Weight loss surgical device makers are pushing the U.S. government and health insurers to cover weight loss surgery. Almost 73 million people in America are classified as obese, defined as having Body Mass Index (BMI) of 30 or greater. Additionally, about 12 million of those people are considered morbidly obese, with a BMI over 40. Obesity is associated with type 2 diabetes, heart disease, stroke, osteoarthritis, gall bladder and liver disease and many types of cancer. It is estimated that it costs the US nearly $150 billion annually in health care dollars. If coverage was extended, it would give surgery access to millions more obese Americans.
Allergan, the maker of the Lap-Band system, is one of the most vocal supporters of the effort. They, as well as other device makers, believe that expanding insurance coverage would give those suffering from obesity access to all of the available tools needed to overcome obesity. Advocates also argue that increased coverage would help save billions of dollars in healthcare costs for employers, as well as the government. Critics of the effort, however, argue that weight loss surgery has complications and does not modify the underlying behaviors influencing obesity. David Pyott, Chief Executive Officer at Allergan, explained, “It’s all about reimbursements. And the benefits of weight loss surgery are not well understood by policy makers.”
Allergan recently expanded its staffing from 7 to more than 100 people to work on improvement in health insurance policies for the Lap-Band. Johnson & Johnson, maker of the other FDA-approved band, the Realize Band, is also pursuing better reimbursement. The device makers are pushing for coverage of bariatric surgery as a category – including the gastric bypass and gastric sleeve – rather than just their devices.
Coverage for weight loss surgery does continues to improve, and currently 56 percent of large companies actually cover bariatric surgery for their employees. A recent survey found that 45 percent of employers deem obesity to be one of the most significant health concerns for their company. There is also abundant data that providing coverage for weight loss surgery saves a company money after approximately two years. However, some insurers that do cover surgery require patients to try other less effective therapies first such as six months or more of medically supervised weight loss, which is expensive and time-consuming for patients, and delays the most effective treatment.
Overall, in 2010, the number of all types of bariatric surgeries declined about 8 percent. Likewise, across the board in medical procedures there was a decline as many people lost their jobs and health insurance. In some states such as Virginia and Georgia, state-regulated insurers are mandated to offer weight loss surgery; however employers are not required to buy that coverage, and Georgia state employees lost their coverage. On the other hand, some states like Michigan have more significant coverage. In Michigan, all “medically necessary” procedures, including bariatric surgery, are covered. The Centers for Medicare and Medicaid Service (CMS), which provides health programs for the elderly and the poor, covers gastric banding and gastric bypass and uses the same guidelines as private insurance companies.
Another common weight loss procedure, the gastric sleeve, is in the process of being considered for coverage with CMS. The first comment period is closed and CMS is reviewing the feedback. They are expected to open another comment period in March 2012. Additionally, the new gastric plication procedure has had some encouraging weight loss results, however it is still considered “investigational” so it is not yet covered by insurance at all.
Industry & Innovation