Addressing the cost of bariatric surgery

There’s a cultural perception that bariatric surgery is the “easy way out.” It’s tempting to think of it as nothing more than an elective or cosmetic procedure that people rely on to avoid other tried and tested weight loss solutions like diet and exercise.

In reality, bariatric surgery is one of the most effective ways to address obesity and its related conditions, including diabetes, heart disease, arthritis, and high blood pressure. It’s so effective, in fact, that 45% of employers cover bariatric surgery for employees.

Why are they willing to foot the bill? While this type of surgery involves a (sometimes hefty) price tag upfront, it can help employers manage costs in the long run.

Employees who classify as obese, on average, incur higher medical costs than employees who don’t.

In 2021, people with large employer private health insurance coverage who were obese or overweight had an average of $12,588 in annual health costs. Those who didn’t have an obese or overweight diagnosis had an average of $4,699.

In short, obesity more than doubled the total healthcare costs.

Additionally, life insurance policies look at body mass index (BMI) as an indicator of overall health or underlying conditions, meaning employers often also pay more for life insurance for obese employees.

So, bariatric surgery is a way to mitigate two important things at once: the long-term health of the employee and substantial costs for the employer.

What is bariatric surgery?

Bariatric surgery (also frequently referred to as “weight loss surgery”) is a blanket term for a group of surgical procedures that address obesity and related conditions. As the American Society for Metabolic and Bariatric Surgery explains, there are several types of bariatric surgeries that fall under this umbrella.

Types of bariatric surgeries

• Sleeve Gastrectomy: Approximately 80% of the stomach is removed, making the stomach much smaller and able to handle only limited amounts of food and liquid.
• Roux-en-Y Gastric Bypass (RYGB): The stomach is divided into a smaller top portion while the larger part of the stomach is bypassed, meaning it no longer stores or digests food.
• Adjustable Gastric Band (AGB): A small silicone device is secured around the top part of the stomach to create a small pouch above the band where food will pass through but be limited by the band’s opening.
• Biliopancreatic Diversion with Duodenal Switch (BPD/DS): A small tube-shaped stomach pouch is created, and then a part of the small intestine is brought up and connected to the outlet of that newly-created stomach.
• Single Anastomosis Duodeno-Ileal Bypass with Sleeve Gastrectomy (SADI-S): Similar to a sleeve gastrectomy, except a loop of the intestine is connected to the new, smaller stomach.

 

There’s a lot of big, fancy medical terms there. But put simply, weight loss surgery helps manage obesity by making the stomach smaller—it’s just the mechanics of doing so that differs between the types of bariatric surgeries.

What are the benefits of bariatric surgery?

A smaller stomach means people feel full even after a small amount of food, making bariatric surgery one of the most effective ways to lose a lot of weight relatively quickly. Additionally, people who opt for a weight loss procedure see benefits beyond the number on the scale, including improvements in their quality of life, longevity, and obesity-related comorbidities (such as diabetes and cardiovascular diseases).

Bariatric surgery requirements

The advantages are compelling, but that doesn’t mean that bariatric surgery is the answer for everyone. The guidelines for who qualifies for these procedures are based on BMI. According to the Mayo Clinic, weight loss surgery is an option for an adult with a BMI of 40 or higher. It can also be an option for an adult who meets all three of these conditions:

• BMI of 35 or higher

• At least one obesity-related medical condition

• At least six months of supervised weight loss attempts

People who qualify for surgery will also undergo a pre-operative screening to confirm that they’re healthy enough to make it through surgery, as well as to rule out any other medical issues that could be contributing to obesity.

What is the cost of bariatric surgery?

The good news is that weight loss surgery is effective, but the bad news is that it’s also expensive. The cost of bariatric surgery can vary widely depending on factors like:

• Location (different cities have vastly different costs for surgeries)
• Inpatient or outpatient procedures (outpatient is less expensive but also less common)
• Complexity of the procedure (a duodenal switch is far more complicated than a gastric band)

That said, estimates can give you a general idea of the cost of bariatric surgery.

In 2021, the average cost of an inpatient bariatric procedure was $32,868. Outpatient was less expensive at $22,675.

However, outpatient is also far less common, with only 14% of bariatric surgeries classified as outpatient in 2021.

Why the cost of bariatric surgery is an issue for employers

With those big price tags, there’s no doubt that bariatric surgery is costly for employers—especially when health plans cover the bulk of the expense. But the cost alone isn’t the only reason that bariatric surgery has become a top area of spend. There are a few other factors contributing to skyrocketing spending.

Increasing obesity rates

Obesity prevalence has consistently risen since 1999, with only a temporary pause between 2009 and 2012. The share of people with obesity increased from 28% in 2011 to 34% in 2021. And, by 2030, 78% of American adults are projected to be overweight or obese.

The prevalence of severe obesity (BMI of 40+) is also increasing, from a rate of 4.7% in 2000 to 9.2% in 2018. That means more candidates for weight loss surgery.

More bariatric surgeries

It’s a simple math problem: More candidates means more surgeries, and more surgeries means more money spent on surgery. In 2016, there were 215,666 bariatric surgeries in the United States. By 2022, that number increased to 279,967.

Bariatric surgeries took a dip in 2020, when many people stayed away from medical facilities and non-emergency procedures were canceled or postponed due to the pandemic. But they continued their upward trajectory as soon as the pandemic was more controlled.

Price planning challenges

The cost of bariatric surgery is all over the board. According to the Peterson-KFF Health System Tracker, a quarter of inpatient bariatric surgeries cost less than $24,645 in 2021 while a quarter cost more than $37,510.

That wide range makes it hard for employers to not only understand the true cost of bariatric surgery, but also plan for that spend accordingly.

How a bariatric center of excellence program can help

For employers who are eager to offer employees access to high-quality care while maintaining reasonable costs, a center of excellence (COE) program can help strike that balance.

Carrum Health connects self-insured employers to top-quality healthcare providers for surgical and cancer care (including bariatric surgery providers) to improve the healthcare experience and patient outcomes while reducing the cost burden for employers and their employees.

Obesity is an ongoing problem, with many experts going so far as to classify it as an epidemic. And while there’s no shortage of community efforts to combat obesity, bariatric surgery is still one of the most effective and reliable ways for people to address their weight issues and related conditions.

But weight loss surgery can be inaccessible due to the high price tag. Fortunately, a bariatric center of excellence program can give employees access to procedures that significantly improve their overall health and quality of life—without employers having to stomach such unmanageable and unpredictable costs.

The information contained on this page is for informational purposes only. No material is intended to be a substitute for professional medical advice, diagnosis, or treatment.