Cost benefits of weight loss

Cost benefits of weight loss

A panel discussion on the personal financial costs and benefits of weight loss surgery for Australians who are clinically obese.

Despite the growing popularity of weight loss surgery and its expanding evidence base, many clinically obese Australians continue to put barriers between themselves and a serious contemplation of surgery as an option.

Through 2009 and 2010 – as the impact of the global financial crisis began to affect Australian consumers more directly – another barrier started to infiltrate the early conversations between clinically obese people and the healthcare professionals whose job it was to help them find a solution.

That barrier was cost

For what seemed like the first time, Australians were expressing concern about the financial implications of deciding to have weight loss surgery. They began to weigh up the costs associated with out-of-pocket expenses and hospital fees with the potential longer-term benefits of a successful outcome.

In late March 2011 an expert panel of a surgeon (Dr Lilian Kow), a health economist (Lynne Pezzullo) and a diabetes educator (Marg McGill) met in Sydney to explore the latest data, reflect on consumer attitudes and crunch the numbers on the cost and benefits of weight loss surgery for people who are clinically obese.
So how do we balance the substantial lifestyle and financial benefits with the unarguable out-of-pocket costs?

What does the health economic cost/benefit equation look like for the weight loss surgery?

Lynne Pezzullo: We’ve estimated the cost of obesity in a previous report by Access Economics that showed in 2008 the financial costs were around $8.5 billion per annum across the country. About 21% of diabetes is due to obesity and 25% is due to cardiovascular disease. 24% of osteoarthritis is due to obesity and about 20% of bowel and breast cancer, two of the most common forms of cancer, are due to obesity and that is why the health system expenditure is so great.

For each individual, those health system expenditures are about $600 per person per year. It is a huge cost.

A lot has been written about the ’macro-economic cost to the community of obesity. There’s been less focus on these costs at an ‘individual’ level. The panellists took up the challenge. 

Lynne Pezzullo: We’ve estimated the cost of obesity in a Dr Lilian Kow: Recent market research shows that one of the problems is that patients are not coming to have their weight addressed. This is sometimes because of the perceived cost, particularly of surgery. They do not see the health benefits of surgery or the health benefits of weight loss. What is your view of that?

Lynne Pezzullo: Well I think it is a case of doing some cost benefit analysis. A lot of people who are already obese may have a related condition like diabetes or high blood pressure. That means that their personal costs are already beginning to impact on their lives. They might be spending on average $600 per year in health system expenditures and there is probably a loss of income of on average $1000 a year. There is the cost of their carers and their family taking time off to accompany them to visits to hospitals; there is a productivity cost there. There is also the cost of loss of healthy life, which is around $19,000 per annum. In contrast there is the cost of having the surgery. By having the surgery one can reduce their weight… potentially by 50% or more. So it’s very important to weigh up the benefits from reducing all those costs of obesity itself and obesity related conditions against the costs of surgery. If you compare the costs, the cost benefit analysis can be very positive.

Dr Lilian Kow: How long do you think it takes after surgery for the cost benefit to become evident?

Lynne Pezzullo: The cost effectiveness analysis that we’ve reviewed in the literature shows that bariatric surgery is highly cost effective across all types of bariatric surgery. That means that the surgery eventually pays for itself. For different people that time period can vary. Overall it’s probably about 3.5 years before the bariatric surgery has paid for itself.

Dr Lilian Kow: So Lynne, why should a suitable, clinically obese person spend the money on weight loss surgery?

Lynne Pezzullo: A lot of people look at the up front costs and decide that it needs a lot of thought. They need to think about the financial costs that weight loss surgery can help them avoid by reducing the medical costs associated with the complications of obesity.

Dr Lilian Kow: One of the examples I can give is that a number of my patients are on waiting lists for knee replacements and once they start losing weight from the surgery they no longer need a knee replacement. That is a huge saving not just for the individual, but also for the government and the health fund.

