Tag Archives: insurance reform

Bariatric patient’s story shows potential savings

Las Vegas Sun reporter Marshall Allen follows one man’s story to look into the ultimate cost (or savings) of bariatric surgery and discusses why insurance companies don’t always cover the procedure.

The narrative alone makes the story worth reading, and when Allen adds the numbers it draws a particularly compelling picture.

• In the first five months of 2008, taxpayers provided Daswell (who topped out at 380 pounds) with 17 medications for obesity-related health problems at a cost of $8,374.19.

• In the first five months of 2009 (after the surgery), taxpayers provided Daswell with 13 medications for obesity-related health problems, many at reduced dosages, at a cost of $5,106.54.

It’s a simple measure, but shows a savings of $3,267.65 in the five months, a 39 percent reduction in expenses in drugs alone.

Daswell’s surgery cost about $16,000 for the procedure and first year of follow up. If the pharmacy costs were the only savings realized, the expense could be recouped in just over two years. That does not count the costs Medicare would presumably save in doctor visits and medical equipment — he barely uses the sleep apnea machine he once depended on every night. The equation would also have to factor in the long-term chance that Daswell could contribute to the economy by getting a job and going off Medicare disability.

Marshall goes on to say that while Daswell’s case is somewhat exceptional, the results and savings are, for the most part, generalizable to the population at large. Bariatric surgery, Marshall found, usually pays for itself within a few years.

Loophole in industry proposal for universal coverage

Los Angeles Times columnist David Lazarus points out that while, in a letter to influential senators, insurance industry executives promise, in Lazarus’ words, that “they’ll treat all people fairly in return for a government requirement that everyone buy their product,” the companies have left a significant loophole that might allow them to continue charging sicker people more money.

The key words are “benefit design,” the practice by which people can choose different levels of coverage at different prices. In a benefit design scenario, the elderly and infirm will be more likely to choose the more expensive coverage ranges while the young and healthy will choose cheap bare-bones coverage.

“It’s a very potent way of segregating sick people from healthy people,” said Karen Pollitz, a research professor at Georgetown University’s Health Policy Institute. “It’s essentially a way of continuing to charge more based on people’s health.”