Incorporating indirect costs into a cost-benefit analysis of laparoscopic adjustable gastric banding.

Journal Article (Journal Article)


The objective of this study was to estimate the time to breakeven and 5-year net costs of laparoscopic adjustable gastric banding (LAGB) taking both direct and indirect costs and cost savings into account.


Estimates of direct cost savings from LAGB were available from the literature. Although longitudinal data on indirect cost savings were not available, these estimates were generated by quantifying the relationship between medical expenditures and absenteeism and between medical expenditures and presenteeism (reduced on-the-job productivity) and combining these elasticity estimates with estimates of the direct cost savings to generate total savings. These savings were then combined with the direct and indirect costs of the procedure to quantify net savings.


By including indirect costs, the time to breakeven was reduced by half a year, from 16 to 14 quarters. After 5 years, net savings in medical expenditures from a gastric banding procedure were estimated to be $4970 (±$3090). Including absenteeism increased savings to $6180 (±$3550). Savings were further increased to $10,960 (±$5864) when both absenteeism and presenteeism estimates were included.


This study presented a novel approach for including absenteeism and presenteeism estimates in cost-benefit analyses. Application of the approach to gastric banding among surgery-eligible obese employees revealed that the inclusion of indirect costs and cost savings improves the business case for the procedure. This approach can easily be extended to other populations and treatments.

Full Text

Duke Authors

Cited Authors

  • Finkelstein, EA; Allaire, BT; Dibonaventura, MD; Burgess, SM

Published Date

  • March 2012

Published In

Volume / Issue

  • 15 / 2

Start / End Page

  • 299 - 304

PubMed ID

  • 22433761

Electronic International Standard Serial Number (EISSN)

  • 1524-4733

International Standard Serial Number (ISSN)

  • 1098-3015

Digital Object Identifier (DOI)

  • 10.1016/j.jval.2011.12.004


  • eng