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Surgical costs

More time to recuperate the costs of bariatric surgery

Based on projections, it would take more than ten years to recover the costs of the LRYGB procedure.
The outcomes are more significant for the diabetes subsample, with costs fully recovered in 1.25 for banding

The time taken to recuperate the costs from bariatric surgery are more likely to be double the 5.25 years previously estimated for laparoscopic adjustable gastric band (LAGB), according to a study that assessed The Business Case for Bariatric Surgery Revisited: A Non-Randomized Case-Control Study business case for bariatric surgery published online in the journal PlosOne. The authors conclude that the time to recuperate the costs from laparoscopic Roux-en-Y gastric bypass (LRYGB) would be even greater given the procedure results in increased hospital stay and procedure time.

The study authors state that previous studies that have examined the cost of bariatric surgery have relied on a comparison sample of those with a morbid obesity (MO) diagnosis code, despite the fact that this high cost group might not be a true reflection of patients who eventually have LAGB or LRYGB procedures. As a result, this study re-estimated the net costs and time to recuperate the costs using an alternative sample that does not rely on the MO diagnosis code.

“Regardless of the time to breakeven, it is worth pointing out that the expectation for any surgical intervention to show a return on investment is unusual and few effective interventions reach this threshold,” the authors state. “LAGB, however, may be one of the exceptions.”

The analysis is based on claims data from the MarketScan Commercial Claims and Encounters database between January 2003 and September 31 2009. LAGB and LRYGB claimants were propensity score matched to two control samples: one restricted to those with a MO diagnosis code and one without this restriction. The random sample of 120,000 individuals was provided directly from Medstat.

Propensity score matching was used to ensure that the four groups were as similar as possible. LRYGB patients were matched to LAGB patients based on patient and health plan characteristics, and on diagnoses and costs in the year prior to the quarter before the bariatric procedure.

Using the four matched samples, an analysis dataset was created that included quarterly payments of total, inpatient (both facility and physician), non-inpatient (including payments for hospital outpatient, physician’s office visits, and emergency department), and prescription drug claims. Each quarter represented the time relative to (pseudo) band placement.

Results

A total of 9,631 patients (after matching), were including in each surgical group. The groups of patients are predominantly female and average 44 years old at the time of surgery. Approximately 25% have diabetes and the prevalence of comorbidities ranged from 8.4% for asthma to 44% for hypertension. Payments for the LAGB sample in the year before the quarter before surgery averaged US$9,971, whilst for LRYGB patients the payment was US$10,554.

The authors note that the MO sample is about three years older than the LAGB sample and has a smaller percentage of females (65.7% vs. 79.1%). They also report that although the prevalence of the included comorbidities is statistically lower than in the surgery samples, the annual costs are more than US$1,500 greater for the MO sample.

“This suggests that other differences are making this sample more expensive,” they claim.

Figures 1 and 2 provide graphical representations of the cost trends pre- and post- (pseudo) surgery for total, inpatient, outpatient, and pharmaceutical costs. The first (surgery) quarter, was not included as including this would reduce the scale to the extent that trends would not be observable. Costs for the LAGB and LRYGB samples in this quarter were US$21,980 and US$29,900 for the full sample and US$22,480 and US$31,150 for the diabetes subsample, respectively. These figures reveal a slight increase in costs for the surgery samples in the run-up to surgery.

In the second quarter, the researchers noted a reduction in costs primarily for pharmaceutical payments such as diabetes medications.

Figure 1: Full Sample – Mean Medical Expenditures By Quarter

Figure 2: Diabetes Subsample – Mean Medical Expenditures By Quarter.

“Costs for the MO sample immediately escalate post pseudo surgery, largely driven by a sharp increase in inpatient costs, thus revealing significant underlying differences between this and the matched random sample,” the authors state. “This increase in MO costs is driven by higher rates of admissions. Roughly one-third of the MO sample had an admission post pseudo-surgery, whereas this figure is 10% for the remaining samples.”

