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Use And Costs Of Bariatric Surgery And Prescription Weight-Loss Medications

Abstract

 
The extent of use of bariatric surgery and weight-loss medications is unknown. Using the Nationwide Inpatient Sample, we estimate that the number of bariatric surgeries grew 400 percent between 1998 and 2002; such surgeries were performed on 0.6 percent of the 11.5 million adults clinically eligible in 2002. Hospital costs for bariatric surgery grew sixfold to $948 million in 2002. The inpatient death rate declined 64 percent. Among employers that covered weight-loss drugs in 2002, less than 2.4 percent of adults clinically eligible for these drugs used them, with average annual spending of $304 per user.

These bariatric treatments have substantial health benefits. A recent meta-analysis found that the percentage of excess weight loss was 61.6–70.1 percent with gastric bypass, the most common bariatric surgery. As a result, diabetes was completely resolved in 76.8 percent of patients.³ Another recent study found that gastric bypass patients had an 89 percent reduced relative risk of death.⁴

Although bariatric surgery is recommended only for morbidly obese persons with a body mass index (BMI) of 40 or more, bariatric drug therapy is recommended for obese people with a BMI of 30 or more.⁵ A recent meta-analysis found that bariatric medications result in a net weight loss of fewer than ten pounds (over the placebo weight loss) at one year, but this amount may still be clinically significant in reducing diabetes and high blood pressure.⁶

There are no national estimates of the use and costs of bariatric surgery and weight-loss prescription drugs. In this paper we address this data gap using national hospital and insurance claims data.

Study Data And Methods

Top Study Data And Methods Study Results Discussion And Policy... NOTES

 
Our first data source was the Nationwide Inpatient Sample (NIS) of the Healthcare Cost and Utilization Project (HCUP) for 1998 and 2002.⁷ The NIS is a nationally representative inpatient care database containing data from about 1,000 hospitals sampled to approximate a 20 percent stratified sample of U.S. community hospitals. Total charges reported in the NIS are used with hospital-specific cost-to-charge ratios to estimate hospital costs for bariatric surgeries.⁸

Our second source of data was the Medstat 2002 MarketScan Commercial Claims and Encounter Database, which contains claims for inpatient care, outpatient care, and prescription drugs for enrollees under age sixty-five in the employer-sponsored benefit plans of forty-five large employers across the country. The MarketScan data include 5.6 million people—a 3 percent sample of Americans with employer-sponsored health insurance coverage (5.1 million of these have drug coverage).

First, we used the NIS and the Medstat data to examine the use and costs of bariatric surgery. Next, we used the Medstat data to study use of and spending for prescription weight-loss medications.

Study Results

Top Study Data And Methods Study Results Discussion And Policy... NOTES

 
Bariatric surgery: use and costs. Exhibit 1 presents national estimates for use, total hospital costs, and cost per surgery by payer based on the NIS data. The total number of surgeries more than quadrupled, from an estimated 13,386 in 1998 to 71,733 in 2002. In 2002, privately insured patients accounted for 83 percent of surgeries, while Medicare, Medicaid, and self-pay accounted for 6, 5, and 3 percent, respectively. The remaining 3 percent were paid for by other government sources, a military plan for civilians, and charity.

Exhibit 2 presents national estimates of the number of surgeries, lengths-of-stay, and inpatient death rates, by age and sex. Focusing on 2002, patients ages 18–54 accounted for 88 percent of all surgeries, while the near-elderly (ages 55–64) accounted for 11 percent. Adolescents and the elderly accounted for the remaining 1 percent.¹⁰ The fastest growth in bariatric surgeries between 1998 and 2002—a tenfold increase—occurred among the near-elderly.

Women were more likely than men to undergo bariatric surgery in both years. In 2002 women accounted for 84 percent of all surgeries. However, both lengths-of-stay and inpatient death rates were higher among men. Although the inpatient death rate for men declined greatly between 1998 and 2002, it was still three times higher than the rate among women.

Based on national estimates of surgeries for 2002, we next estimated the prevalence of bariatric surgery among those who were clinically eligible.¹¹ Using the clinical guidelines described above, we estimated that there were at least 11.5 million adults eligible for bariatric surgery in 2002.¹² Adjusting for multiple surgeries per patient, we estimated that there were a total of 70,124 adult bariatric patients in 2002.¹³ Thus, of the 11.5 million adults who were clinically eligible for the surgery, only 0.6 percent received the surgery in 2002.

