Life Sciences Blog

The impact of Medicare coverage for anti-obesity interventions




Obesity is acknowledged as a critical public health concern in the US. The economic burden of the disease is not insignificant. Estimates vary, but a recent study suggested that in the US, the cost of obesity, and obesity-related treatments, was approximately $427.8 billion in 2014, an amount that has undoubtedly escalated in the years that followed owing to the increasing numbers of individuals with obesity. Using a validated and published microsimulation model, we predicted the budget impact to Medicare if the coverage utilization of anti-obesity interventions becomes higher among the elderly.

Over the next 10 years, Medicare is expected to save $19 billion after a modest coverage utilization, and $21 billion after a more aggressive coverage utilization, with the majority of the savings coming from reduction in ambulatory care (Part B) and prescription drug (Part D) expenditures. Even after an aggressive (67.4%) coverage utilization, the evidence shows ≤8% of all Medicare beneficiaries to receive some form of anti-obesity treatment. 

Additional Findings

  • On average, lifestyle intervention helps elderly who are eligible lose 7.5% of excessive weight per year, and anti-obesity drug combined with lifestyle intervention can help eligible patients lose about 9.7%. Participants regain 1/3 of initial lost weight within 5 years after discontinuation
  • Each treated beneficiary is expected to incur direct costs to Medicare of ~$1,700 from covered anti-obesity treatment. Those costs will be offset by improvement in their overall health condition, leading to lower expenditures in ER, ambulatory care, inpatient stays, and Rx, resulting in net savings between $6,700 - $7,100 over 10 years per person
  • Across the entire Medicare population suggest medical expense would increase about $120 per beneficiary due to higher coverage utilization. The reduction in the cost of treating obesity complications would be more than enough to offset the increased expense, leading to a net savings of between $300 - $330 per beneficiary over 10 years


Our simulation suggests there are likely to be sizable long-term Medicare budget savings due to higher utilization of anti-obesity interventions (lifestyle interventions and/or anti-obesity medications). Download the whitepaper along with a description of the modeling approach and analysis design.

Wayne Su is a Senior Principal Life Sciences Consultant at IHS Markit
Posted 7 December 2017

About The Author

Wayne Su is a Senior Consultant within the Life Sciences practice at IHS. His work ranges from forecasting, pricing, reimbursement (including HTA submission), and market access, to company-wide business strategies. As a health economist, Wayne is an expert in implementing economic theory, statistical analysis and advanced modeling techniques. His work has been published in peer-reviewed journals and international conferences such as Journal of Medical Economics, Value in Health, Clinical Therapeutics, ClinicoEconomics and Outcomes Research, International Society of Pharmacoeconomics and Outcomes Research (ISPOR), American Society of Clinical Oncology (ASCO), to name a few.