Monitoring bariatric surgery can lead to cost offsets for health plans

April 1, 2007

National reports-While national expenditures on bariatric surgery have increased, the average cost per patient has declined, say industry experts.

NATIONAL REPORTS-While national expenditures on bariatric surgery have increased, the average cost per patient has declined, say industry experts.

An 804% rise is obesity surgeries between 1998 and 2004 led to a 756% rise in total national bariatric surgery hospital costs from $147 million to $1.26 billion, according to a recent statistical brief, "Bariatric Surgery Utilization and Outcomes in 1998 and 2004," from the Agency for Healthcare Research and Quality (AHRQ).

"This cost growth trend will continue, since less than 5% of the 12 million Americans eligible for the surgery have had it," says Bill Encinosa, PhD, senior economist, Center for Delivery, Organization and Markets, AHRQ, and co-author of the brief. "However, it is important to note that while national expenditures on bariatric surgery have increased, the average cost per patient has declined 5% between 1998 and 2004, after adjusting for inflation."

Surgeons have improved the technique of the surgery, according to Dr. Encinosa. "Moving to a laparoscopic technique-a less-invasive technique-the length of stay in the hospital declined from five days to three days between 1998 and 2004. This has saved costs. Moreover, as new techniques and surgical advancements emerge, I suspect the average costs per patient for bariatrics will continue to decline," he says.

The health plans that succeed with bariatric surgery are the plans that choose the right hospitals and surgeons to perform the bariatric surgery, according to Dr. Encinosa. "While the death rate of the surgery declined 80% between 1998 and 2004, the rate of complications from the surgery is still high [40% in 2002]," he says. "These complications can be expensive because of readmissions."

Cases with complications and readmissions reportedly can cost three times as much as a bariatric surgery without complications. "Thus, plans need to monitor readmission rates and complication rates of the bariatric doctors they send their patients to," Dr. Encinosa says. "Complications can be reduced if the plans select surgeons with a high volume of patients, and if they select hospitals that are designated as Bariatric Centers of Excellence by the American Society for Bariatric Surgeons."

Successful health plans will have a program to follow up with patients after the surgery to reduce the risk of post-operative complications and visits to the ER, he adds.

According to Dr. Encinosa, bariatric surgery leads to cost offsets for the health plan. "For example, due to the loss of weight resulting from the surgery, 77% of the patients totally get rid of their diabetes," he says. "This is a great cost savings, since health plans can spend up to $4,000 per year per diabetic on diabetes drugs and care. The surgery also results in the mitigation of other chronic conditions, such as hypertension and sleep apnea."

Dr. Encinosa cites "The Impact of Weight Reduction Surgery on Health Care Costs in Morbidly Obese Patients" (Obesity Surgery, 2004), which showed that because of these cost offsets, the costs of bariatric surgery are recouped after three and a half years following the surgery.

OBESITY AMONG CHILDREN

Because surgery is only for the morbidly obese, health plans will need other programs to address the entirety of the epidemic. In the past, plans began to see disabilities emerge in patients at ages 50 to 60 years.

"Now many health plans are seeing for the first time, costly disability emerge among 30- and 40-year-olds, particularly due to obesity," says Dr. Encinosa. "This trend can only be reversed if obesity is addressed in childhood. Some recent successes have been made at the political level, for example, by Bill Clinton brokering a deal to get soda machines out of schools or New York City banning artificial trans fats, etc."

Health plans will have to ride the coattails of these political advances by shifting more preventive care toward providing incentives for exercise and good nutrition. "While some plans now see the cost-saving advantages of offering diabetic drugs at no cost to reduce diabetic complications, plans will similarly soon see the advantage of offering rebates or discounts for exercise club memberships and weight-loss programs to reduce the costs of obesity," he says.