Despite decades of progress in reducing the prevalence of cigarette smoking, tobacco use remains a leading cause of preventable death and disease, and a significant driver of health care costs in the United States. Smoking cessation therapy is consistently ranked among the most cost-effective clinical preventive services and is considered to be “the gold standard of health care cost-effectiveness.” Yet, delivery of evidence-based treatment for tobacco use by health insurers, accountable care organizations (ACOs), and physicians remains inconsistent and inadequate.

Although the prevalence of cigarette smoking has fallen to historic lows, overall use of tobacco remains at 19.5 percent of the adult population. Disparities in use persist by race and ethnicity, income, education, sexual orientation, gender identity, occupation, geography, and behavioral health status. Younger adults have migrated from cigarettes to e-cigarettes and oral nicotine products, while cigarette smoking rates among adults older than age 65 has remained stubbornly flat for more than a decade.

Seniors are the population at greatest risk for tobacco-related disease and represent the greatest opportunity to make a difference clinically and economically. Although the average adult smoker who quits smoking adds 10 years to their lifespan, gains in life span from smoking cessation can occur at any age.

Evidence-based treatment of tobacco use, in the form of medication and counseling, is well established. And indeed close to 80 percent of people who use tobacco recall being advised to quit by their doctors. And yet, the most recent National Health Interview Survey reports only 38 percent of those who attempted to quit smoking receive effective treatment, with 36.3 percent receiving medication, 7.3 percent receiving counseling, and 6.4 percent received optimal treatment with both counseling and medication. Clinical practice guidelines support interventions at every visit regardless of a patient’s readiness to change.

Performance in delivering cessation interventions varies widely across health systems, practices, and individual clinicians. In one large observational study, adjusted quit rates over a five-year period ranged from 14 percent to 35 percent across 20 health systems, from 5 percent to 66 percent across 1,399 practice sites, and from 4 percent to 87 percent among 3,803 health care providers. Prescribing and referral rates were similarly inconsistent. Such variability points to missed opportunities and underscores the need for systems-level reform.

This undertreatment may explain why some smokers make up to 20 attempts before they are successful. The Agency for Healthcare Research and Quality has examined the barriers to implementation of tobacco cessation services and points to clinician surveys describing limited time to provide treatment, lack of training, perceived lack of efficacy, low patient motivation, insufficient use of health information technology, and low rates of reimbursement. In its present form, the traditional model of physician-delivered advice and assistance is not working and changes to the system of care are required.

Roadmaps to systems change are captured in the Centers for Disease Control and Prevention’s (CDC’s) Tobacco Cessation Change Package, which detail approaches to patient flow, new roles for clinicians and support staff, and electronic medical record design rooted in quality improvement paradigms that improve both efficiency and effectiveness of tobacco treatment.

Although the most recent analysis of tobacco-related disease showed that it accounts for 11.7 percent of the medical expense in the United States, there has been little discussion of the economics of tobacco cessation from the perspective of health care systems, ACOs, and medical practices. With a few exceptions (including Kaiser Permanente of Northern California) most health insurers and ACOs do not publish their performance in tobacco cessation. That’s unfortunate because smoking cessation represents a ripe target for value-based payment arrangements.

The value of value-based contracts

Under value-based arrangements, financial incentives are aligned with health outcomes. Fewer hospital admissions, emergency visits, and lower overall medical expenses can translate into revenue gains that create a direct economic incentive for providers to support their patients in reducing smoking-related disease.

Yet, not everyone is on board. Many health insurance companies have argued that the time it takes to achieve a return on investment from smoking cessation is too long; members often leave before long-term savings accrue. But for integrated systems and provider groups with longer-term patient relationships, smoking cessation can generate meaningful and timely savings. A 2024 study showed that a systems-change approach to smoking cessation, including the hire of tobacco treatment specialists, had a net reduction of $35 in monthly health care costs for patients listed in a smoking registry. It is not difficult to calculate the total per-member-per-month impact by dividing that value by the prevalence of smoking. A major driver of administrative expense in this study was the cost of medications, but such costs often haven’t come into play in managed care contracts that typically carve out pharmacy expenses. Now, even that calculation has changed; varenicline, the most prescribed cessation medication, became available in generic form in 2021 and is, therefore, considerably less expensive than before.

