Cost-Effectiveness of Laparoscopic Gastric Banding and Bypass for Morbid Obesity

Laparoscopic adjustable gastric banding and gastric bypass are cost-effective treatments for morbid obesity compared with no treatment.

Published Online: July 13, 2010
Joanna Campbell, PhD; Lisa J. McGarry, MPH; Scott A. Shikora, MD; Brent C. Hale, RPh; Jeffrey T. Lee, PhD; and Milton C. Weinstein, PhD

Objective: To assess the cost-effectiveness of laparoscopic adjustable gastric banding (LAGB) and laparoscopic Roux-en-Y gastric bypass (LRYGB) as treatment for morbid obesity.


Study Design: A Markov model was developed to simulate weight loss, health consequences, and costs for surgical treatment of morbid obesity. The model was used to estimate incremental cost-effectiveness ratios (ICERs) in terms of cost per quality-adjusted life-year (QALY) gained.


Methods: Estimates of procedure effectiveness were derived from published results of a head-to-head randomized controlled trial. Other model parameters, including complication rates, costs of treatment, adverse events and obesity, mortality rates, and utilities, were estimated from published literature and publicly available databases. Costs (2006 US dollars) and QALYs were discounted by 3% per annum.


Results: Under conservative assumptions, both LAGB and LRYGB improved health outcomes, at a higher cost, compared with no treatment. ICERs for both LAGB and LRYGB versus no treatment were below $25,000 per QALY gained. ICERs were lower for individuals with higher initial body mass index and higher for older individuals. ICERs for men were generally higher than those of women. Sensitivity analyses showed these results to be robust to reasonable variation in model parameters and overall parameter uncertainty. Base-case ICERs for LRYGB versus LAGB were below $25,000 per QALY gained, but were highly sensitive to model assumptions.


Conclusion: Both LAGB and LRYGB provide significant weight loss and are cost-effective compared with no treatment at conventionally accepted thresholds for medical interventions.


(Am J Manag Care. 2010;16(7):e174-e187)

The majority of bariatric procedures in the United States are laparoscopic Roux-en-Y gastric bypass (LRYGB) and laparoscopic adjustable gastric banding (LAGB).


  • Both LAGB and LRYGB lead to better healthcare outcomes and higher costs compared with no treatment. In the main analysis, LAGB results in less weight loss than LRYGB, but is associated with lower costs.
  • Both LAGB and LRYGB are cost-effective alternatives to no treatment, with incremental cost-effectiveness ratios below $25,000 per quality-adjusted life-year gained; results are robust.
  • Estimates of the cost-effectiveness of LAGB versus LRYGB are sensitive to assumptions about maintenance of weight loss in the medium to long term; long-term comparative studies of the 2 procedures are needed.
Obesity, or excessive body fat, is a major risk factor for a host of detrimental medical conditions including type 2 diabetes, hypertension, dyslipidemia, osteoarthritis, and obstructive sleep apnea.1 Approximately 5.7% of American adults (>12 million people) are morbidly obese,2 with a body mass index (BMI) of >40 kg/m2.

There are 3 established approaches to treating morbid obesity: lifestyle modification, pharmacologic therapy, and surgery. The first 2 approaches have been shown to have a limited impact on long-term weight control.3,4 The third option, bariatric surgery, has been shown to be an effective long-term treatment for morbid obesity, with mean excess weight loss exceeding 60%.5 However, the risks of complications with bariatric surgery are not trivial.6

The majority of bariatric surgeries currently performed in the United States are laparoscopic Roux-en-Y gastric bypass (LRYGB) procedures. An alternative to gastric bypass is laparoscopic adjustable gastric banding (LAGB), in which a silicone elastomer ring is placed around the upper part of the stomach, creating a new small stomach pouch so the food storage area in the stomach is reduced. Excess weight loss with LAGB, although significant, may be lower than that seen with LRYGB.6 However, LAGB, unlike LRYGB, does not involve stapling or partition of the stomach or intestine; thus, postoperative complication rates are lower, hospitalizations are shorter, and there is less risk of micronutrient deficiency compared with LRYGB.7 Moreover, the procedure is fully reversible. The objective of this study is to assess the cost-effectiveness of LAGB versus that of LRYGB, or no treatment, for patients with morbid obesity.


Model Structure

We constructed and estimated a Markov model of treatment and outcomes for obese adults. The model focused on decreases in BMI and treatment-related adverse events as predictors of lifetime cost, health-related quality of life, and survival. Patients received initial treatment with LAGB or LRYGB, or received no treatment. After the initial treatment period, patients entered the Markov model in 1 of the 5 health states corresponding to their initial BMI status: not obese (BMI <30 kg/m2); obese (BMI 30-34.9 kg/m2); morbidly obese I (BMI 35-39.9 kg/m2); morbidly obese II (BMI 40-49.9 kg/m2); and super obese (BMI >50 kg/m2). The sixth health state in the model was death. Health states were associated with specific treatment costs, levels of “other” health expenditures, health-related quality of life, and mortality risks. Patients transition between Markov states by changing BMI status (losing or gaining weight) or dying. For the first 10 years of the model, surgical patients remained at risk of transient treatment-related adverse events that may be mild, moderate, or severe.

