By Mitchell S. Roslin, MD, FACS


Imagine there is an investment opportunity for a product in the medical space that treats a condition that is growing in prevalence, is increasingly associated with premature morbidity and mortality, has little competition, and has years of data documenting safety and efficacy. Sounds like a great investment and the chance to invest in the next Intuitive Surgical. Intuitive Surgical is the darling of Wall Street. Its share price has increased 400% in the past five years.1 This growth has been achieved despite the fact that the daVinci system has never shown better outcomes in any area over standard laparoscopy, while being a good deal more expensive.2

That is why the story of bariatric surgery is so confounding. Despite data that have shown remission of diabetes, cardiac risk reduction, improved quality of life and weight loss results that cannot be challenged by any other treatment for obesity, the amount of procedures performed in the United States has, at best, remained stable since 2010.3 In all probability, the total number of cases performed has declined by approximately 10%. If revisions are subtracted, the number of people having bariatric surgery has declined even further.

These statistics are even harder to understand when you add the documented safety improvements that have reduced mortality from 0.5% to less than 0.1%.4 Furthermore, each year numerous fellows complete outstanding minimally invasive training programs that emphasize bariatric surgery. As a relatively young field, the number of people entering bariatric surgery practice far exceeds the number of surgeons with large bariatric practices who are retiring. The purpose of this article is to examine the factors and propose potential solutions for this issue.

Some may believe this is inconsequential. Some may think, “My practice is fine, so why be concerned?” To the contrary, I believe that this is the most sentinel issue facing our field. Absence of growth and penetration of an exceedingly low percentage of the potential population that could benefit from bariatric surgery is a strong indicator that our message is still not being heard, and as health care reform moves forward, bariatric surgery will be a low priority. With increasing economic pressure, further decline is inevitable.

Returning to my corporate analogy, if bariatric surgery was a company, shareholders would be questioning current executives and the board of trustees. As surgeons, we are not a company or corporation, but it is imperative that part of the mission of our national specialty society, journals and publications be to disseminate the outstanding data accumulated and to improve access for these lifesaving procedures. As our data have improved, we need to begin the difficult task of questioning our strategy and see how, collectively, our field can succeed, even in the current economic decline.

Penetration and the Numbers

The exact number of bariatric procedures performed in the United States has been estimated to be as high as 250,000. Although all agree that the number has stabilized or plateaued after rapid growth from 2000 to 2008, the actual number is one of debate, and, by my calculation, frequently overestimated.5 I believe that the most accurate way to determine the number of bariatric procedures is to use the revenue reported by Allergan for its obesity unit. As a publicly traded company, it is easy to determine the maximum amount of gastric bands that Allergan has sold. From these data, we can estimate the percentage of bands representative of the total market, as well as the percentage of total bands that the Lap-Band comprises.

For the past year, Allergan’s total revenue for its bariatric unit was $160 million. This is down from $269 million the year before.6 For simplicity, assume that the revenue per band-patient is $3,000. This would include cost of needles, accessory ports and so on. The amount of cases done with their system was around 53,000 in 2011. At maximum, it was approximately 85,000. Several years ago it was estimated that bands replaced, or nearly equaled gastric bypass as the most prevalent procedure. Add at most 10% market share for the Realize band, and the maximum number of cases performed was 200,000. Lap-Band revenue has declined more than 30% in the past two years. Some have argued that stapling procedures have stayed the same and the number of band procedures has declined. If that is true, then the total number of cases performed in the United States is approximately 170,000, which I believe is reasonably accurate. It is not likely that all the patients who would have had bands have had a sleeve gastrectomy or gastric bypass instead. What is far more likely is a significant decline for the total market.

This has occurred as the prevalence of obesity and diabetes has continued to increase. It is now estimated that 6.6% of the U.S. population has a body mass index (BMI) greater than 40 kg/m2. This percentage more than doubles if one includes individuals with severe obesity, or BMI greater than 35 kg/m2. Furthermore, the American Diabetes Association estimates that there are 25 million individuals with diabetes in the United States and another 79 million with prediabetes. The most recent estimate of the U.S. population is 311 million. So, there are at least 20 million individuals with a BMI greater than 40 kg/m2. If we conservatively estimate the potential target market for bariatric surgery as 30 million people, we have a penetration of only 0.5%. Thus, despite widespread media attention that has highlighted strong advantages for surgical therapy for obese individuals with diabetes, we treat less than 1% of those individuals. I know of no other area in medicine where the data and the penetration are this discordant.