When compared to the MO sample, costs for LAGB and LRYGB appear to be fully recovered in 1.5 (CI 1.45 to 1.55) and 2.25 years (CI: 2.07 to 2.43), respectively. Subsequently, the authors claim that these procedures appear to generate “significant savings” at five years: US$78,980 (CI: $62,320 to US$100,550) for LAGB and US$61,420 (CI: US$44,710 to US$82,870) for LRYGB.

Some of the difference in savings between the two procedures results from the higher estimated surgical costs for LRYGB (US$16,680 vs. US$22,140). The outcomes are more significant for the diabetes subsample, with costs fully recovered in 1.25 (CI: 1.02 to 1.48) years for LAGB and 1.75 (CI: 1.49 to 2.01) years for LRYGB and even larger estimated savings at five years; US$127,590 (CI: US$94,840 to US$167,590) for LAGB and US$103,340 (CI: US$65,550 to US$146,760) for LRYGB.

  

Time to Breakeven (Years)

  

  

5-year Net Costs (United States Dollars)

  

  

Morbid Obese Sample

  

  

Sample

  

  

LAGB

  

  

LRYGB

  

  

LAGB

  

  

LRYGB

  

Full sample

1.5 (1.45 1.55)

2.25 (2.07 2.43)

−78,980 (−100,550-62,320)

−61,420 (−82,870-44,710)

Diabetes subsample

1.25 (1.02 1.48)

1.75 (1.49 2.01)

−127,590 (−167,590-94,840)

−103,340 (−146,760-65,550)

Random Sample

Sample

LAGB

LRYGB

LAGB

LRYGB

Full sample

5.25 (4.25 10+)

10+

690 (−6,800 8,400)

18,940 (10,390 26,740)

Diabetes subsample

4.25 (3 10+)

10+

−3,060 (−13,230 7,930)

21,610 (3,330 42,570)

Table 3: Time to Breakeven and Net Costs for Full and Diabetes Samples.

However, when comparisons are made to the matched random sample the estimated time to recover the costs of a LAGB procedure increases to 5.25 (CI: 4.25 to 10+) years for the full sample. Five-year net costs (not savings) are US$690 (CI: $-8,400 to $6,800). For LRYGB net costs at five years are US$18,940 (CI: $10,390 to $26,740). Based on projections, it would take more than ten years to recover the costs of the LRYGB procedure.

Regarding the diabetes subsample, when compared to the matched random sample the estimated time to recover the costs of a LAGB procedure is 4.25 (CI: 3 to 10+) years and five-year net costs are now negative, revealing a savings of US$3,060 (CI: US$-7,930 to US$13,230). For LRYGB, the net costs remain positive (i.e., no savings) at five years; US$21,610 (CI: US$3,330 to US$42,570) and, based on projections, it would again take more than ten years to recover the costs of the procedure.

The authors state that any return on investment for bariatric surgery depends on three factors:
1) the cost of the surgical procedures
2) the subsequent cost profile among those who undergo the procedure
3) what their costs would have been in the absence of the surgical intervention.

“Regardless of the time to breakeven, it is worth pointing out that the expectation for any surgical intervention to show a return on investment is unusual and few effective interventions reach this threshold,” the authors state. “LAGB, however, may be one of the exceptions.”

“These results reveal that the net costs and time to breakeven resulting from bariatric surgery are less favourable than has been reported in prior studies,” they conclude. “Yet, even with a more conservative and likely more accurate comparison sample, the business case for LAGB appears favourable. Regardless, the decision of which procedure is right for a given individual depends on many factors, although cost is likely to be a significant consideration.”

The study authors were Eric A Finkelstein (Health Services and Systems Research, Duke-NUS Graduate Medical School, Singapore, Singapore, Global Health Institute, Duke University, Durham, North Carolina, USA), Benjamin T Allaire (RTI International, Durham, North Carolina, USA), Denise Globe (Global Health Outcomes Strategy and Research, Allergan Inc., Irvine, California, USA) and John B Dixon (Department of General Practice, School of Primary Health Care, Monash University, Melbourne, Australia, Human Neurotransmitters Laboratory, Vascular and Hypertension Unit, The Baker-IDI Heart and Diabetes Institute, Melbourne, Australia).

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