A cost-benefit analysis of bariatric surgery on the South Plains region of Texas.

The regional economic burdens of obesity have not been fully quantified. This study incorporated bariatric surgery demographics collected from a large university hospital with regional economic and employment data to evaluate the cost of obesity for the South Plains region of Texas. Data were collected from patients who underwent laparoscopic gastric bypass and laparoscopic banding between September 2003 and September 2005 at Texas Tech University Health Sciences Center. A regional economic model estimated the economic impact of lost productivity due to obesity. Comparisons of lost work days in the year before and after surgery were used to estimate the potential benefit of bariatric surgery to the South Plains economy. Total output impacts of obesity, over $364 million, were 3.3% of total personal income; total labor income impacts neared $60 million: the losses corresponded to $2,389 lost output and $390 lost labor income per household. Obesity cost the South Plains over 1,977 jobs and decreased indirect business tax revenues by over $13 million. The net benefit of bariatric surgery was estimated at $9.9 billion for a discount rate of 3%, $5.0 billion for a discount rate of 5%, and $1.3 billion for a discount rate of 10%. Potential benefits to the South Plains economy of performing bariatric surgery more than outweigh its costs.

Price trends in single- and multispecialty physician practices.

Effective provision of physician services and the financial performance of physician practices depend on both cost and price. While there has been much discussion and research on the differences among physician organizations, particularly pertaining to cost and efficiency, little attention has been paid to how prices received for services have changed over time. In order to address this void in the literature, we focus on the trends in prices paid for services rendered by two different organizational structures, namely single- and multispecialty physician groups. In particular, we examine the Producer Price Index for each physician group over the period of 1994 to 2010.

A theoretical framework for shedding additional light on the determinants of medical practice value.

BACKGROUND: Over the years, business valuation techniques have been widely used to appraise the financial worth of medical practices. However, it has been argued that medical practices are one of the most complex and difficult types of business enterprises to value. PURPOSE: The purpose of the current study is to develop a theoretical framework that sheds additional light on the determinants of a medical practice's value and to provide practitioners with a theory-based model on which to base valuations to avoid "wild west" scenarios where individual valuators use his or her own unique models that can lead to wild variations in the value amount of the same medical practice. APPROACH: The article starts by discussing standard approaches to valuing any business including medical practices. We then develop a theoretical framework that sheds additional light on the determinants of a medical practice's value by showing how strategic choice and environmental determinism affect the value of a medical practice. Once the framework is developed, the practice implications related to the framework are discussed. FINDINGS: In this article, determinants of a medical practice's potential for sustained profitability are identified. Specifically, a framework is presented that shows how the combination of strategic choice and environmental determinism can affect a medical practice's chances of sustained profitability. Developing such a framework is an important contribution to the literature given that one of the most problematic areas of medical practice valuation is determining the factors that a valuator must assess to arrive at an appropriate fair market value for a practice. PRACTICE IMPLICATIONS: The development of a framework that sheds additional light on the determinants of a medical practice's value is important in light of the difficulty of obtaining reliable market data regarding sales of medical practices, which tend to be closely held private entities.

Economic considerations for bariatric surgery and morbid obesity.

The obesity epidemic is also an economic tragedy. This analysis evaluates the economic effects and the potential to improve the well-being of both individual and societal wealth. Econometric techniques should carefully assess the degree to which obesity affects declines in business output, employment, income, and tax revenues at the regional and national levels. Microeconomics assesses lost productivity and associated wages and profit. Macroeconomics assesses trends associated with employment, inflation, interest rates, money supply, and output. To decrease the adverse economic consequences of the obesity epidemic, policy makers must emphasize bariatric surgery as a cost-effective option for qualified patients. Early intervention, education, and tax rebates for obese individuals who undergo bariatric surgery and for medical centers and doctors would likely have positive economic effects on the whole economy in a few years.

Bariatric surgery costs and implications for hospital margins: comparing laparoscopic gastric bypass and laparoscopic gastric banding.

BACKGROUND: Effective cost reduction strategies require effective analyses of charges. METHODS: Costs and charges for laparoscopic gastric bypass and laparoscopic gastric banding were compared. Equipment costs, both disposable and reusable, were obtained. Data on the total charges, anesthesiology charges, and hospital charges were obtained; univariate and multivariate analyses were performed. RESULTS: Disposable equipment costs for laparoscopic gastric bypass totaled $3516.23, for laparoscopic gastric banding they were $4363; the difference stemmed from the $3195 laparoscopic band. Median total charges for the procedures differed by less than $100 (P=0.81). Hospital charges for gastric bypass were about $275 (P=0.087) more for bypass than for banding. CONCLUSIONS: Effective cost reduction strategies require cost analyses of each individual procedure; results for one procedure cannot necessarily be generalized to another procedure even if overall costs do not differ.

Broadbanding a surgical academic practice salary: a possible score.

How can we look at productivity in academic centers when surgeons perform different procedures that pay differently? Another dilemma is how they are compensated for teaching medical students, residents, and other surgeons. We also have to compensate them for the types and difficulty of the procedures. We can view this problem as either "making the pie bigger" or "dividing the pie better. "First, we should focus on how to "divide the pie. "Regardless of the "pie size," the issue of allocation for remuneration purposes is an important issue. "Dividing" the pie is an internal exercise, whereas making the pie "bigger" involves additional internal and external factors. In this paper, we address the issue of dividing the pie in a measurable way. We also address how to score each activity so that bonuses or compensation can be calculated without the "more" productive surgeons effectively subsidizing the "less" productive, a situation that is often detrimental to organizational success. Academic surgeons are very important for teaching new surgeons and medical students; therefore, they should be remunerated adequately. Pay schemes may be developed to improve the retention of highly productive surgeons in the academic environment.

The impact of morbid obesity on the state economy: an initial evaluation.

BACKGROUND: Obesity's impact on a state's economy has not been fully analyzed. This study compared bariatric surgery demographics at a large university hospital to that of a broader region's population statistics. From this comparison, an economic model was derived that evaluated, for the state of New Mexico, the cost of obesity in terms of lost business output, employment, and income. METHODS: Between September 2003 and September 2005, we analyzed the charts of all of our patients from New Mexico who underwent laparoscopic gastric bypass and laparoscopic banding. Input-output analysis estimate margins, the purchase prices for goods and services, and regional purchase coefficients, the percent of spending by local suppliers, were used to model the regional economy. Collected patient data, used in conjunction with IMPLAN model data, were used to estimate, on a regional basis, an industry-by-industry formulation of input-output accounts to calculate multipliers in order to assess the impact of economic costs of the obese on the general economy. RESULTS: Total labor income impacts are nearly 200 million dollars, 1,660 dollars of output income per household and 245 dollars of labor income per household. Obesity cost New Mexico more than 7,300 jobs and cut state and local tax revenues by more than 48 million dollars. CONCLUSION: Obesity's impact of more than 1.3 billion dollars amounts to 2.5% of New Mexico's gross state product. Governmental measures to combat this menace are warranted.