to smokers at a routine care visit.
$s
$s
$s
Kaiser Permanente
Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
5A’s 5A’s-Rx 5A’s-QL 5A’s-both
Reach*
No copay
Copay
9.6 - 13.6%
4.8 - 6.8%
9.6 - 13.6%
4.8 - 6.8%
7.7 - 10.9%
3.9 - 5.4%
7.7 - 10.9%
3.9 - 5.4%
Q rate 16% 26.9% 19.2% 29.2%
Cost/ppt† $34 $350 $206 $410
*Reach based on % with a visit, 75% ask/advice, 46% ready to quit, 50%-40% regimen acceptance. Data vary somewhat by age and sex. †Participants include all counseled patients, incl. those receiving 5As who would have rejected the full regimen. Costs include physician time, overhead, NRT and QL services, and clinical training costs. Sources: Fiore et al., 2000; Hollis, 2001; USDHHS, 2001; AMA, 2003; Peden and Baker, 2002
Intervention reach, efficacy and costs
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Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
Cumulative health plan ROI per member per month (PMPM)
by intervention, no member copay
5 A’s
5 A’s +
NRT
5 A’s +
Quitline
5 A’s +
Both
Program cost $445K $1,389K $1,043K $1,799K
PMPM $0.20 $0.62 $0.47 $0.80
ROI PMPM
Year 1 $ (0.11) $ (0.56) $ (0.43) $ (0.75)
Year 2 $ 0.97 $ 0.43 $ 0.63 $ 0.23
Year 3 $ 1.72 $ 1.17 $ 1.38 $ 0.97
Year 4 $ 2.28 $ 1.74 $ 1.94 $ 1.54
Year 5 $ 2.48 $ 1.96 $ 2.14 $ 1.77
Incremental ROI compared to existing practice (2 As) in discounted 2007 dollars.
Sensitivity Analysis: Changing disenrollment, reach, efficacy, and SRD rates affected the ROI estimates but not the conclusions.
Kaiser Permanente
Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
Cumulative health plan ROI per member per month (PMPM)
by intervention, with member copay
5 A’s
5 A’s +
NRT
5 A’s +
Quitline
5 A’s +
Both
Program cost $445K $846K $674K $1,051K
PMPM $0.20 $0.37 $0.26 $0.42
ROI PMPM
Year 1 $ (0.11) $ (0.31) $ (0.23) $ (0.37)
Year 2 $ 0.97 $ 0.75 $ 0.87 $ 0.69
Year 3 $ 1.72 $ 1.50 $ 1.63 $ 1.44
Year 4 $ 2.28 $ 2.07 $ 2.19 $ 2.00
Year 5 $ 2.48 $ 2.27 $ 2.38 $ 2.21
Incremental ROI compared to existing practice (2 As) in discounted 2007 dollars.
Sensitivity Analysis: Changing disenrollment, reach, efficacy, and SRD rates affected the ROI estimates but not the conclusions.
Kaiser Permanente
Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
Cumulative health plan ROI per member per month (PMPM) by
intervention, worst case scenario*
5 A’s
5 A’s +
NRT
5 A’s +
Quitline
5 A’s +
Both
Program cost $917K $1,861K $1,515K $2,271K
PMPM $0.41 $0.83 $0.68 $1.01
ROI PMPM
Year 1 $ (0.34) $ (0.77) $ (0.64) $ (0.37)
Year 2 $ 0.67 $ 0.15 $ 0.39 $ (0.05)
Year 3 $ 1.33 $ 0.79 $ 1.06 $ 0.58
Year 4 $ 1.71 $ 1.17 $ 1.44 $ 0.96
Year 5 $ 1.80 $ 1.26 $ 1.54 $ 1.06
Incremental ROI compared to existing practice (2 As) in discounted 2007 dollars.
*Doubled disenrollment, low intervention efficacy, 15% discount rate, and $400K added for provider incentives to meet delivery targets.
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Research
© 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH © 2013, KAISER PERMANENTE CENTER FOR HEALTH RESEARCH
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Research
Conclusions from the Business Case Study
• Cost of doing nothing is high
• Cessation saves money in near-term
• ROI results are stable across a wide-range of inputs
• Disenrollment is key, not in expected way
• Sick quitters: costly and stay in the health plan
• Healthy quitters more likely to stay vs. continuing smokers
• Key messages
• More to fear from sick quitters who stay, than health quitters who leave
• Helping patients quit is good business
Campaign for Tobacco-Free Kids www.tobaccofreekids.org
Demonstrating the Value of Tobacco Prevention Programs
2
Meg Riordan
Campaign for Tobacco-Free Kids
Campaign for Tobacco-Free Kids www.tobaccofreekids.org
Projecting the Impact of Changes to Program Funding and Smoking Declines
3
Campaign for Tobacco-Free Kids www.tobaccofreekids.org
Benefits & Savings From Each Percentage Point Decline in Smoking
4
Campaign for Tobacco-Free Kids www.tobaccofreekids.org
Customizable Slides: State Tobacco Prevention Spending vs. Total Tobacco Revenue
5
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Total State TobaccoRevenues
CDC Recommended AnnualInvestment
Actual State TobaccoPrevention Spending
$388.6 Million Estimated Tobacco
Tax Revenues
$165.3 MillionEstimated Tobacco
Settlement Revenues
$553.9 million
$48.0 million
$10.6 million
millio
ns
Maryland
Maryland spends 1.9% of
its tobacco revenues on
tobacco prevention
programs
Campaign for Tobacco-Free Kids www.tobaccofreekids.org
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Tobacco companies
are outspending
state tobacco
prevention spending
$189 to $1
millio
ns
$299.4 million
$1.6 million
Customizable Slides: State Tobacco Prevention Spending vs. Tobacco Industry Marketing
Michigan
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Tobacco Industry Marketing Spending Tobacco Prevention Spending
Campaign for Tobacco-Free Kids www.tobaccofreekids.org
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$1,000
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$5,000
$6,000
Tobacco-Related HealthcareCosts
Tobacco Prevention Spending
Customizable Slides: State Spending vs. Health Care Costs
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Ohio
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$13.5 million
$5.64 billion
billio
ns
Campaign for Tobacco-Free Kids www.tobaccofreekids.org
State Spending Infographic
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Campaign for Tobacco-Free Kids www.tobaccofreekids.org
Key Messages for Tobacco Prevention
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Campaign for Tobacco-Free Kids www.tobaccofreekids.org
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Campaign for Tobacco-Free Kids Website
http://www.tobaccofreekids.org/f
acts_issues/fact_sheets/policies/
prevention_us_state/
Campaign for Tobacco-Free Kids www.tobaccofreekids.org
Summaries of the Evidence on Website
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http://www.tobaccofreekids.org/facts_issues/fact_sheets/policies/prevention_us_s
tate/save_lives_money/
Campaign for Tobacco-Free Kids www.tobaccofreekids.org
Annual State Report on State Tobacco Prevention Spending
12tfk.org/statereport
Campaign for Tobacco-Free Kids www.tobaccofreekids.org
Meg RiordanVice President, Research
Campaign for Tobacco-Free Kids202.296.5469
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