Update on Weight-Loss Surgery: 3 Current Trends

When you consider that, according to the American Society for Metabolic and Bariatric Surgery, just 1 percent of the nation's 15 million morbidly obese, who make up about one-third of the total population, have undergone weight-loss surgery, it's clear the market has a lot of growth ahead. Here are three trends experts say will help drive that growth.

1. More evidence of effectiveness
Weight-loss procedures are being proven effective at both curing disease processes and at saving employers and payors money.

"We're at this odd crossroads where there is definitely mounting evidence that weight-loss surgery is effective," says Kent Sasse, MD, the founder and medical director of the Western Bariatric Institute, a nationally recognized surgical weight loss center and ASBS Center of Excellence, and author of several books. And while many employers and insurers are trying to tighten the reins on spending, this evidence that it's cost-effective "will lead to expanded contracts. There's more information than ever that weight-loss surgery is an effective treatment for diabetes, for example, and more employers are better off covering weight-loss surgery than continuing to pay out indefinitely for treatment."

Here's a review of some recent studies.

• In the largest study of its kind, researchers looked at the healthcare costs of more than 3,000 patients who underwent bariatric surgery and found that the cost of the surgery — which ranged from $16,000 to $25,000 — was offset for payors within two to four years. The study, published in the September issue of the American Journal of Managed Care, was conducted by researchers at the University of Quebec at Montreal. It showed that insurers fully recovered the costs of laparoscopic gastric bypass after 25 months, and that the break-even for traditional bariatric surgery was 49 months. The study didn't assess gastric banding.

• Another study, published in 2008 in the Journal of the American Medical Association, showed that 73 percent of weight-loss surgery patients with Type 2 diabetes experienced complete remission of the disease after the procedure, compared with 13 percent of patients who were treated with conventional medicines, exercise and diet changes.

• A recent study reports bariatric surgery results in improvement of histopathological features of nonalcoholic fatty liver disease (NAFLD), an emerging problem related to the obesity epidemic one of the most common causes of liver disease in the nation. Complications of NAFLD, including steatosis (fat accumulation in liver cells), non-alcoholic steatohepatitis (NASH) and fibrosis appeared to improve or completely resolve in a majority of patients after bariatric surgery-induced weight loss, according to results of a study published in Clinical Gastroenterology and Hepatology, an official journal of the American Gastroenterological Association (AGA) Institute. NAFLD can progress to cirrhosis, end-stage liver disease and hepatocellular carcinoma.

Prevalence of NAFLD is estimated to be around 70 percent in obese individuals and 85 percent to 95 percent in patients with morbid obesity. The prevalence of NASH is as high as 18.5 percent in obese individuals and 33 percent in those who are morbidly obese. The pathophysiologic mechanisms of NAFLD have not been clearly elucidated as yet, but obesity and insulin resistance are considered to be the main causative factors, according to the AGA.

According to the study, bariatric surgery could cure these various stages of NAFLD: 91.6 percent of patients experienced improvement or resolution in steatosis; 81.3 percent achieved improvement or resolution of steatohepatitis; and 65.5 percent had improvement or resolution of fibrosis. The proportion of patients with complete resolution of NASH was 69.5 percent.

"All this evidence continues to accumulate, and the advocates for obesity treatment are motivated to fund these studies," says Dr. Sasse. "The evidence is simply compelling. In the next few years, we're going to see mounting data for more and more groups: for employees, for people with more kinds of diseases, for lower-BMI individuals, for adolescents. The data is going to continue to accumulate, and the surgery is only getting safer."

2. More coverage acceptance
"Each region is a bit different, but the atmosphere is generally positive," says Dr. Sasse. "Ever since Medicare found the data persuasive and began covering bariatric surgery, most insurers have followed suit."

In 2006, CMS expanded coverage of bariatric surgery for Medicare beneficiaries who receive one of four procedures — gastric bypass, open and laparoscopic Roux-en-Y gastric bypass, laparoscopic adjustable gastric banding, and open and laparoscopic biliopancreatic diversion with duodenal switch — in bariatric centers of excellence, as certified by the American College of Surgeons or the American Society for Bariatric Surgery, and as reported on the Medicare coverage Web site. To be considered for coverage, Medicare beneficiaries must have a BMI of 35 or higher and must have exhibited a serious health condition in addition to morbid obesity, such as hypertension, coronary artery disease, or osteoarthritis.

Because commercial insurers tend to look toward Medicare for their own coverage determinations and benchmarks, says Cindy Winkler, the COO of Bariatric Partners in Charlotte, N.C., CMS's continued attention to weight-loss surgery is overall a positive.

"Most major insurers — the Blues and others — are covering bariatric surgery now," says Mike Lipomi, MSHA, president of RMC MedStone Capital. "Patients with qualifying BMIs are often diabetic or have other disease processes, and payors have determined that when they pay for bariatric surgery, they get patients off medications for life immediately. Once the ball got rolling, insurance companies saw that the cost of treating other problems far outweighed the cost of surgery — it's better for the patients, their employers and the payors."

