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Direct and Indirect Costs and Potential Cost Savings of Laparoscopic Adjustable Gastric Banding Among Obese Patients With Diabetes

Finkelstein, Eric A. PhD; Allaire, Benjamin T. MS; DiBonaventura, Marco daCosta PhD; Burgess, Somali M. PhD

Journal of Occupational & Environmental Medicine: September 2011 - Volume 53 - Issue 9 - p 1025–1029
doi: 10.1097/JOM.0b013e318229aae4
Original Articles

Objective: To estimate the time to breakeven and 5-year net costs for laparoscopic adjustable gastric banding among obese patients with diabetes taking direct and indirect costs into account.

Methods: Indirect cost savings were generated by quantifying the cross-sectional relationship between medical expenditures and absenteeism and between medical expenditures and presenteeism (reduced on-the-job productivity) and simulating indirect cost savings based on these multipliers and reductions in direct medical costs available in the literature.

Results: Time to breakeven was estimated to be nine quarters with and without the inclusion of indirect costs. After 5 years, net savings increase from $26570 (±$9000) to $34160 (±$10380) when indirect costs are included.

Conclusion: This study presented a novel approach for incorporating indirect costs into cost-benefit analyses. Application to gastric banding revealed that inclusion of indirect costs improves the financial outlook for the procedure.

From the Health Services and Systems Research Program (Dr Finkelstein), Duke-NUS Graduate Medical School, Singapore, Singapore; Public Health Economics Program (Mr Allaire), RTI International, Research Triangle Park, NC; Health Economics and Outcomes Research (Dr. DiBonaventura), Kantar Health, New York, NY; and Patient-Reported Outcomes (Dr Burgess), Mapi Values Boston, MA.

Address correspondence to: Eric A. Finkelstein, PhD, Duke-NUS Graduate Medical School, 8 College Rd, Singapore 169857; (eric.finkelstein@duke-nus.edu.sg).

At the time this manuscript was written Dr. Burgess was employed by Global Health Outcomes Strategy and Research, ALLERGAN Irvine, Calif.

E.A.F wrote portions of the manuscript, provided the overall methodology, and performed statistical analysis. B.T.A wrote portions of the manuscript, performed the claims analysis, and performed the Medical Expenditure Panel Survey analysis. S.M.B. provided LAGB-specific knowledge and the latest evidence for LAGB. M.d.D. performed the analysis of the National Health and Wellness Survey.

©2011The American College of Occupational and Environmental Medicine