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The Economics of Obesity & Bariatric Surgery

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"Every great cause begins as a movement, becomes a business and eventually degenerates into a racket."
-Eric Hoffer

"Lesson number one: Don't underestimate the other guy's greed."
-Frank Lopez (from the movie Scarface)

"If you got the money, honey
I've got the time"

-Lefty Frizzell

As I note in my new book, Brand New Man: My Weight Loss Journeyy, weight loss is a multi billion dollar business where desire and emotion can overtake reason. Which means it is fertile ground for rip-off artists.

Americans spend more than $60 billion a year trying to lose weight. And only five percent of those people keep the weight off for five years or longer. The best predictors of life expectancy are nutrition, access to quality health care, income and education.

Increased life expectancy is a valid reason to seek better health and body shape. Unless you have a true desire to die at an early age.

Society puts a premium on looks, and "fat shaming" is a form of bigotry that is acceptable by many in the mass media. Television news stories on obesity are normally accompanied by a film clip of some overweight (and usually poorly dressed) person's rear end. Fat people are often stereotyped as lazy and stupid. Through the lens of popular media, an overweight man often has the intellect, manners and physical makeup of Chris Farley or the guy who played Flounder in the movie Animal House. Fat, drunk and stupid.

Billions of dollars of advertising convince us that we need to be thinner and the health risks of obesity are very real. As Michael Pollan, Gary Taubes and others have articulately written, we need to wage a full blown battle against fructose and its addictive properties. I reached a point where I was drinking at least six diet soft drinks a day and dropped them cold turkey. I felt like a junkie kicking heroin. It took a couple of months before the physical cravings went away.

I kept gaining weight and I kept spending time and money in a vain attempt to fight back. I am cool and rational in a business setting, but emotions would take over when the issue turned to weight loss. I wanted to believe. I wanted to find the quick and ultimate answer.

Finally, I realized that I had to do what I understood how to do in business: Take emotion out of the decision making and develop a plan based on facts.

I had to consider every option that would lead to a long-term solution. Just like I would in a business setting. For the first time in my life, weight loss surgery made it to my list of options.

My Long, Strange Trip to Bariatric Surgery

"Lately it occurs to me
What a long, strange trip it's been"

-The Grateful Dead

"Only Nixon could go to China."
-Vulcan proverb quoted by Mr. Spock in Star Trek VI: The Undiscovered Country

It's hard to believe I am a living example of the advantages of weight loss surgery.

In my work as a structured settlement and litigation-related consultant, I've seen several situations where people died from gastric bypass surgery. I've gotten to know the intimate details of how they died and know their families. If your primary experience with skydiving is dealing with the families of people who died during jumps, you are less inclined to embrace the idea of parachuting yourself. That's exactly how I felt about weight loss surgery. Not only was I opposed to it, I tried to talk anyone and everyone out of doing it. All I knew were the horror stories.

I've never had a client die during a Weight Watchers meeting. But if morbid obesity knocks 10 years off your life, you are dying slowly and painfully as opposed to dying quickly. There is a point where radical measures are needed.

I was at that point.

A few years ago, one of my trial lawyer friends was discussing weight loss surgery and noted, "They don't seem to be killing as many people as they used to." I followed up privately with several star medical malpractice attorneys and found that his statement was correct. When you look at the numbers, weight loss surgery had gotten safer.

A study published in the March 2014 Journal of the American Medical Association concluded that "death rates are, in general, very low." The study showed that the death rate was between 0.08 percent and 0.31 percent. The team went through 150 studies of weight loss surgery, involving 162,000 patients. The average BMI of the group was 46. A BMI of 46 on a person six-foot-tall (like I am) would mean a weight of 339 pounds. The study showed that their BMI dropped between 12 and 17 points in the five years following surgery.

Translating BMI to layman's terms, that means if a person had weighed in at 330 pounds before weight loss surgery, five years later, he or she would weigh between 250 and 214 pounds. A weight loss between 80 and 116 pounds.

I'd been incredibly lucky. I made it to age 55 without heart disease or permanent injuries. I've been on blood pressure medicine since age 25 and used a CPAP for sleep apnea for more than 20 years. I was just starting to inch across the border from pre-diabetic to diabetic. My cholesterol level is low. I'd been in the hospital twice for short stays unrelated to obesity. Once when I was five years old and once when I was 50. Yet, I was 140 pounds overweight.