Further, Type 2 diabetes could soon join the list of co-morbidities, making it more likely that bariatric surgery will be viewed as a treatment for disease rather than simply a weight-loss technique. After an extensive evidence review, CMS announced this fall a proposal to revise its existing coverage policy for bariatric surgery to include type 2 diabetes as one of the co-morbidities CMS would consider in determining whether bariatric surgery would be covered for a Medicare beneficiary who is morbidly obese (an individual with a BMI of at least 35 is considered morbidly obese). However, the agency also proposed to not cover bariatric surgery when it is used to treat type 2 diabetes in beneficiaries with BMIs below 35.

"While recent medical reports claimed that bariatric surgery may be helpful for these patients, CMS did not find convincing medical evidence that bariatric surgery improved health outcomes for non-morbidly obese individuals," says the agency.

Despite this, the proposal is yet another signal that coverage for weight-loss surgery is widening in acceptance.

"I don't think the proposed coverage decision changes much," says Dr. Sasse. "I would expect CMS will revisit the issue as more data comes out; it's still fairly early in the accumulation of data regarding Type 2 diabetes. Our center just started a study on this in the last year or so, and the data so far makes me think it's very likely that the indications for weight-loss surgery will expand over time to include overweight people with diabetes, if we can really show it works for a high percentage of patients.

"Overall, the evidence is mounting better for insurers to liberalize the criteria. I predict Medicare will eventually cover weight-loss surgery for overweight patients with diabetes."

3. More direct-to-consumer marketing
Venture capital firms are increasingly backing bariatric ASCs, and the two makers of surgical devices for gastric banding procedures are engaged in "fierce competition," a formula that's turning a "once-controversial weight-loss procedure into the next big thing in elective surgery," according to a recent Wall Street Journal report.

"We are just at the beginning of major marketing campaigns for laparoscopic banding by two very large medical device companies, and I think it's going to have very potent affects on healthcare and ASCs and on how we treat obesity surgery," says Dr. Sasse. "In a few years' time, the idea that 100 million Americans qualify for outpatient laparoscopic band weight-loss procedures that are safe, private, non-invasive, effective, easy and relatively affordable will be much more accepted."

This spring, Johnson & Johnson launched a Web site (www.realizemysuccess.com) in advance of a media launch of its Realize gastric band, which received FDA approval in September 2007. The company's entry to the bariatric market, with its "small army of specialized sales people selling other bariatric surgery supplies and instruments" may have shifted the healthcare community's perception of the procedure, says the Journal:

"In recent months, J&J has been bringing obesity surgeons to weekend training sessions to teach them how to implant the device. Bariatric surgeons ... who once pooh-poohed banding say that J&J's efforts are validating banding as an option."

Allergan has, since November of 2006, taken to marketing its Lap-Band directly to consumers in national ad campaigns. When the ads first launched, the company saw a fivefold increase to its Web site almost immediately; and "sales of Lap-Band and other obesity-intervention devices soared 50 percent last year to $270 million, making them Allergan's fastest-growing product line."

With J&J entering the fold, Allergan is now stepping up efforts to maintain its first-in-the-market advantage, says the Journal. In addition to launching a new television campaign, the company has "signed a co-marketing pact with Covidient Ltd., J&J's largest competitor in the bariatric-surgery field. Covidien's sales force will scout out general surgeons interested in the banding business."

"The TV advertising has really helped spread the acceptance of the procedure," says Ms. Winkler. "The conventional wisdom is that you have to soften the market first with awareness. The device manufacturers have helped do that. But it remains to be seen whether the marketing they have done translates to the local surgery center. You really have to have a program that piggy-backs somehow, either that you have a link on one of the manufacturers' Web sites or that you establish a strong Web presence, or it's not going to provide you much of a boost."

Many centers are taking steps to establish themselves by going direct to consumer as well: A bevy of locally focused advertising from individual facilities and surgeons are furthering public recognition and knowledge of the procedure. These single-specialty facilities are often one of several backed by venture capitalists.

"We basically took the Lasik playbook and ran it for banding," says American Institute of Gastic Banding founder Peter Gottlieb in the Journal article; the Texas-based company runs the True Results chain of six bariatric ASCs.

"The biggest challenge is understanding that marketing piece, then providing a full stream of care, a holistic program between the physicians, the facilities and other supports," says Ms. Winkler.

Dr. Sasse follows up by noting that primary care physicians need to be brought into the care loop, because that's where the "marketing" of a weight-loss surgery program begins.

"Bariatric surgeons have to teach primary care physicians about what they offer and about the vocabulary for talking to their patients about this issue without sounding judgmental," he says. "Some patients might be angry and defensive, but others will be very, very receptive. It's a matter of our reaching out to the wider medical community to talk about this very serious medical problem that affects many patients, and their options for treating it. Whether patients decide that surgery is for them, or that they want to go down a different road, such as medically supervised weight loss, the key is to talk about it.

"It's the No. 1 health problem a lot of people face, and getting rid of the taboo of talking about it is the right thing to do."

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