Economic Impact of the Clinical Benefits of Bariatric
Surgery in Morbidly Obese Patients with Diabetes:
An Observational Study
Samuel Klein, M.D.;1 Arindam Ghosh, PhD;2 Pierre-Yves
Cremieux, PhD;2,3 Sara Eapen, PhD;2 Tamara J. McGavock, BA2
1
Center for Human Nutrition, Washington University School of Medicine in St. Louis
2
Analysis Group, Inc., Boston, Massachusetts, USA
3
Université du Québec à Montréal, Montréal, Québec, Canada
Prepared for: First Canadian Summit on Metabolic Surgery for Type II Diabetes
May 7, 2010
Preliminary – Do Not Cite Without Permission from Authors
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Disclaimer

Sponsored study funded by Ethicon Endo-Surgery, Inc

Ethicon Endo-Surgery, Inc. has no independent knowledge concerning the
information contained in this article, and findings and conclusions expressed
are those reached by the authors

This presentation is the work of the author and may not necessarily reflect the
views of Ethicon Endo-Surgery, Inc.
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Background


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

In 2007, the prevalence rate of diabetes in the US was 7.8%, affecting 12
million men and 11.5 million women1
Estimated yearly costs of managing a diabetes patient ($13,243) are more
than five times that of a patient without diabetes ($2,560)2
The estimated annual total economic cost of diabetes in the US was $174
billion in 2007 – $116 billion in medical expenditures and $58 billion in
reduced productivity
Obesity is a major risk factor for type II diabetes,3 and the risk of diabetes
increases directly with body mass index (BMI)4
Diabetes-related costs represent a disproportionate share of healthcare
costs among the obese5
Weight loss is an important therapeutic goal in obese patients with type II
diabetes, because even moderate weight loss (5%) improves insulin
sensitivity6
Bariatric surgery is the most effective weight loss therapy and has
considerable beneficial effects on diabetes7,8,9
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Effect of Bariatric Surgery on Comorbidities
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Days -90 to
0
FIRST CANADIAN SUMMIT
Days 30 to
120
Days 120 to Days 210 to Days 300 to Days 390 to Days 480 to Days 570 to Days 660 to Days 750 to Days 840 to Days 930 to
210
300
390
480
570
660
750
840
930
1020
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Obesity and Other Hyperalimentation
Hypertensive Disease
Ischemic Heart Disease and Cardio Myopathy
Cardiovascular Disorders
Days 1020
to 1110
Page 3
Effect of Bariatric Surgery on Comorbidities
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Days -90 to
0
Days 30 to
120
FIRST CANADIAN SUMMIT
Days 120 to Days 210 to Days 300 to Days 390 to Days 480 to Days 570 to Days 660 to Days 750 to Days 840 to Days 930 to
210
300
390
480
570
660
750
840
930
1020
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Asthma
Sleeping Disorders
COPD and Other Respiratory Conditions
Mental Disorders
Days 1020
to 1110
Page 4
Effect of Bariatric Surgery on Comorbidities
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Days -90 to
0
Days 30 to
120
Days 120 to Days 210 to Days 300 to Days 390 to Days 480 to Days 570 to Days 660 to Days 750 to Days 840 to Days 930 to
210
300
390
480
570
660
750
840
930
1020
Days 1020
to 1110
Diseases of the Digestive System
Diseases of the Musculoskeletal System and Connective Tissue
Diabetes Mellitus
Disorders of Lipoid Metabolism
Acute and Chronic Sinusitis, Allergic Rhinitis
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Effect of Bariatric Surgery on Comorbidities
900%
800%
700%
600%
500%
400%
300%
200%
100%
0%
Days -90 to
0
Days 30 to
120
Days 120 to Days 210 to Days 300 to Days 390 to Days 480 to Days 570 to Days 660 to Days 750 to Days 840 to Days 930 to
210
300
390
480
570
660
750
840
930
1020
Anemia
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Days 1020
to 1110
Nutritional and Mineral Metabolism Disorders
Page 6
Objective

To estimate the economic impact of the clinical benefits of bariatric surgery
on medical costs and return on investment (RoI) of the surgery in morbidly
obese diabetes patients
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Data Source



De-identified health insurance and disability claims from approximately 8.5
million employees, spouses, and dependents from 40 large companies
throughout the U.S.
Time period covered: January 1, 1999 - December 31, 2007
The database includes:
•
•
•
•
•
•
•
Outpatient medical services (including diagnoses and procedures)
Inpatient medical services (including diagnoses and procedures)
Outpatient prescription drug dispensing records
Demographics
Enrollment history
Billed charges
Insurance payments
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Methods
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Sample Selection