The odds of me living a longer life after weight loss surgery were better than dying during the surgery. My decision was strictly based on health and longevity. To focus on looks and sex appeal diminishes the basic message of weight loss: this is all about health.

The Illogical World of Bariatric Surgery and Health Insurance


"It's a fact - I'm a quack
The disgrace of the A.M.A.
'Cause my patients die, yah my patients die
Before they can pay"
-"Like a Surgeon" by Weird Al Yankovic

"A new car built by my company leaves somewhere travelling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don't do one."
-Ed Norton's character in the movie Fight Club

"America's health care system is neither healthy, caring, nor a system."
-Walter Cronkite

I went into the process of weight loss surgery backwards. My first goal was to get a hospital that would allow me to have it.

When I decided to make a move, I found that I could not purchase a plan for my small business or an individual health insurance policy that would even cover the COMPLICATIONS of weight loss surgery. I purchased Anthem group insurance for my Kentucky-based businesses and pay 100 percent of the premium for my employees and their families. I had insurance brokers search high and low for a policy that would cover weight loss surgery. No luck. My employees were willing to switch to a different plan if it could help me get weight loss surgery, but we had nowhere to go.

I wound up paying for my own weight loss surgery, but complications remained an overwhelming concern. If I had a heart attack during surgery or the day after, my health insurance wouldn't cover it. If I didn't get the surgery and had a heart attack induced by my obesity, the insurer would pay for that. They would also pay for all my blood pressure medicines, CPAPs, diabetes medicines, walkers, amputations, hospital stays and doctor visits if I did not get surgery.

The insurance company attitude doesn't make sense long-term, but the companies are not thinking long-term. One of the big arguments in favor of a single-payer system for health insurance is that insurance companies are not interested in solutions to long-term problems. Like most publicly traded companies, health insurance companies are focused on the next fiscal quarter, not the next decade. What is best for the patient may not be best for the immediate profit margin.

From a cash flow basis, many health insurance carriers find it more profitable to pay for medicines, sleep apnea equipment, doctor and hospital visits and things associated with obesity than to write a large, one-time check for weight loss surgery. People can change insurance carriers on a regular basis, and an insurer can write a check to make a person healthy only to have them jump to another company. According to the Obesity Action Coalition, the cost of surgery is paid for in 3.5 years, but most health insurance carriers choose the immediate over the long-term.

Anthem Insurance hit the jackpot with me. I paid for my own surgery and dramatically decreased my risk factors. They did not have to pay a dime for that result.

Risk management can be like the decisions that Ed Norton's character made in the movie Fight Club. He decided it was cheaper to let people die than to fix a small automobile problem. Many real life car manufacturers make the same decision.

What is logical in health care is not always most immediately profitable for the insurance company.

I've spent years and hundreds of hours looking for bariatric coverage. There are 974 pages in the Affordable Care Act. I've read them all, looking for a provision that would help me. No luck. No insurance carrier in Kentucky offers small businesses, or individuals not receiving Medicaid, a chance to buy a plan that will cover bariatric surgery or its complications.

If I lost all my money and went on Medicaid, I could get the surgery for free. If I managed to stay healthy until age 65 and go on Medicare, I could get the surgery for free. If I was in Congress, my insurance would pay for the surgery and its complications. Most government entities offer insurance that covers the surgery and its complications. If I worked for a large company, most of them offer weight loss surgery, or at least cover the complications of weight loss surgery.

Bariatric surgery is an example of where Main Street loses to Wall Street. Small businesses can't buy the same kind of coverage as people who are richer, poorer or work for a large organization. Some individuals and small businesses can get coverage for obesity surgery through a health insurance exchange. It all depends on where you live. Kentucky joined roughly two dozen other states in not offering obesity surgery as part of their health insurance exchange. A story on NPR noted the almost direct correlation between the states with highest obesity problems and the states that are not offering obesity surgery through their exchanges.

The worse the obesity problem, the less the politicians want to do anything about it.

I decided to pay for my own surgery, but then I had to find a hospital that would take me. A few years ago, I went to a seminar (every bariatric program makes you sit through a seminar like you are signing up to participate in a multi-level marketing program) for a hospital based in Central Kentucky, and they made me leave the seminar when they found out what kind of health insurance I had.

This time around, I was determined to keep looking.