Maximizing reimbursement under fee-for-service

For many practices, fee-for-service contracts still drive margins, and the reimbursement for tobacco cessation appears low relative to the effort required. The Medicare reimbursement for three minutes of tobacco cessation counseling (Current Procedural Terminology code 99496) is $15.50; however, that counseling service can be provided by physicians but also mid-level practitioners or any medical staff working under the supervision of the doctor. Medicare covers up to eight sessions a year, and most health insurers follow the Centers for Medicare and Medicaid Services payment guidelines. Commercial health insurers may reimburse for such services at somewhat higher rates than Medicare, while Medicaid’s rates are generally lower.

The prevalence of tobacco use is 19.5 percent of the adult population, and yet a recent report based on electronic medical records shows that health systems are billing for tobacco treatment on 2 percent or less of visits. This suggests that opportunities to provide (and bill for) services are missed, even when services are provided. The missed opportunities may be even greater as data in electronic medical records consistently underreport the prevalence of tobacco use. In 2024, this author published an article in American Journal of Preventive Medicine outlining a model for the aggregate value of cessation services if provided during every tobacco user’s visit to an eight-hospital health system across Pennsylvania and Maryland: The revenue approached $2 million per year.

Program design and costs

These studies show that significant economic returns are attainable with improvements in intensity and frequency of tobacco cessation counseling. But making the business case also requires a full accounting of the likely costs. This involves many considerations: Who will provide the counseling? How will it affect patient flow? Would it require an upgrade to the electronic medical record system? Any tobacco cessation program selected should be rooted in a strong systems-change protocol that requires clinical leadership, identification of champions, and many other elements outlined in the CDC’s Tobacco Cessation Change Package, which is part of the American Heart Association’s Million Hearts initiative.

Up to this point, wide adoption has been slow, but several models for system change are emerging and include leadership, training, optimal use of the electronic medical record, electronic referrals to state quit lines, and detailed program evaluation. Standardized approaches to the identification of tobacco users, training primary care clinicians more effectively in both cessation techniques, and appropriate billing practices could enhance service provision and health outcomes.

In settings where systems-based approaches have been fully implemented, capture of smoking status and counseling improved significantly, and the rate of change of smoking status was reported at 10.5 percent per quarter, which represents a fivefold increase over clinic baseline and double the performance of the general population. Specific models for implementation have been tested to compare cost and effectiveness.

Those making the case for investment in tobacco cessation programs can turn to other resources including:

• Recent articles exploring the business case for tobacco cessation in cancer settings.
• A detailed model for capturing costs developed in the course of assessing an entirely telephonic cessation program.
• The Smokefree Support Study Cost Calculator, a cost model that can be adopted to a variety of settings.

Putting it all together

The decision to reframe smoking cessation as a profit center represents the alignment of good medical practice and strong business interests. This type of investment will pay increasing dividends as the health impacts of smoking cessation continue to accrue for several years after cessation and larger proportions of medical practices enter value-based arrangements.

Designing and implementing a high-functioning cessation program does require upfront investment: staffing, training, workflow redesign, and electronic record optimization. But tools now exist to support program development, including calculators that estimate operating costs, model return on investment, and accommodate a range of clinical settings.

The alignment of incentives is clear. Treatment of tobacco use improves patient health, lowers total medical expense, and, when done well, can generate positive financial returns.

Edward Anselm is a board-certified internist with a long-standing focus on public health, tobacco control, and preventive care. He earned his medical degree from the Chicago Medical School at Rosalind Franklin University and completed his internal medicine residency at Montefiore Medical Center in New York. Over the past three decades, Dr. Anselm has served in senior leadership roles across clinical, corporate, and managed-care settings, including chief medical officer positions at HIP Health Plan of New York, FidelisCare, and Health Republic Insurance of New York.

Recently retired from his role as medical director at Aetna, Dr. Anselm continues to teach at the Icahn School of Medicine at Mount Sinai as a clinical assistant professor. His current work focuses on strengthening reimbursement pathways for tobacco cessation and preventive services, helping clinicians integrate evidence-based care that improves patient outcomes while supporting practice sustainability. His research has been published in the American Journal of Accountable Care, the American Journal of Preventive Medicine, AJPM Focus, and Health Affairs Forefront, including articles on tobacco control in accountable care, underbilling of cessation services, and the financial and quality benefits of treating tobacco use as a clinical priority.

Dr. Anselm’s educational and policy work is shared through EdwardAnselmMD.com and The Anselm Nicotine Prescription, with professional updates available on LinkedIn.