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Context. The most advanced and fastest growing form of bariatric surgery is laparoscopic gastric bypass. Very little is known about population-based 180-day laparoscopic bypass costs, complication rates, readmission rates, and post-operative care.

Objective. To examine the 6-month costs and outcomes of laparoscopic vs. open bariatric bypass surgery using a national population-based sample.

Design. We use the 1998–2003 Nationwide Inpatient Sample to examine national trends in the rate of laparoscopic bypass. To examine post-operative outcomes, we examine insurance claims for 2,384 bariatric bypass surgeries, at 308 hospitals, among a population of 5.6 million non-elderly people covered by large employers across 49 states in 2001 and 2002. Multivariate logit regression analysis is performed to risk-adjust outcomes.

Main Outcome Measures. 180-day outcomes: 12 complications specific to bariatric surgery and 44 general post-operative conditions, readmission rates, ER rates, and expenditures following bariatric surgery.

Results. Between 1998 and 2003, the national percentage of bariatric bypass surgeries that were laparoscopic grew from 1.5 to 17.1%. There was no significant difference in in-hospital mortality between laparoscopy and open surgery. With the 2001–2002 claims data, we find that of the patients having bypass surgery, men had 48% lower odds of having laparoscopy and that high bariatric volume hospitals were close to four times more likely to use laparoscopy. Laparoscopic bypass, compared with open bypass, had 34% lower odds of a complication during the initial surgical stay, 27% lower odds of a 30-day complication, but no statistically significant difference in 180-day complications. Laparoscopy had 49% higher odds of having the general 44 post-operative conditions, with 45% higher odds of a readmission and 54% higher odds of an ER visit. However, overall, laparoscopy resulted in a 23% lower number of hospital days and 9% lower 180-day expenditures.

Conclusion. The laparoscopic cost-savings during the less invasive initial surgery stay outweigh the increase in post-discharge utilization. Further cost-savings will only emerge from laparoscopy only if its late post-operative complications are reduced. More cost-savings will also emerge as more physicians switch to the use of laparoscopy for bypass surgery.

Purpose – To estimate the impact of diabetic drug adherence on hospitalizations, emergency room (ER) visits, and hospital costs.

Methods – It is often difficult to measure the impact of drug adherence on hospitalizations since both adherence and hospitalizations may be correlated with unobservable patient severity. We control for such unobservables using propensity score methods and instrumental variables for adherence such as drug coinsurance levels and direct-to-consumer advertising.

Findings – We find a significant bias due to unobservable severity in that patients with more severe health are more apt to comply with medications. Thus, the relationship between adherence and hospitalization will be underestimated if one does not control for unobservable severity. Overall, we find that increasing diabetic drug adherence from 50% to 100% reduces the hospitalization rate by 23.3% from 15% to 11.5%. ER visits reduce by 46.2% from 17.3% to 9.3%. Although such an increase in adherence increases diabetic drug spending by $776 a year per diabetic, the cost savings for averted hospitalizations and ER visits are $886 per diabetic, a cost offset of $1.14 per $1.00 spent on diabetic drugs.

Originality – Most of the drug cost-offset literature focuses only on the impact of cost-sharing and drug spending on cost-offsets, making it impossible to back-out the empirical impact of actual drug adherence on cost-offsets. In this chapter, we estimate the direct impact of adherence on hospitalizations and costs.

Five papers in the volume use economic models to predict obesity and related behaviours. Two of the papers are theoretical. Liqun Liu, Andrew J. Rettenmaier, and Thomas R. Saving analyse the importance of food quality for bodyweight. Bodyweight is treated as a variable of choice – the individual derives utility from health, food consumption and consumption of a composite good. Bodyweight is assumed to decrease health whenever it differs from its physiologically optimal level. Their model implies that much of further income growth will be used to improve food quality rather than increase caloric intake.

This paper is a study of how people with heterogonous individual characteristics self-select into different compensation schemes. A laboratory experiment is designed in which “workers” can join “companies” that pay according to various schemes: piece rate, revenue sharing, individual tournament, and team tournament. The main findings are: (1) Subjects with high relative performance always prefer individual tournament. (2) Risk-averse subjects are less likely to choose competitive schemes. (3) Individual tournament attracts fewer women than men, which is partially explained by gender-specific social preferences. (4) Compared to people with siblings, only children are less likely to accept any team-based schemes without information about their teammates. (5) The provision of feedback about relative performance can adjust individuals’ biased self-beliefs and then influence their self-selections.