Obesity epidemic creates supply chain problems for providers
Hospitals are carrying higher supply-chain costs related to larger numbers of obese patients, with much of that expense not being reimbursed
Health system executive Deborah Templeton remembers a time not so long ago when the maximum-weight capacity labeled on traditional-size patient beds, gurneys and wheelchairs topped out at about 350 pounds.
These days, however, it’s not unusual for such equipment to accommodate patients weighing up to 500 pounds. And Templeton, the vice president of supply chain services at Geisinger Health System, Danville, Pa., says her system is purchasing a growing amount of equipment suitable for even larger patients. In addition to beds, gurneys and wheelchairs, Geisinger orders gowns, blood pressure cuffs, specially made surgical instruments and other supplies to be used in caring for a burgeoning population of obese patients.
Geisinger is hardly alone in its experience. Throughout the U.S., hospitals increasingly are buying specially sized equipment and supplies, adjusting their physical plants to accommodate severely overweight patients, and providing a more intense level of care to obese patients. All of which places greater demands on hospitals’ staffing and financial resources.
According to a June 2010 survey performed by group purchasing organization Novation, 61% of responding facilities have seen an increase in admissions of morbidly obese patients (with a body mass index of 40 or higher). Some 87% of respondents said they have had to equip their emergency rooms to appropriately care for obese patients, and 28% said they have within the past year renovated their facilities to accommodate larger patients.
“In the past several years, we’ve realized that we needed to build out a more robust portfolio of products for taking care of obese patients,” says Cathy Denning, vice president of sourcing for Novation, based in Irving, Texas. That portfolio includes items such as bigger operating tables, sturdier crutches and stress-test treadmills, and specially designed endotracheal tubes.
Such equipment and supplies typically cost providers 25% to 30% more than traditionally sized items, supply chain experts say. “When you get up to the higher-end beds and mechanical lifting devices, it can be three to five times more expensive,” Templeton says.
More-costly supplies are only one aspect of the additional expense that often is attached to caring for patients with a BMI higher than 30. Obese patients typically require longer hospital stays, a greater number of clinical staff to attend to them and more costly interventions to recover from an illness than patients who aren’t obese, clinicians say.
A July 2009 study, “Annual medical spending attributable to obesity: payer-and-servicespecific estimates,” published online by the journal Health Affairs estimated that obesity was responsible for approximately $147 billion in medical costs covered by public and private payers in 2008. That estimate does not account for out-of-pocket patient costs and nonreimbursable costs borne by providers.
Getting at the costs that providers bear to care for overweight patients is no easy task, however. Despite significant anecdotal evidence that hospitals pay more to care for severely overweight patients and studies that show obese Americans rack up more in healthcare costs than their counterparts of healthy weight, hospitals are hard-pressed to quantify obesity’s effect on their bottom lines.
“I don’t know of a hospital in the country that can capture all of their obesity-related costs,” says Paul Keckley, executive director of the Deloitte Center for Health Solutions. Keckley says that a good many of the costs associated with caring for an obese patient are “sunken”—meaning they are buried and difficult to tag with a specific price. For example, obesity cost estimates don’t account for a hospital’s lost productivity when it has to assign two employees instead of one to help bathe or get an obese patient out of bed.
“I don’t think the current estimates of obesity costs have come close,” Keckley says. “We’ve not looked, for example, at the cost of the back problem that someone develops because they’ve been helping a patient out of chairs.”
Still, while hospitals, GPOs and healthcare data organizations haven’t quantified the expense that hospitals incur when caring for obese patients, there is convincing evidence that those costs are substantial.
Joanne Reid, administrative director of the Surgical Weight Loss Institute at 160-bed Castle Medical Center in Kailua, Hawaii, says that among her hospital’s general patient population, 80% to 90% of patients who are diagnosed with sleep apnea develop the condition because they are overweight. In response, the hospital has gone from owning two continuous positive-airway pressure machines in 2005 to currently owning 10. The machines typically cost $2,000 to $14,000 apiece, Reid says.
“And we’re still renting additional ones on a weekly basis because we aren’t meeting the need” with current stock, she says. “We haven’t done a cost comparison analysis on obese patients, but anecdotally, our clinicians would tell you it’s substantially more.”
A bigger ticket
A growing body of studies is documenting the direct healthcare costs associated with obesity and confirming that patients who struggle with significant weight problems are likely to have higher healthcare costs. According to data from the Economics of Obesity, a yet-to-be-published report from the consulting firm McKinsey & Co., an obese patient with a BMI between 30 and 34 will rack up about $725 more per year in healthcare costs than someone with a healthy BMI of 25 or lower. Those additional annual costs hit $2,170 for someone with a BMI between 35 and 39 and a whopping $3,605 in additional yearly costs for an individual with a BMI of 40 or higher (See chart, this page).
“Every point of BMI above 30 was correlated with roughly $300 per year, per capita in increased healthcare costs,” says Steven Gipstein, the McKinsey associate principal who compiled the report.