Patients with diabetes at baseline, were identified using the following
criteria:
•
•
•
•
•
•
At least one bariatric surgery claim (HCPCS codes: 43770, 43644, 43645, 43845,
43846, 43847, 43842, 43843, S2085, S2082, S2083) for surgery patients. No
bariatric surgery claim for control patients*
The date of the first such claim was identified as the date of surgery (index date)
At least one medical claim with the diagnosis of morbid obesity (ICD-9-CM:
278.01) anytime prior to index date
At least six months of continuous enrollment prior to the initial date of index and
one month following**
Age between 18 and 65 as of the index date
Diabetes diagnosis prior to index date
* For surgery eligible controls, the index date is their matched patient surgery date.
** The average patient length in the sample was 18 months.
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Identifying Patients with Diabetes

Following Pladevall et al.,10 patients were classified as having diabetes if both
of these were true in the months five through two prior to index date
•
≥ 1 medical claim for any of these conditions
o Diabetes (ICD-9-CM 250.xx)*
o Dyslipidemia (ICD-9-CM 272.xx)
o Hypertension (ICD-9-CM 401.xx-405.xx)
•
≥ 1 drug claim for anti-diabetic medications
*Includes type I and II diabetes
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Matching Diabetic Surgery and Control Patients

Each diabetic surgery patient was matched to a diabetic control on the
following socio-demographic and comorbid characteristics:
•
Age group (18-30, 31-40, 41-50, and 51-60) as of index date
•
Gender
•
Other Comorbidities (Asthma, Coronary Artery Disease, Gall Stones,
Gastroesophageal Reflux, NASH/NAFLD, Sleep Apnea, Urinary Incontinence)
•
State of residence
•
5-month pre-surgery direct costs (excluding month prior to index date)
•
In case of multiple matches, we randomly selected one
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Methods: Calculation of ROI
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The cost associated with bariatric surgery (“investment”) is estimated from
the incremental costs incurred during the surgery hospital stay, and,
typically, in the month prior to the surgery, and the two months after surgery
Cost savings from bariatric surgery are calculated as the difference in direct
costs between bariatric surgery patients and their controls
The ROI is the ratio of cost savings to the initial surgery investment cost
Both the cost associated with bariatric surgery and the associated cost
savings are estimated using a multivariate analysis
Monthly medical costs were normalized to December 2008 dollar value by
first deflating by the CPI-MC (medical care consumer price index) and
discounting by the 3-month T-bill rate of 3.22%
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Calculating an ROI (contd.)

The normalized monthly costs were regressed (using a Tobit model with
cluster option) on an indicator variable for bariatric surgery interacted with a
number of time indicator variables:
•

Three to Six Months Prior to Surgery; Month Prior to Surgery; Time of Surgery;
Two Months Post Surgery; Three to Six Months Post Surgery; Seven to Twelve
Months Post Surgery; Thirteen to Eighteen Months Post Surgery; Nineteen to
Twenty-Four Months Post Surgery; Twenty-Five Months or More Post Surgery
Additionally, the multivariate model also controls for:
•
•
Age
A number of comorbidities which were not used for matching in the first step
including breast cancer, congestive heart failure, lymphedema, major depression,
osteoarthritis, polycystic ovary syndrome, pseudo tumor cerebri, and venous
stasis/leg ulcers
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Outcome Measures

Three outcome measures were compared between diabetic surgery and
control patients post index date
•
•
Total medical costs
Diagnostic claims for diabetes, where diabetes is defined using the definition in
Pladevall et al.

•
•
Frequency and pattern of use of anti-diabetic medication

Non-Insulin medications including Sulfonylureas, Biguanides, Alpha-Glucosidase
Inhibitors, Meglitinides, Thiazolidinediones, DPP-4 Inhibitors, Incretin Mimetics,
Synthetic Amylin Analogs

Insulin medications
Adjusted average total anti-diabetic drug costs including supplies post index date


