Ample evidence in the medical literature has shown that smoking cessation therapies are safe (that they pose no risk or a tolerable level of risk to the patient), effective (that they help smokers to quit smoking and save lives), and cost effective (that they can deliver the intended outcomes at a lower cost than any alternatives).¹ Thus health insurers are expected to place the highest priority on smoking cessation relative to most other preventive measures since such emphasis would give them more bang for the buck.

But numerous studies examining insurance coverage for preventive services have shown that health plans, though interested in prevention in general, place more emphasis on such services as flu shots for seniors, cancer screening for adults, and immunization against childhood diseases for children than the extremely cost-effective smoking cessation.^2,3,4,5 The reason is not difficult to see when the "free-rider problem" is considered.

The benefits of smoking cessation are substantial in terms of reduced future utilization of health care and increased productivity when ex-smokers become healthier after quitting smoking. However, unlike flu shots and pediatric immunization which deliver immediate payoffs for both the health plan and its patients, the benefits from smoking cessation treatment cannot be realized in a lump sum during a short period of time. Meanwhile, at least a quarter of HMO enrollees switch health plans every year and bring with them the benefits of lower future health care costs to the new health plans that can now free ride on the efforts provided by the previous HMOs.⁶ This inability to exclude free riders has been suspected to be a major reason why health insurers, although knowing full well the long-term benefits of many cost-effective preventive measures, are reluctant to "do the right thing." The free-rider problem adds weight to the support for community-based anti-smoking programs, such as anti-smoking programs in the school and counter-marketing measures in the community, to discourage the consumption of cigarettes.

Does the free-rider problem apply to other medical conditions causing health plans to under treat their enrollees in general? This possibility cannot be ruled out given frequent media reports of premature discharges from the hospital of HMOs patients. But available evidence suggests that on the whole, no systematic mistreatment of patients by health plans exists, and patients have several things on their side.

First, health plans do have strong incentives in delivering good curative services that treat acute medical conditions because these services deliver immediate payoffs and health plans bear the financial and legal consequences if they fail to do so. Second, most employers have done a reasonable job in carrying out their fiduciary responsibilities as purchasers of health insurance. Today, employers routinely monitor health plans' adherence to established clinical protocols and practice guidelines that still place greater emphasis on curative care over preventive care. Third, the information systems tracking the quality of health plans and their outcomes are getting better. Employers and employees now have direct access to these outcome data.