Bariatric surgery prices. Exhibit 3 presents use and spending by type of surgery, using the 2002 Medstat employer data. While Exhibit 2 presents hospital costs, Exhibit 3 presents the prices actually transacted. In 2002 the average price for a surgical procedure was $19,346. Physician payments accounted for 14 percent ($2,667), while hospital payments accounted for 86 percent ($16,679) of total payments.¹⁴ On average, patients paid 3.3 percent of expenditures in the form of copayments or deductibles, and health plans paid the remainder.

The less intensive banding, or gastroplasty without gastric bypass, accounted for 4 percent of surgeries, while Roux-en-Y gastric bypasses accounted for 84.7 percent. Other gastric bypasses made up 9.2 percent of surgeries, while revision-only surgeries accounted for the remaining 2 percent. Payments increased as surgeries became more advanced from banding/gastroplasty to Roux-en-Y to other gastric bypass. Also, doctors were paid more as the surgeries became more advanced.

We also found that payments varied by the type of health plan. For example, for Roux-en-Y, the average total payment was only $16,222 under capitated health maintenance organizations (HMOs). For fee-for-service plans, point-of-service HMOs, and preferred provider organizations (PPOs), the total payments were $17,749, $20,154, and $21,698, respectively. Length-of-stay was 3.9 days for all health plans.

Bariatric surgeries may be conducted in two ways. The non-laparoscopic approach requires the abdomen to be opened, while the laparoscopic method is a less invasive method in which surgeons, guided by a video camera, gain access to the abdomen through several small incisions. Fourteen percent of bariatric surgeries were laparoscopic (94 percent of these laparoscopies occurred in Roux-en-Y bypass). Laparoscopic surgeries were less costly than non-laparoscopic surgeries; however, doctors were paid 6 percent more for laparoscopy (Exhibit 3). Moreover, the patient’s out-of-pocket payment was 75 percent higher for laparoscopy.

Of all surgeries, 3.8 percent involved a revision; 2 percent had a revision during a follow-up surgery, and 1.8 percent, during the initial surgery. Surgeries with revisions were 37 percent more costly than surgeries without revisions (Exhibit 3).

Prescription weight-loss medications. As of 2002, eight drugs had been approved for weight loss. Of these, sibutramine (Meridia) and orlistat (Xenical) are approved for up to two years of use.¹⁶ The other medications are sympathomimetic amphetamine–like drugs: phentermine, phenylpropanolamine, benzphetamine, phendimetrazine, diethylpropion, and mazindol.¹⁷ These amphetamine-like drugs are labeled for short-term use (up to twelve weeks).¹⁸ Orlistat is a lipase inhibitor, which blocks fat absorption, while the other seven drugs are appetite suppressants.

Exhibit 4 presents prescription weight-loss medication use and spending among the 2002 Medstat employer sample. Of the 5.1 million with drug coverage, about 4 million had bariatric drug coverage. Of that 4 million, 21,931 used bariatric prescription drugs. Among the users, 45 percent used orlistat, 30 percent used sibutramine, and 35 percent used sympathomimetics (10 percent used multiple drugs). Close to 71 percent of the sympathomimetic prescriptions were for phentermine.

Patients spent an average of $304 each for weight-loss medications each year; patients paid 26 percent of this amount, and health plans, 74 percent. This annual total payment per person increased with age, from $192 per person for ages 8–17 to $361 for ages 55–64. Although only 22 percent of users were men, men spent more on average on the drugs than women ($327 versus $297), because men used these drugs longer than women (122 days versus 117 days per year) and because a greater proportion of men than women used the most costly drug, orlistat (44 percent versus 36 percent) (data not shown).

Finally, we estimated the prevalence of bariatric medicine use among obese adults with employer coverage for the drugs. From our 2002 MarketScan sample, we estimated that 918,000 non-elderly adults with bariatric drug coverage were clinically eligible to use bariatric prescription drugs.²⁰ However, only 21,797 (2.4 percent) of these adults took bariatric medications.

