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Study Weight Surgery Pays Off for Employers

October 6, 2008
Related Topics: Medical Benefits Law, Health and Wellness, Latest News
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Weight-loss surgery saves employers money within as little as two years while transforming the health of employees, a new study shows.

In the largest study of its kind, researchers looked at health care costs of more than 3,000 patients who underwent bariatric surgery and followed them for as long as five years after the surgery to determine whether it reduced overall medical costs. Researchers concluded in the study, published in the American Journal of Managed Care, that payers recouped the cost of the surgery—which varied from $16,000 to $25,000—within two to four years.

“Is it a good investment?” asked Pierre-Yves Crémieux, the paper’s lead author. “The answer is yes. In two to four years you will get your money back. Regardless of whether it’s good for your patients, you will get your money back.” Crémieux is managing principal at Analysis Group in Boston and adjunct professor at the University of Quebec at Montreal.

Recent studies have shown the surgery to be good for patients too—a way to reduce the risk of chronic illness such as diabetes, heart disease, depression and other health problems in morbidly obese individuals. A study of weight-loss surgery published this year in the Journal of the American Medical Association showed that 73 percent of people with Type 2 diabetes had complete remission of the disease after weight-loss surgery, compared with the 13 percent of patients who tried only conventional medicines, changing their diet and exercising.

The question for employers has been one of cost—they have expressed concern that the surgery is dangerous and expensive. Since only a handful of employees at any one company typically are obese enough to need the surgery, one complication could make it impossible for a company to recoup its upfront cost.

Crémieux said improvements in the surgery, especially the increasing use of minimally invasive laparoscopy, have made it safer and cheaper. He said  laparoscopic bariatric surgery costs around $17,000 and recovery times are shorter, allowing companies to recover their costs within two years.

The study measured its savings by the cost of treating a control group with similar health conditions with drugs alone. A corresponding editorial concluded that rising costs for those who did not receive the surgery drove much of the savings. It also noted that little is known about the long-term costs and health effects of people who underwent bariatric surgery.

Still, the findings were a boon to companies such as Harrah’s Entertainment in Las Vegas, which pays for the surgery for people who meet certain health criteria. The company requires patients to meet with a personal trainer and a dietitian. The company also provides support groups to help patients adjust to the change.

“We have not been able to do a longitudinal study on our specific experience to date,” said Jeff Shovlin, the company’s vice president for benefits. “However, given the analytics that have been done by consultants and the medical community on bariatric surgery, it’s clearly supporting our decision to cover this benefit under our health insurance program.”

The editorial accompanying the research criticized employers and insurers who would decide to cover the surgery based only on its ability to provide a return, saying such a standard is not applied to other forms of surgery or medical and drug treatments. In the end, Crémieux said, it is the health of the patient that should be considered.

Shovlin shared an e-mail from a woman in the company’s health plan who underwent bariatric weight-loss surgery this summer. The woman, whose name was not revealed, described herself as being in her 50s, diabetic and frustrated that she would have to spend the rest of her life on expensive medications. She took four medications every day. One medicine, Byetta, cost the company nearly $10,000 a year.

In an e-mail to the staff of Harrah’s wellness center, the woman wrote: “Thank you for making me healthy and strong and disease-free, drug-free. No amount of money can buy the happiness I feel now, the peace of mind I have now.”

—Jeremy Smerd

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