Our challenge is to be critical and determine how we can better present our message. We need to determine what data are most critical to assemble, and how we can accumulate them in a cost-effective manner. Finally, we have to realize the relevance of these facts. For medical device manufacturers, bariatric and metabolic surgery represented growth. As a result, they became our partners battling for insurance approval for novel procedures such as sleeve gastrectomy. They provided financial support for our educational meetings, research grants and fellowship programs. It was a win–win situation. We were treating an undertreated deadly condition using equipment they manufactured, such as staplers and bands. Growth was expected to continue, and more than justify their investment in our field. The numbers are vastly different today. The anticipated market potential for obesity and diabetes has not approached even conservative estimates. As a result, we can expect a reduction in their support and investment. Recently, Johnson & Johnson eliminated its bariatric specialty sales unit. Instead, it has combined with hernia and thoracic surgery. In my opinion, this is not a trivial change.

We all know that the better financed lobbies and fields are going to fare best with health care reform. Although the Obesity Action Coalition has done a great job, its task is complicated by the present diversity of opinion regarding obesity. As opposed to the National Multiple Sclerosis Society, the Arthritis Foundation, the American Heart Association and the American Cancer Society, there is little uniformity regarding the mission of the obesity lobby. Are they fighting for cure, treatment or tolerance? It is thus essential that we continue to gain support from our industry partners, until our lobby becomes stronger and we can join forces with other key players such as the American Diabetes Association.

Prejudice Against Obesity

A common rationale for the above data is discrimination against obesity and obese individuals. George Cowan, MD, a retired bariatric surgeon from Tennessee liked to say, “obesity was [the] last bastion of accepted prejudice in the USA.” Certainly, when states, unions or employers reduce coverage for bariatric surgery, many blog posts are supportive. But if we had a referendum on what is covered, few things other than child care and vaccinations would be popular. In all probability, the popularity of coverage would vary directly with the number afflicted. This should be promising, because if current growth rates continue, virtually the entire population will be obese by 2040.7

As a result, it would seem logical that prejudice against obese individuals will decline as more people and their family members desire treatment. This will be offset by the difference between an individual’s actual level of obesity and their perception. Frequently, many underestimate their degree of obesity. Additionally, there is the widespread belief that obesity is a condition of choice, caused by an absence of personal responsibility. The argument continues: Why should I pay for coverage for a condition that is self-inflicted? There are limitations to this argument. Certainly, cigarette smoking causes the majority of lung cancers, and there are no limitations on treatment. Similarly, even liver transplant in reformed IV drug addicts and alcoholics is a covered procedure. It is doubtful that this discrepancy can be explained by the fact that alcoholics, smokers and drug addicts are more popular than obese individuals.

Then what is the difference? In my estimation, it is the fact that there is consensus that the treatment of choice for end-stage liver failure is liver transplantation. All would agree that without treatment, lung cancer is a terminal disease. Even with treatment, the prognosis often is dismal. In contrast, for obesity, there is no mandatory treatment level. The patient determines whether his or her obesity requires treatment. There is no accepted pathway. For example, for hypertension, the first-level treatment may include behavioral changes followed by reexamination. If severe, medical therapy will be started. If appropriate metrics are not reached, then the dose will be raised or additional agents will be started. For obesity, this metric does not exist. Thus, although bariatric surgery is considered the treatment for refractory morbid obesity, there is no accepted medical definition of what constitutes refractory morbid obesity. It is akin to being at the top of a nonexistent food chain. If there were an accepted treatment threshold, then those who do not respond would go up the chain. Many would ultimately be referred for surgery.

The existence of prejudice is an unfortunate fact of life. However, what limits treatment is the lack of consensus and a level that mandates treatment. It is essential that we understand this complex issue and work with other societies to develop an accepted clinical pathway for the treatment of obesity. The development of Obesity Week and the combined meeting of the American Society for Metabolic and Bariatric Surgery with the Obesity Society hopefully will initiate this process.