Trend in diabetes diagnostic claims was calculated using the percentage of available
patients satisfying the diabetes definition post index
Calculated as the total of the amounts covered by both insurance and co-pay for each
prescription fill
Outcomes between surgery and control patients were compared using chi
squared tests for categorical measures and Wilcoxon rank sum tests for
continuous measures
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Results
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Results: Baseline Comorbidities
(Patients vs. Controls 6 months prior to surgery date)
Surgery
Patients
(N=808)
Control
Patients
(N=808)
53 (47-57)
72.8
53 (47-59)
72.8
100
21.7
100
21.7
Coronary Artery Disease
7.8
7.8
Gastroesophageal Reflux
6.6
6.6
Asthma
3.2
3.2
Gall Stones
0.6
0.6
NASH/NAFLD
0.1
0.1
0.1
0.1
10.9
9.3
11.9
5.1
Congestive Heart Failure
3.5
4
Lymphedema
0.5
0.2
Polycystic Ovary Syndrome
0.5
0.5
Breast Cancer*
0.4
1.7
Venous Stasis and Leg Ulcers
0.2
0.4
Pseudo Tumor Cerebri
0.1
0.1
Baseline Characteristics
Demographic Characteristics
Age on Index Date (Median [IQR])
Female (%)
Matched Comorbidities (%)
Diabetes
Sleep Apnea
Urinary Incontinence
Other Comorbidities (Controlled for in Multivariate Analysis)
Osteoarthritis
Major Depression *
*Significant at the 95% level
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Results: Baseline Health Care Utilization and Costs
(Patients vs. Controls 6 months prior to surgery date)
Surgery Patients
Control Patients
(N=808)
(N=808)
Inpatient Visit *
23.1
8.5
ER Visit *
13.2
17.1
Outpatient Hospital Visit *
90.8
67.5
Office Visit
99.9
99.4
Use of Medication for Weight Loss
1.5
1.6
Drug Costs *
1,231 (680-2,005)
1,450 (790-2,656)
Medical Costs *
1,579 (585-3,422)
878 (358-2,370)
3,209 (1,828-5,192)
2,842 (1,516-5,262)
Health Care Utilization (%)
Health Care Costs ($, median [IQR])
Total Health Care Costs
*Significant at the 95% level
Cost are calculated based on months -6 to -2.
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Results: ROI to Bariatric Surgery, Multivariate Analysis1
Dependent Variable: Direct Monthly Costs ($) 2
All Surgeries
Open Surgeries
Open Surgeries
Laparoscopic
1999-2007
1999-2003
2004-2007
2004-2007
(N=808)
-199*
(N=246)
-199
(N=204)
49
(N=358)
-221
Month Prior to Surgery
1,038*
1,000*
759*
1,157*
Time of Surgery
21,247*
25,623*
23,148*
17,092*
Month One and Two Following Surgery
1,516*
2,246*
2,469*
438*
Months Three to Six Following Surgery
-500*
-416
-615*
-464*
Months Seven to Twelve Following Surgery
-615*
-597*
-776*
-496*
Months Thirteen to Eighteen Following Surgery
-641*
-806*
-643*
-470
Months Nineteen to Twenty-Four Following Surgery
-1,231*
-1,286*
-1,434*
-1,013*
Months Twenty-Five and Longer
-1,019*
-1,095*
-1,267*
-1,257*
Months Six to Two Prior to Surgery
1.
2.
*
The multivariate model controls for age, gender, and the following comorbidities: breast cancer, congestive heart failure, lymphedema, major depression,
osteoarthritis, polycystic ovary syndrome, pseudo tumor cerebri, and venous stasis/leg ulcers.
There are no procedure codes that break out laparoscopic surgery until 2004.
Significant at the 5% level
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Results: RoI to Bariatric Surgery for U.S. Diabetes Population,
Multivariate Analysis (Mean and 95 Percent Confidence Interval)
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Results: ROI to Bariatric Surgery, All Patients
70
64
Months to Full Recuperation of Cost (RoI=1)
60
50
51
51
46
45
42
40
48
45
42
40
39
36
33
30
32
29
20
10
0
$25,667
All Surgeries
1999-2008
$31,246
$20,324
Open Surgery
2003-2008
All Laparoscopic
Surgeries
2004-2008
$25,362
Laparoscopic Bypass
Surgery
2004-2008
$15,795
Laparoscopic Band
Surgery
2004-2008
*Total Direct Medical Costs in December 2008 dollars. Inflated to 2008 dollars using CPI-MC (medical care consumer price index) and grown at a rate of 3.22%.
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Diagnostic Claims for Diabetes
(Diabetes Diagnosis)
Solid Line = Control Patients
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Dotted Line = Surgery Patients
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Trend of Diabetes Medication Claims
(Prescription Fill)
Solid Line = Control Patients
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Dotted Line = Surgery Patients
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Trend of Diabetes Medication Claims
Pre-Index Insulin Claimants
Black = Insulin
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Striped Lines = Non-Insulin
Medication
White = No Medication
Page 24
Trend of Diabetes Medication Claims
Pre-Index Non-Insulin Medication Claimants
Black = Insulin
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Striped Lines = Non-Insulin
Medication
White = No Medication
Page 25
Adjusted Diabetes Medication and Supply Costs
Solid Line = Control Patients
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Dotted Line = Surgery Patients
Page 26
Conclusions
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Conclusion on Economic Outcomes
 The initial investment averaged approximately $25,000 for all surgeries 19992007, $31,000 for open surgeries 1999-2003, $29,000 for open surgeries
2004-2007, and $19,000 for laparoscopic surgeries 2004-2007.
 When the comorbidities and demographic factors are controlled for, initial
investment is returned within:
•
•
•
•
30 months for patients who undergo any type of bariatric surgery.
29 months for patients who undergo open surgery.
26 months for patients who undergo laparoscopic surgery.
Cost savings associated with surgery started accruing at month 3.
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Conclusion on Clinical Benefit Outcomes
 For diagnostic claims of diabetes, by the first three-month period after surgery, 40.7% of surgery
patients had a diabetes related claim compared to 72.1% of control patients (p<.001).
•