Model Estimation

We estimated model probabilities, costs, and utilities from a variety of published and publicly available sources, supplemented by input from a clinical expert in minimally invasive (laparoscopic) bariatric surgery. Table 1 reports model parameters and data sources.

Target Population. The population for this analysis was limited to adults age 18 to 74 years who satisfied the clinical eligibility criteria for bariatric surgery: BMI >40 kg/m2 or BMI >35 kg/m2 with comorbid conditions.8

Treatment Efficacy. Probabilities of treatment-related weight loss were estimated from a prospective study by Angrisani et al, in which morbidly obese patients were randomized to LAGB and LRYGB and followed for 5 years postsurgery.9 In base-case analyses, it was assumed that BMI remained constant after the 5-year follow-up period. Patients receiving no treatment were assumed to maintain a constant BMI for the duration of the model. The study by Angrisani et al was judged to be the strongest available based on its randomized head-to-head design and minimal attrition over the 5-year study period. The study limitations include a small initial sample (N = 51) and a European rather than US setting. For this reason, we also estimated the model using an alternative source for 5-year efficacy data: a systematic review of 36 English-language studies of weight loss outcomes following LAGB or LRYGB by O’Brien et al.10 Limitations of the O’Brien et al study include a preponderance of single-armed rather than comparative studies, and attrition rates that may have been underreported. Compared with the Angrisani et al study, O’Brien et al reported greater effectiveness for LAGB and shorter durability of weight loss for LRYGB (with weight regain beginning in year 3), as shown in Figure 1.

The calculation of transition probabilities between BMI categories also is described in Appendix A.

Probabilities of Treatment-Related Adverse Events. The estimated incidences of adverse events were derived from a comparative study of the complications of LAGB and LRYGB by Parikh et al.11 Events are classified by severity: major reoperations, defined as organ repairs such as resection of the bowel; moderate reoperations, defined as operations not requiring organ repair (eg, laparoscopic repositioning of a gastric band); and medical treatment, defined as drug therapy only (eg, antibiotic therapy for an infection). Parikh et al reported separate estimates for the probabilities of major reoperations and all adverse events for the first 30 days (early) and after 30 days (late). We estimated the early and late probabilities of moderate reoperations and medical treatments based on the relative proportions of total early and total late complications from that study. The average period of follow-up was approximately 12 months; we assumed that the yearly probability of surgical adverse events remained constant for the first 4 years postsurgery, was halved for years 5 to 10, and was zero after 10 years. Consistent with the literature, patients receiving no treatment were assumed to have no serious adverse events.

Mortality. Patients undergoing LAGB or LRYGB have a 1-time probability of postoperative death from surgery in the first 30 days.12 BMI-specific mortality rates were estimated based on age- and sex-specific all-cause mortality rates derived from US life tables,13 to which we applied BMI-specific relative risk ratios from an analysis of the National Health and Nutrition Examination Survey by Flegal et al.14 Because Flegal et al reported a single aggregated mortality risk ratio for BMI >35 kg/m2, we estimated separate mortality risk ratios for the morbidly obese I, morbidly obese II, and super obese groups using linear extrapolation based on the trends at lower levels of BMI and the relative prevalence of morbid obesity categories reported by Sturm: morbidly obese I (67%), morbidly obese II (29%), and super obese (4%).15

Costs. The physician costs for the LAGB and LRYGB procedures were estimated using Current Procedural Terminology codes: 43770, 90772, 90801, 97802, and 99214 for LAGB; and 43644, 90801, 97802, and 99214 for LRYGB.16 Associated inpatient costs were estimated using data from the Healthcare Cost and Utilization Project (HCUP) Database with International Classification of Diseases, Ninth Revision codes: 44.95 for LAGB, and 44.38 for LRYGB.17 The hospital charges were converted to resource costs using hospital cost-to-charge ratios published in the HCUP Database. The default schedule of follow-up visits was based on treatment guidelines of the American Society for Metabolic and Bariatric Surgery, supplemented by input from our clinical expert as: 9 visits in year 1, 2 visits in year 2, and 1 annual visit thereafter for LAGB; and 6 visits in year 1, 2 visits in year 2, and 1 annual visit thereafter for LRYGB.

In consultation with our clinical expert, the costs of LAGB- and LRYGB-related adverse events for each level of severity were estimated using the Physician Fee Guide (physician costs),16 HCUP Database (facility costs),17 and the Red Book (drug costs).18 Within each severity category, a weighted average cost was derived, based on the relative prevalence of such complications as reported by Jan et al,19 supplemented by additional input from the clinical expert. The cost of a postoperative fatality was assumed to be equal to that of an early major reoperation. A list of the complications that were used to generate the weighted average costs is available from the authors on request.

"Other" medical expenditures specific to each BMI level were calculated based on a study of the Medical Expenditure Panel Survey by Arterburn et al.20 Because this study reported aggregated expenditures for the BMI >40-kg/m2 group as a whole, we estimated the other medical costs for the morbidly obese II and super obese groups using linear extrapolation as described above.15 Where necessary, costs were updated to 2006 US dollars using the Medical Care Services component of the Consumer Price Index.

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