How I Found BLIS in the Health Insurance World

"Don't you know things can change
Things'll go your way
If you hold on for one more day"

-Wilson Phillips

"Help me if you can, I'm feeling down
And I do appreciate you being 'round
Help me get my feet back on the ground
Won't you please, please help me?"

-The Beatles

"High risk insurance
The time is right"

-The Ramones

BLIS is a fascinating specialty insurance program run by Regi Schindler in Oregon. His customers are people paying for their own weight loss surgery. Schindler uses the analogy that BLIS is similar to a warranty on a new car. It allows patients the comfort of knowing that if something goes wrong, they won't be hit with additional medical expenses.

Because of BLIS, I was able to have weight loss surgery on Dec. 1, 2014.

Schindler has skin in the game. If a surgery goes wrong, his company is on the hook. Following the car warranty analogy, it could be the cost of some new wheel covers, but in today's expensive health care world, it might be the cost of a new Mercedes or maybe a fleet of Mercedes with a Cadillac thrown in. Schindler is very choosy about who he insures. His data and loss ratio calculations come to the same conclusion: it is not about the patient. It's not about the facility where you do your bariatric surgery. What makes the difference to BLIS is the surgeon who does the work.

Schindler has an extensive background in medical risk management, including several years at the Mayo Clinic, but in 2005 he left the safety net of a corporate career to develop an insurance concept he is passionate about.

Regi helped to create a terrific idea in offering insurance coverage for specialty types of surgery, such as bariatric surgery, plastic surgery and orthopedics that many insurance carriers don't cover. Schindler calls his program "surgeon-centric" and in a 2012 article in Bariatric Times, he explains his business model in intricate details. I assumed that BLIS would base their pricing on the health of the individual patient. Instead, it is based on the type of procedure and the experience BLIS has had with the surgeon doing the procedure.

When I asked Schindler to sum up by saying, "the better the surgeon, the lower the patient's premium," he tended to agree. Regi has built the company with a laser focus on getting excellent surgeons to participate.

Like any insurance provider, BLIS wants to keep their claims low and track the individual results and outcomes to make sure that the surgeons in their program are doing their best to stop minor complications from becoming major complications. BLIS and I had parallel goals. They wanted to increase access to surgery for as many people as possible. I wanted to increase access to surgery for me. Schindler is passionate in his commitment to offering a way for people to have surgery that could not previously and is focused on improving the patient experience.

Surgeons in the BLIS program have a number of incentives to look at the bigger picture and focus on minimizing and avoiding complications. I was thankful that BLIS is not a traditional health insurance carrier and has a model that seems to put patients over profits. On the other hand, I was a profitable client for BLIS. I purchased coverage which cost me $1,697.23 and I never had a complication or claim. I came away a happy customer. BLIS came away with $1,697.23. A win-win.

My frustration is that I did not find BLIS five years ago. In my hundreds of hours of searching, I kept looking at traditional health insurance carriers, rather than looking for a company like BLIS. None of my physicians, or physician friends, had ever heard of BLIS. BLIS is well thought of by the surgeons who use their services. Since that universe is extremely small and focused, the name recognition for BLIS amongst people outside that world is low. But people are finding their way to BLIS. According to their website, which Regi confirmed, the company has offered protection on 14,000 cases since 2006.

BLIS brought a degree of sanity to the illogical world of health insurance for weight loss surgery.

Why I Can Say I Am a Brand New Man

Sixteen months after weight loss surgery, I am 113 pounds lighter. My diabetes and many other ailments have reversed. At age 57, I am competing in the 2016 Crossfit Games.

The economics of obesity have been hard to navigate, but the rewards of getting to the goal line have been tremendous.

Don McNay, ChFC, MSFS, CLU, CSSC is a financial expert, journalist and author of seven best-selling books. His new book, Brand New Man: My Weight Loss Journey, released on Feb. 27.

McNay is one of the world's best known experts on structured settlements and how lottery winners handle their money. He lives in Lexington, Kentucky, and you can learn more about him at

McNay has a Masters Degree from Vanderbilt University and a second Masters Degree from the American College. He has four professional designations and is in the Eastern Kentucky University Hall of Distinguished Alumni.

McNay has been a Huffington Post contributor since 2008 and his insights have appeared in hundreds of publications, including the New York Times, Washington Post, Time Magazine, Los Angeles Times, Forbes and USA Today. He has appeared on television and radio programs around the world including CBS Morning News, CBS Evening News, ABC News Radio, AM Canada, CTV News and RAI Television in Italy.