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Why Paying Smokers To Quit Could Save Us Money

Should we pay people to quit smoking? A new study has shown that significantly more smokers will quit if they're paid by someone else to do so. Researchers tracked over 870 employees from General Electric for a year and a half, giving out payments of up to $750 to smokers who quit. Participants who were paid to quit were nearly three times as likely to quit as those who didn't receive the cash, according to findings published last week in The New England Journal of Medicine. Encouraged by the success of the trial, G.E. has already vowed to extend the program to the rest of its 152,000 employees.

"People respond to rewards that come from other people, with larger dollar amounts attached to them," says Dr. Kevin Volpp, the study's lead researcher, comparing the incentive program to the savings that smokers could accrue simply by giving up the purchase of cigarettes. "If you put $4 a day in a jar, it adds up slowly...there's something about the tangibility of large sums of money that's appealing."

The findings certainly give new credibility to incentive programs, which have become increasingly popular as employers have struggled to cope with rising health care costs.Employers who smoke can be a particular liability for businesses, costing companies an average of $3,400 a year in additional health-care bills, lower productivity and absenteeism, according to the Centers for Disease Control and Prevention. Smokers already have pay more for their health insurance at about 5 percent of companies. But some are incorporating alternative measures to bring down costs-not just by penalizing smokers, but also by rewarding good behavior.

Safeway, for instance, makes employees who smoke pay more for insurance, but then lowers their premiums if they sign up for smoking-cessation programs. (The company has adopted a similar program for obesity, lowering premiums if their employees lost 10 pounds.) By pushing preventative health and rewarding good behavior, Safeway claims it has made a significant difference in containing costs: since its program began three years ago, the average business paid an average of 16 percent more for health care, while Safeway's costs rose only 0.5 percent. (As it happens, the CEO of Safeway-Steve Burd-has also become an outspoken proponent of universal health insurance.)

There's good reason to think that reward-oriented programs are more effective in changing behavior than the penalty approach, says Volpp, who leads the Center for Health Incentives at the University of Pennsylvania. "As an employee, it could be nice if your employer said we have this campaign that's really focused on helping you, because we care about you-it's a positive message."

To be sure, it's still unclear whether these programs could be sustainable and cost-effective on a larger scale, especially as it's unclear whether participants will return to old habits without additional cash rewards. (The recent smoking study tracked participants for just 18 months.) But the success of these trials is likely to encourage further experimentation as more money gets kicked toward health and wellness programs, including some $3 billion in the stimulus bill.

As momentum builds for the expansion of public health coverage--or at least the ability to maintain the same insurer over time--there's going to be even more reason to support long-term disease prevention. Given its cost-saving virtues, it's one of the potential points of consensus between Democrats and Republicans. Just last week, in fact, Safeway's Burd met with the House GOP's new task force on health care to discuss the success of his company's smoking-cessation program and other wellness initiatives. "With entities like the VA or Medicare, you could argue that you're insuring these people for the rest of their lives," says Volpp. In the long run, the onerous cost of treating smoking-related illnesses could make a $750 reward look like a bargain.

--Suzy Khimm