Discussion And Policy Implications

Top Study Data And Methods Study Results Discussion And Policy... NOTES

 
As bariatric surgeons perform more surgeries and outcomes continue to improve, it is likely that more people will opt for the surgery. This potential demand may be quite large since the number of bariatric surgeries has grown 400 percent in just five years. This growth will likely continue, given that only 0.6 percent of the 11.5 million eligible people underwent the surgery in 2002.²¹

Use of weight-loss medications declined in 1997 with the removal of fenfluramine and dexfenfluramine from the market (because of heart value abnormalities), but it picked up again in 1999, when orlistat entered the market.²² The industry reports that total U.S. sales for weight-loss medications in 2002 were $362 million.²³ In 2002 an estimated 63.3 million U.S. adults were clinically eligible for weight-loss medications but these drugs were used by less than 2.4 percent of those eligible. Thus, usage could greatly increase, given that many new, more effective prescription weight-loss medications are being developed.²⁴ Some of the new drugs in the pipeline, such as rimonabant (Acomplia), will block a pathway in the brain that produces the craving for food. In recent trials of rimonabant, 44 percent of subjects lost more than 10 percent of body weight at one year compared with 10 percent of subjects taking placebo.²⁵ Other new drugs will block the hormone ghrelin, which is sent from the stomach to the brain to create an appetite.²⁶ Some drugs will instead stimulate beta 3 receptors to increase fat burning within the body.²⁷ These new medications will likely increase the demand for weight-loss drug therapy.

For the elderly, the Medicare program covers bariatric surgery only for those patients with coexisting conditions such as diabetes.²⁸ The rate of increase in bariatric surgery between 1998 and 2002 was highest among the near-elderly (ages 55–64), at 900 percent. An estimated 395,000 elderly people (ages 65–69) will be clinically eligible for bariatric surgery in 2005.²⁹ By 2010 this number could grow to 475,000. Thus, if Medicare decides to expand coverage for bariatric surgery in the near future, the potential demand by the elderly may be quite large.

Bariatric drugs are not included in the final version of U.S. Pharmacopeial Convention (USP) Model Guidelines created under the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003. The act excludes agents used for weight loss. However, according to the final rules recently released by the Centers for Medicare and Medicaid Services (CMS), bariatric drugs can be covered by Medicare Part D if they are prescribed for a "medically accepted indication" such as morbid obesity. Thus, it is not yet clear to what extent the 500 potential drug plans in Medicare Part D will choose to include bariatric medications on their formularies. We estimate that about 3.3 million Medicare beneficiaries ages 65–69 will be clinically eligible for bariatric drugs in 2005.³⁰

Our results show a clear difference between the sexes in the use of bariatric treatments. We estimated that 43 percent of the adults clinically eligible for drug therapy in 2002 were men; however, only 22 percent of adults taking bariatric prescription drugs were men. In contrast, while 57 percent of those clinically eligible were women, women accounted for 78 percent of drug users. Also, 31 percent of adults eligible for bariatric surgery in 2002 were men, but only 16 percent of procedures among adults were performed on men.³¹ In contrast, while 69 percent of those eligible for surgery were women, women accounted for 84 percent of the surgeries. Moreover, men had worse in-hospital mortality rates than the women in their same age group. The higher inpatient mortality for men is consistent with higher coexisting illnesses or higher BMI at the time of surgery.³²

Editor's Notes

 
William Encinosa (wencinos{at}ahrq.gov) is a senior economist in the Center for Delivery, Organization, and Markets, Agency for Healthcare Research and Quality, in Rockville, Maryland; Claudia Steiner is a senior research physician there. Didem Bernard is a senior economist in the AHRQ Center for Financing, Access, and Cost Trends. Chi-Chang Chen is a postdoctoral fellow at the University of Maryland School of Pharmacy in Baltimore.

This research was funded by the Agency for Healthcare Research and Quality (AHRQ). The views herein do not necessarily reflect the views or policies of AHRQ, or the U.S. Department of Health and Human Services. The authors thank the thirty-five data organizations in states that contributed data to the Nationwide Inpatient Sample. They also thank the editors, two anonymous reviewers, and Scott Smith for their insightful comments.