Lynne Pezzullo: There are also the costs that people may not even consider when thinking about the cost of weight loss surgery. We know that risk of cancer is doubled if you are obese and people may not take into account all the complications that they could get if they remain obese… A lot of them are hidden benefits. We know that obesity occurs most in middle age and the reason why there is not a lot of obesity in people in their sixties and seventies is because once people get to that stage they have either lost the weight, or they have died, which is a very sad consequence, but the data supports that mortality from obesity related complications is very high in that age group.

Dr Lilian Kow: Another thing I have also noticed in the population is that people are not aware that obesity shortens their life expectancy.

Lynne Pezzullo: Yes, unfortunately one of the major complications and increased risks for obese individuals is risk of bowel cancer, breast cancer, uterine cancer and kidney cancer and these forms of cancers come with substantial mortality rates. Obesity can shorten your life. Across society the financial costs are about $8.5 billion but for an individual they incur costs of about $19,000 per annum. A large chunk of that cost is actually the value of their loss of healthy life but a substantial proportion is also the out-of-pocket costs that come from being obese and having the various clinical conditions associated with obesity.

The treatment for diabetes, the treatment for cardiovascular disease, the trips to the doctor, the osteoarthritis medication; all those out-of-pocket costs can really add up for the person that is obese. When they are thinking about bariatric surgery they also need to think about how they can save on the other side of the equation.

You have to take a long-term view because weight loss surgery doesn’t pay for itself immediately but it does pay for itself further down the track… On average it takes only about 4 years for the surgery to pay for itself.

They don’t think about lost income. If you are unfortunately diagnosed with bowel cancer or breast cancer, which are partly attributable to being obese, the costs of being off work for many weeks and having the therapies associated with cancer can really hit people’s hip pockets.

How do we go about educating consumers on the personal financial equations for weight loss surgery?

Marg McGill: The cost of surgery can be a barrier, especially if they are thinking in the short term. In this case I often tell them it is not just about now, it is about the future and what they will be able to achieve in the future. Economically, as Lynne has said, after the surgery they are able to go back to work and maintain a job because their health has improved.

Lynne Pezzullo: Quality of life also has value that people quite often don’t think of, but in health economics it is quite often the increased quality of life that is the most valuable benefit from weight loss. When people start to envisage all those possibilities, they can see the benefits. The long-term view emerges and it is not just about the immediate financial costs of the surgery or the fear of change, it’s actually about all the benefits that flow from having the procedure.

The last word

Lynne Pezzullo: You have to take a long-term view because weight loss surgery doesn’t pay for itself immediately but it does pay for itself further down the track.

Marg McGill: What I say to patients when they ask me about weight loss surgery is, first of all, good on you for even asking about this because weight loss is important. You do need to think about this because it is a long-term commitment; its not a magic wand, it’s a tool and you still will need to have lifestyle changes, but it is a great step forward.

Dr Lilian Kow: Financially patients who have benefited from weight loss surgery feel better in themselves. As they start losing weight, they get more confident in themselves and in their professional lives and quite often also change jobs for the better and therefore, their quality of life improves.

About the participants

Dr Lillian Kow (Facilitator)

Dr Lilian Kow is a senior consultant surgeon at the Flinders Medical Centre and President of the Obesity Surgery Society of Australia and New Zealand. Dr Kow has trained surgeons in Australia and internationally in bariatric surgery. Dr Kow and her team at Flinders Medical Centre introduced the Swedish Adjustable Gastric Band to Australia and is one of the founders of the national ‘Circle of Care’ clinics.

Lynne Pezzullo

Partner of Deloitte’s Health Economics and Social Policy group. Her special interests include cost benefit and cost effectiveness analysis, workforce issues, occupational health and safety, health research, rural health, mental health, women’s health and intergenerational financing.

Marg McGill

Marg McGill is an Adjunct Associate Professor Sydney Medical School, Sydney Nursing Hospital and the manager of the Diabetes Centre at Royal Prince Alfred Hospital in Sydney and is a former Senior Vice-President of the International Diabetes Federation (IDF)