The Economy

It is the opinion of many that an important cause of the decline or stabilization in bariatric surgery is the downturn of the economy. Certainly, one cannot discount the effect of the current economic condition. Unemployment levels have been approximately 10%. Not counted are many people who have given up even searching for jobs. Struggling companies have had to reduce or at least stabilize their contribution for health insurance. Wages have been stagnant, yet health care costs and insurance rates have risen. Both employers and employees have been reluctant to increase their level of contribution for health insurance. To keep costs stable, covered benefits have been reduced. Individual and family deductibles, as well as copays have been raised. The net result is that the cost to an individual for elective surgery has increased. To reduce expenditures, less robust benefit packages are being purchased. Often these contain riders or exclusions for services that are deemed not essential. Unfortunately, riders that exclude coverage for the treatment of obesity and surgical treatment for morbid obesity are not uncommon. The importance of this point cannot be overstated. Thus, although recent data have resulted in virtually all national insurance companies covering bariatric surgery, many of their clients purchase programs that exclude this coverage.

The combination of fewer people with health insurance and exclusions for coverage for those with health insurance is certainly a major issue. Another cause has been the decline in net worth and total assets of Americans. As people are less wealthy, with declining home values, they are reluctant to pay out of pocket for bariatric surgery. This has certainly been a major issue for laparoscopic adjustable gastric bands. The cash pay market has decreased significantly.

Although economic issues certainly play a role, they do not completely explain why market penetration is so low. In fact, after a sharp reduction at the beginning of the economic crisis, most fields have recovered. Some areas such as joint replacement and spine surgery have flourished.

There are many essential messages. Rather than caused by the recession and economic turbulence, I believe these data demonstrate how vulnerable our field is. Why are exclusions for obesity so popular? What can we do about it? It seems clear to all that cost pressures are only going to increase, and all fields in medicine will be competing for a smaller pie. Where will bariatric and metabolic surgery land when we have struggled even before the fiscal cliff?

To combat exclusions, it has been suggested to insurers and employers that bariatric surgery will offer a return on investment (ROI) in two to three years; thus, it is an excellent investment for health care plans and employers. The problem is whether this is true. Recently, I met with leadership of the Optimum Division of United Healthcare. Even with low in-network rates, their clients failed to have an ROI. In fact, more than 30% of the covered lives who had bariatric surgery had revisional procedures in less than three years. The majority had laparoscopic adjustable bands.

An additional misnomer is the implication that all patients who have bariatric surgery or a BMI greater than 40 kg/m2 are actuarial disasters for their insurers. In fact, major portions of patients who have bariatric surgery are premenopausal women without life-threatening risk for heart disease. In order to see an ROI, patients selected for surgery would need to have advanced disease. Unfortunately, the same people may be more likely to have significant complications, thus increasing costs.

These issues should not be cause for concern. I doubt there is any surgical procedure that can clearly show an economic ROI. Probably immunizations can, but few other areas. Even screening programs for cancer are only cost-effective if you add improved quality of life and reduced mortality. In terms of medical costs, they probably result in an increased number of procedures, such as biopsies that are frequently negative. Thus, as bariatric surgeons, we should stop being actuaries and investment advisors, and highlight the fact that we can offer reversal and remission of serious chronic health issues. In contrast, without surgery, stabilization is often the goal. The key point is that we need to convince people of the value of our procedures for their immediate health care needs. The long-term health of an individual is affected by so many things, it is doubtful that any procedure or treatment can offer a return in hard health care costs.


  1. ISRG Historical Price; Yahoo Finance.
  2. J Healthc Qual. 2011;33:48-52.
  3. JAMA. 2012;308:1122-1131.
  4. Curr Atheroscler Rep. 2012;14:597-605.
  5. Am J Surg. 2010;200:378-385.
  6. Allergan Inc. Yearly report, 2008-2011.
  7. J Health Econ. 2012;31:781-796.

Dr. Roslin is chief, bariatric and metabolic surgery, Lenox Hill Hospital/NSLIJ, New York City, and Northern Westchester Hospital Center, Mt. Kisco, N.Y.

In Part 2, Dr. Roslin discusses potential approaches to recuce the discrepancy between the number of people who would benefit from bariatric surgery and those who actually receive it.