NOTES

Top Study Data And Methods Study Results Discussion And Policy... NOTES

 

1. L. Bymark and R. Waite, Prescription Drug Use and Expenditures in California: Key Trends and Drivers (Oakland: California HealthCare Foundation, 2001).
2. Datamonitor, Commercial and Pipeline Perspectives: Obesity (London: Datamonitor, June 2004).
3. H. Buchwald et al., "Bariatric Surgery: A Systematic Review and Meta-Analysis," Journal of the American Medical Association 292, no. 14 (2004): 1724–1737.[Abstract/Free Full Text]
4. N.V. Christou et al., "Surgery Decreases Long-Term Mortality, Morbidity, and Health Care Use in Morbidly Obese Patients," Annals of Surgery 240, no. 3 (2004): 416–423.[ISI][Medline]
5. Bariatric surgery is also recommended for a BMI of 35 or more with serious medical conditions (such as severe sleep apnea, Pickwickian syndrome, obesity-related cardiomyopathy, or diabetes mellitus). Bariatric drug therapy is also recommended for a BMI of 27 or more with two or more comorbidities (such as hypertension, diabetes, or hyperlipidemia).
6. P. Shekelle et al., Pharmacological and Surgical Treatment of Obesity, Evidence Report/Technical Assessment no. 103, Prepared by the Southern California-RAND Evidence-based Practice Center, Santa Monica, Calif., under Contract no. 290-02-0003, Pub. no. 04-E028-2 (Rockville, Md.: Agency for Healthcare Research and Quality, July 2004).
7. Healthcare Cost and Utilization Project, "Databases," October 2003, www.hcup-us.ahrq.gov/databases.jsp (11 April 2005).
8. Cost-to-charge ratios are obtained from standard accounting files at the Centers for Medicare and Medicaid Services. For the estimation of costs in HCUP, see B. Friedman et al., "Practical Options for Estimating Cost of Hospital Inpatient Stays," Journal of Health Care Finance 29, no. 1 (2002): 1–13.
9. We used the Consumer Price Index for all urban consumers (CPI-U).
10. In fact, patients age sixty-five and older accounted for only 14 percent of Medicare bariatric surgeries in 2002 presented in Exhibit 1 (compared with 7 percent in 1998). Thus, patients under age sixty-five accounted for 86 percent of the surgeries covered by Medicare in 2002 (through the Medicare disability insurance program).
11. We did not include adolescents, since surgery is recommended for only a small subgroup: those at least age fifteen with a BMI of 50 or higher. See T.H. Inge et al., "Bariatric Surgery for Severely Overweight Adolescents: Concerns and Recommendations," Pediatrics 114, no. 1 (2004): 217–223.[Abstract/Free Full Text]
12. Of these adults, 10.6 million have a BMI of 40 or more. About 868,000 have a BMI between 35 and 40 with diabetes, the most common comorbidity that makes this group eligible for surgery. This is based on 2002 obesity rates for adults reported in A.A. Hedley et al., "Prevalence of Overweight and Obesity among U.S. Children, Adolescents, and Adults, 1999–2002," Journal of the American Medical Association 291, no. 23 (2004): 2847–2850.[Abstract/Free Full Text]Diabetes rates among the obese can be found in A.H. Mokdad et al., "Prevalence of Obesity, Diabetes, and Obesity-related Health Risk Factors, 2001," Journal of the American Medical Association 289, no. 1 (2003): 76–79.[Abstract/Free Full Text]
13. In the Medstat data presented in Exhibit 3, 2 percent of bariatric surgeries were follow-up surgeries. We applied this rate to bariatric surgeries for the national population presented in Exhibit 1.
14. The hospital prices in Exhibit 3 are for large employers, which tend to have generous benefits, while the cost estimates presented in Exhibit 1 are representative of the U.S. privately insured population as a whole. Therefore, we caution the reader against making direct comparisons of prices and costs across these exhibits.
15. R.E. Brolin, "Bariatric Surgery and Long-Term Control of Morbid Obesity," Journal of the American Medical Association 288, no. 22 (2002): 2793–2796[Free Full Text]; and R. Steinbrook, "Surgery for Severe Obesity," New England Journal of Medicine 350, no. 11 (2004): 1075–1079.[Free Full Text]