By the first three-month period post-index, 45.6% of surgery patients had filled a prescription for
diabetes medication in the previous 3 months, compared to 90.8% of control patients.
•


At month 6, the percentages were 33.5% and 89.7%, respectively (p<.001).
Among patients who had insulin claims prior to index date, insulin claims dropped to 42.8% for
surgery patients and remained at 92.4% for control patients at month 3 after index (p<.001).
Among surgery patients who had claims for non-insulin diabetes medications prior to surgery,
37.3% had claims for non-insulin medications at month 3, compared with 86.3% of control patients
(p<.001).
•

By month 6, only 28.2% of surgery patients reported a claim of diabetes versus 73.5% of control patients
(p<.001)
84.5% of surgery patients who had claims for non-insulin medication at index had no claims for any diabetes
medications by month 36.
By the first three-month period after index, the average total cost of diabetes medications and
supplies for surgery patients was $33, compared to $123 for control patients.
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Conclusions
 Bariatric surgery has a large, statistically significant and sustained positive
effect on diabetes within six months, in obese patients.
•
Surgery patients appear to have resolution or more durable control of their
diabetes compared to controls, as evidenced by their switching patterns of antidiabetic medications, post index date.
 The results of this study demonstrate that the clinical benefits of bariatric
surgery in morbidly obese diabetes patients translate into considerable
economic benefits.
 These data indicate that surgical therapy is clinically more effective and
ultimately less expensive than standard therapy for morbidly obese diabetes
patients.
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References
1. National diabetes fact sheet: United States, 2007. CDC Diabetes. 2007.
2. Campbell RK, Martin TM. The chronic burden of diabetes. Am J Manag Care. 2009;15:S248-S254 .
3. Ford ES, Williamson DF, Liu S. Weight changes and diabetes incidence: findings from a national cohort of US adults. Am J
Epidemiology 1997;146:214-222.
4. Colditz GA, Willett WC, Rotnitzky A, Manson JE. Weight gain as a risk factor for clinical diabetes mellitus in women. Ann Intern
Med 1995;122:481-486.
5. Cawley, J, Rizzo, J, Gunnarsson, C, Haas, K. The health care cost effects of diabetes among obese and morbidly obese adults
in the United States. Poster presented at International Society of Pharmacoeconomic Outcomes Research (ISPOR) 13th Annual
International meeting. Toronto, ON, Canada.
6. Wing RR, Koeske R, Epstein LH, Nowalk MP, Gooding W, Becker D. Long-term effects of modest weight loss in type II diabetic
patients. Arch Intern Med 1987;147:1749-1753.
7. Pories WJ, Swanson MS, MacDonald KG, Long SB, Morris PG, Brown BM, Barakat HA, deRamon RA, Israel G, Dolezal JM,
Dohm L. Who would have thought it? An operation proves to be the most effective therapy for adult-onset diabetes mellitus. Ann
Surg 1995;222(3):339-352.
8. Dixon JB, O’Brien PE, Playfair J, Chapman L, Schachter LM, Skinner S, Proietto J, Bailey M, Anderson M. Adjustable gastric
banding and conventional therapy for type 2 diabetes. JAMA 2008; 299(3):316-323.
9. Schauer PR, Ikramuddin S, Gourash W, Ramanathan R, Luketich J. Outcomes of laparoscopic roux-en-Y gastric bypass for
morbid obesity. Ann Surg 2000;232(4):515-529.
10. Pladevall M, Williams LK, Potts LA, Divine G, Xi H, Lafata JE. Clinical Outcomes and Adherence to Medications Measured by
Claims Data in Patients With Diabetes. Diabetes Care, 2004, Vol 27; Part 12, pages 2800-2805.
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Pierre Cremieux
Managing Principal
Analysis Group, Inc.
111 Huntington Avenue
Boston, MA 02199
617-425-8135
pcremieux@analysisgroup.com
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