The report also found that in total, Medicare, private payers and patients dished out about $160 billion in 2008 to pay for care that was the result of obesity-related comorbidities and complications, including high blood pressure, diabetes, heart disease and sleep apnea.
Such obesity-related conditions can have cost ripples beyond the expense of managing the disease, however. Patricia Wrobbel, director of nursing for surgical, medical specialties, emergency services and nursing quality at New York’s 1,039-bed Mount Sinai Hospital, notes, for example, that conditions such as diabetes and sleep apnea can negatively affect recovery of patients who have undergone surgery.
“Now, you’re not just managing the surgical issue; you also have to manage all these other issues as well,” Wrobbel says. “The surgery can go well, but because of anesthesia and other stressors on the body, it could increase their length of stay.”
When possible, some providers are attempting to address the added clinical costs of caring for obese patients and provide for a quicker recovery by managing certain concerns pre-operatively, Wrobbel says. “Maybe pre-operatively someone goes to an anesthesiologist for an assessment,” she says. “Or we will put off the surgery to aggressively manage their conditions pre-operatively.”
While payer-documented costs give some hint of how obesity-related conditions can drive up healthcare costs, those figures don’t account for the significant nonreimbursable expenses that providers incur to care for severely overweight patients.
Daniel Souders, surgical services product manager for the Kettering Health Network in
Dayton, Ohio, says those costs can include higher prices for longer needles and surgical clamps capable of penetrating and handling a greater mass of skin; enlarged doorways and specially constructed bathroom fixtures to accommodate larger patients; and added staff to bathe, transport and monitor severely overweight patients.
There can be other hidden costs as well. Geisinger, for example, has a staff training program that addresses sensitivity issues associated with caring for severely overweight patients. It also teaches caregivers to properly lift and transport obese patients.
“There are certain concerns there, because we want to make sure we don’t injure the patient or the workers,” says Geisinger supply chain executive Templeton.
Providers also can incur additional costs for surgical supplies such as anesthesia and sutures since surgeons typically need to use greater quantities or more-expensive versions of those items when operating on severely overweight patients. But, because the costs of such items are incorporated into a bundled fee charged to payers, hospitals receive no additional reimbursement to cover those expenses.
“Payers don’t pay more for caring for obese patients even though we have additional costs,” Souders says.
A growing number of clinical and healthcare-policy experts are suggesting that, given the rising rates of obesity and its associated complications and costs, it may be time for payers to address the issue of additional reimbursement. Last year, several commenters weighing in on the CMS’ then-proposed hospital reimbursement rules suggested that the agency reclassify obesity as a complication or comorbidity under the 2010 Medicare inpatient prospective payment system rule. That reclassification would allow hospitals to bill the CMS for additional reimbursement when caring for patients diag- nosed as obese—a BMI of 35 or higher. The commenters, according to a May 4 Federal Reg
ister notice, said obesity added “to the complexity of care for patients” undergoing certain procedures such as orthopedic surgery.
According to a CMS spokeswoman, the agency reconsidered the obesity reclassification request for the 2011 inpatient PPS rules. But after reviewing available cost impact data, the agency—which was scheduled to publish its final rules for 2011 on Aug. 1, 2010—said it was not proposing such a reclassification.
The data found, for example, that hospital costs for a morbidly obese patient without a secondary diagnosis such as diabetes or hypertension was not substantially more expensive than the expected cost of care for all patients with a particular condition. The cost ratios provided by the CMS in the proposed inpatient PPS rule were unclear however, and
Modern Healthcare was unable to use them to determine a percentage difference in care costs between obese patients and the general population. A CMS spokeswoman was also unable to provide an explanation.
Lack of research
But some clinicians and policy experts feel that available data doesn’t adequately reflect the costs of caring for obese patients. They say the CMS and other payers aren’t capturing information that could more accurately reflect those costs.
“There is a lot of guesswork going on,” says Keckley of Deloitte. But he adds that the new International Classification of Diseases coding system—an update of the system used by providers and payers to identify diseases and conditions—set to take effect in 2013 should do a better job of capturing obesity-related healthcare costs. The broader use of electronic health records should also facilitate compiling such date.
Currently, however, efforts to win additional reimbursement appear hampered by a lack of published research comparing the care-episode costs of severely overweight patients to those healthy-weight patients who check into hospitals with identical conditions.
Michael Parks, a hip and knee surgeon with New York’s Hospital for Special Surgery and an assistant professor of orthopedic surgery at Weill Cornell Medical College, has begun initial research comparing the outcomes and cost of care for obese orthopedic surgery patients to patients who aren’t obese. He says he has been surprised by the dearth of prior research in this area.
“As we’ve looked at the work others have done, there’s not been a lot of information, and what does exist is divergent” in its findings, he says.
Oversized wheelchairs to accommodate bariatric patients are just one specialized item adding to the supplychain costs at Castle Medical Center in Kailua, Hawaii.
Denning: Novation has added products to care for obese patients.
Hospitals now stock special equipment to care for obese patients, such as this longer
laparoscopic needle holder, shown at right above a regular