16. American Society of Health-System Pharmacists, AHFS Drug Information (Bethesda, Md.: ASHSP, 2004).
17. In November 2000, the FDA requested that phenylpropanolamine be removed voluntarily from the market. In our 2002 data, only 2 percent of bariatric drug claims were for this drug.
18. Mosby, Mosby’s Drug Consult, 14th ed. (St. Louis, Mo.: Mosby Inc., 2004).
19. Orlistat is recommended for one year, with treatment continued after one year if the patient tolerates the drug well and sustained weight loss is documented. D.C. Dale and D.D. Federman, eds., ACP Medicine (Danbury, Conn.: American College of Physicians, 2005). In a 104-week clinical trial, 12.9 percent of patients on orlistat dropped out of the study because of adverse effects and treatment failure.See J. Hauptman et al., "Orlistat in the Long-Term Treatment of Obesity in Primary Care Settings," Archives of Family Medicine 9, no. 2 (2000): 160–167.[Abstract/Free Full Text]
20. This is based on a 30.6 percent obesity rate among adults in 2002, reported in Hedley et al., "Prevalence of Overweight and Obesity."
21. This growth trend may be dampened by recent health plan decisions to drop coverage for bariatric surgery. Blue Cross and Blue Shield of Florida and Nebraska have recently dropped coverage. See R. Stein, "As Obesity Surgeries Soar, So Do Safety, Cost Concerns," Washington Post, 11 April 2004.Some health plans are instead carving out bariatric coverage as an optional benefit. Blue Cross and Blue Shield of North Carolina introduced a new benefit, Healthy Lifestyle Choices, designed specifically to deal with bariatric treatments. See B. McKay, "Blue Cross of North Carolina to Cover Cost of Treating Obesity," Wall Street Journal, 13 October 2004.
22. R.S. Stafford and D.C. Radley, "National Trends in Antiobesity Medication Use," Archives of Internal Medicine 163, no. 9 (2003): 1046–1050.[Abstract/Free Full Text]
23. Datamonitor, Commercial and Pipeline Perspectives: Obesity.
24. See J. Korner and L.J. Aronne, "Pharmacological Approaches to Weight Reduction: Therapeutic Targets," Journal of Clinical Endocrinology and Metabolism 89, no. 6 (2004): 2616–2621[Free Full Text]; J. Proietto et al., "Novel Anti-Obesity Drugs," Expert Opinion on Investigational Drugs 9, no. 6 (2000): 1317–1326[CrossRef][ISI][Medline]; and H. Bays and C. Dujovne, "Anti-Obesity Drug Development," Expert Opinion on Investigational Drugs 11, no. 9 (2002): 1189–1204.[CrossRef][ISI][Medline]
25. Korner and Aronne, "Pharmacological Approaches."
26. Bays and Dujovne, "Anti-Obesity Drug Development."
27. S. Vansal, "Beta-3 Receptor Agonists and Other Potential Anti-Obesity Agents," American Journal of Pharmaceutical Education 68, no. 3 (2004): 1–10.
28. Centers for Medicare and Medicaid Services, "National Coverage Decision 40.5: Treatment of Obesity," 1 October 2004, www.cms.hhs.gov/mcd/m_ncd.asp?id=40.5&ver=2 (11 April 2005).For tracking CMS updates to its bariatric surgery coverage, see www.cms.hhs.gov/mcd/viewncd.asp?ncd_id=100.1&ncd_version=1&basket=ncd%3A100%2E1%3AGastric+Bypass+Surgery+for+Obesity (11 May 2005).In 2004 the CMS removed the language "obesity itself cannot be considered an illness" from its manual. In late 2004 the CMS gathered the scientific evidence on bariatric surgery. Its next step is to decide whether to expand coverage for bariatric surgery to all morbidly obese elderly people, not just those with comorbidities.
29. This is based on a 3.9 percent morbid obesity rate for adults age sixty or older, reported in Hedley et al., "Prevalence of Overweight and Obesity."
30. This is based on a 32.9 percent obesity rate among adults age sixty or older, reported in ibid.
31. This is based on obesity rate estimates by sex in K.M. Flegal et al., "Prevalence and Trends in Obesity among U.S. Adults, 1999–2000," Journal of the American Medical Association 288, no. 14 (2002): 1723–1727.[Abstract/Free Full Text]
32. E.E. Mason, K.E. Renquist, and D. Jiang, "Peri-operative Risks and Safety of Surgery for Severe Obesity," American Journal of Clinical Nutrition 55, no. 2 Supp. (1992): 573S–576S.[Abstract/Free Full Text]

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