Essential H ealth Benefits and Obesity Treatment Coverage

1. Essential Health Benefits and Obesity Treatment Coverage

2. Obesity • Life expectancy, smoking prevalence and use of drugs and alcohol have improved over the last three decades • In contrast, obesity prevalence has nearly tripled in the last 50 years • Over 2/3 of Americans are overweight and obese • 35.7% of Americans are obese • It is projected that 42% of the population will suffer from obesity by the year 2030 • It is major cause of death attributable to heart disease, cancer, and diabetes according to the Centers for Disease Control and Prevention

3. Obesity is a Disease • National Institutes of Health (NIH) recognized obesity as a disease in 1991 • American Medical Association (AMA) in 2013 officially recognized obesity as a disease • Governmental agencies recognizing obesity as a disease • US Internal Revenue Service (IRS) • Centers for Medicare & Medicaid Services (CMS) • Other organizations supporting surgical treatment of obesity • American Heart Association (AHA) • American College of Cardiology (ACC) • American Diabetes Association (ADA) • International Diabetes Federation (IDF)

4. Obesity Trends* Among U.S. AdultsBRFSS,1990, 2000, 2010 (*BMI 30, or about 30 lbs. overweight for 5’4” person) 2000 1990 2010 No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

5. Essential Health Benefits Ambulatory patient services Emergency services Hospitalization Maternity and newborn care Mental health and substance abuse disorder services, including behavioral health treatment Prescription drugs Rehabilitative and habilitative services and devices Laboratory services Preventive and wellness services and chronic disease management Pediatric services, including oral and vision care

6. Obesity Is Not Covered Under the Essential Health Benefits Each State decides whether the disease of obesity is a covered benefit within the qualifying health plans participating in the State Health Insurance Exchange 27 states and Washington DC do not cover bariatric surgery Medical treatment for obesity is a covered benefit in only 5 states

7. Essential Health Benefit Benchmark Plan Coverage of Weight-Related Services AK WA ME MT ND MN NH OR WI NY VT ID SD MI MA RI WY CT PA IA NE OH NJ IN NV IL WV DE UT CO VA KY KS MO MD CA NC TN DC OK AR SC AZ NM AL GA MS TX LA HI FL Does not cover bariatric surgery nor weight loss programs Covers weight loss programs but does not cover bariatric surgery Covers bariatric surgery but does not cover weight loss programs Source: Center for Consumer Information and Insurance Oversight summary of EHB benchmark plans based on 2012 benefits – STOP Obesity Alliance, Weight and the States Policy Research Bulletin, December 2012. (States that have not selected an EHB benchmark plan defaulting to the largest small-group employer plan in the state.) Covers bariatric surgery and weight loss programs Current as of 12-10-2012; Coverage may have changed since this printing

8. Economics of Obesity • Excess weight is responsible for 2.8 million deaths worldwide annually • Obesity accounts for 21% of national health spending • Obesity discrimination plays an important role in lower income and production • 9% lower income

9. Economics of Obesity • Obese individuals have • 42% higher annual healthcare costs • 77% higher prescription costs (as high as 105%) • 37% higher primary care costs • Obesity raises annual medical costs per obese individual by $2,741 (in 2005 dollars) • Obesity increases lifetime medical costs by 50%

10. Economics of Obesity • Productivity Costs • Obese individuals compared to healthy weight individuals have been shown to have • 3.73 additional days lost annually • 1.23 times higher absenteeism rate • 194% more likely to use paid time off • Greater lost productive time while present at work • Bariatric surgery provides immediate benefit by decreasing lost work time and disability • Treatment costs associated with bariatric surgery were relatively small compared to economic losses of not treating obesity

11. Economics of Obesity and Type 2 Diabetes • 24 million Americans have Type 2 Diabetes • 41% increase in the total costs of treating diabetes was noted from 2007 to 2012 • $174 billion to $245 billion

12. Bariatric Surgery Outcomes • Durable weight loss • 106 pound mean weight loss after 16 years • Remission of Type-2 diabetes (83%) • Reduction in mortality from diabetes by 78%

13. Bariatric Surgery Outcomes • Resolution of Obesity-related Medical Problems • High blood pressure 63.3% • Sleep apnea 68.9% • High cholesterol 61.4% • Asthma 66% • Gastroesophageal reflux 87.6% • Arthritis of weight-bearing joints 61.4%

14. Bariatric Surgery for Type-2 Diabetes • Lifetime costs to medically treat a patient with Type-2 diabetes is approximately $300,000 • compared to approximately $25,000 for bariatric surgery • Total health care costs • Increased 9.7% in the first year after surgery, but • Decreased by 34.2% and 70.5% in years 2 and 3 after surgery • Life expectancy is improved in bariatric surgery patients when compared to medically managed patients • Several studies show increased short-term medical costs are increased, but at an acceptable level of cost effectiveness (given that the guideline for cost-effectiveness in the United States is less than $50,000/quality-adjusted life years) • $21,973/quality-adjusted life years (QALY) • $7,000-$9,000/QALY for gastric bypass surgery • $11,000-$13,000/QALY for gastric banding surgery

15. Cost Effectiveness Analysis • Compared 3651 bariatric surgery patients and 3651 matched surgery-eligible control subjects • Assessed total healthcare costs 6 month prior to surgery and up to 5 years after surgery • Cost savings began accruing as early as 3 months after surgery • Total surgery costs were fully recovered • after 49 months for open procedures • after 25 months for laparoscopic procedures

16. Cost of Human Lives • Mortality rate is 4.5% per year without surgery compared to 1% per year after surgery • Only 1% of the eligible population is treated through bariatric surgery • About 25% of patients considering surgery are denied approval for surgery at least three times before obtaining approval • By then, 60% will report worsening health problems • Three of every 100 patients denied surgery will lose their lives in the next year due to deaths that could have otherwise have been prevented with surgery

17. Bariatric Surgery is SAFE! In-Hospital mortality rate for bariatric surgery is now 0.1 % Gallbladder surgery mortality 0.52 % Hip replacement surgery mortality 0.93%

18. Denying Bariatric Surgery • Not cost effective • In the long-term, surgery is less costly • Patients in your state are being denied treatment that is widely available to approximately 45% of Americans • Consider that therapy for patients with other chronic diseases are not denied coverage • treatments are far more expensive and less effective in terms of remission of disease and decreasing disability and increasing productivity • Cancer treatments (medical and surgical) • Heart surgery

19. Obesity treatment coverage should be equitable for all Americans, including citizens who are beneficiaries covered through your State’s Health Insurance Exchange