Please ensure Javascript is enabled for purposes of website accessibility

How Helping Others Lose Weight Could Save You Money

By Keith Speights - Apr 2, 2013 at 1:33PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Obesity is costing Americans a lot of money. A new study points to a way to help people lose weight and save money at the same time.

Do you know someone who needs to lose weight? Helping them do so could end up saving you money over the long run. What's more, even helping a total stranger lose weight could save you money as well. How can this be true? We first need to take a look at Medicare. 

Nearly 1.5% of every dollar you make goes to the federal health care program. If you're self-employed, you kick in twice as much because you must pay the employer's portion also. And if you fit in Obamacare's high income classification, you'll tack on another 0.9%. 

But you're really paying even more for Medicare. Of the $530 billion received by the federal program in 2011, $223 billion came from the general Treasury fund and only around $196 billion derived from payroll taxes. The government actually spent $550 billion -- more than it received. That total amounts to a little over $12,000 spent per enrollee.

As Medicare spending grows, more money will be needed. Guess who's going to pay up? All of us. However, if the spending could somehow be controlled, taxpayers should be able to hang on to more of their hard-earned dollars. That's where a new study comes into play.

Dr. Kenneth Thorpe -- a former Deputy Assistant Secretary for the U.S. Department of Health and Human Services and current chair of the Department of Health Policy and Management at Emory University's Rollins School of Public Health -- led the research team that conducted a study published recently in Health Economics Review. This study found that more than $12,000 per patient could be saved over a 10-year period by helping Medicare beneficiaries lose weight. That comes to as much as $144 billion.

The problem is in actually achieving that weight loss. Bariatric surgery can cost at least $18,000. That wipes out all of the estimated savings. Intensive behavioral therapy, or IBT, for weight loss is much less expensive, but it isn't enough for many obese individuals. Is there another option? Thorpe and his colleagues suggest that combining IBT with new weight-loss drugs could hold the key to helping Medicare beneficiaries lose weight and thereby reducing spending.

Currently, two weight-loss drugs have been approved by the Food and Drug Administration. VIVUS (VVUS) markets Qsymia. Arena Pharmaceuticals (ARNA) stands ready to begin selling Belviq once the Drug Enforcement Administration finalizes scheduling of the obesity drug. Another company, Orexigen Therapeutics (NASDAQ: OREX), hopes to receive approval for Contrave and launch the drug commercially in 2014. The problem for those who think one or more of these drugs could help with lowering Medicare costs is that the program doesn't reimburse patients for taking any of them. Not a dime.

The FDA agreed that Qsymia and Belviq are safe enough for the public. Clinical studies found both drugs to be effective in helping patients lose weight. Even one of the studies that the government used as a basis for its decision to reimburse for IBT concluded that combining weight-loss drugs with behavioral interventions was a good approach. So why doesn't Medicare provide reimbursement for these drugs?

History gives us the answer. Safety problems in the past have marred the image of weight-loss drugs. However, the newer obesity drugs have had to jump through hoops to prove that they are safe to take. Leading companies like Aetna (AET) and pharmacy benefits manager Express Scripts (ESRX) have opted to cover Qsymia. I expect that they -- and others -- will do the same for Belviq and ultimately for Contrave.

Should Medicare follow suit? Yes. While we should note that Thorpe's study was funded by VIVUS, the approach and reasoning used appears to be solid. With so many potential medical complications arising from obesity, significant savings could be attained by helping Medicare beneficiaries lose weight. Clinical studies show that new weight-loss drugs Qsymia and Belviq work and are reasonably safe. My expectation is that the same will hold true for Contrave.

Be glad if part of your tax dollars that go to Medicare are ultimately used to help others lose weight by taking obesity drugs -- or through any other cost-effective way possible, for that matter. Unless something is done differently, the things that will lose the most weight will be our pocketbooks.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Arena Pharmaceuticals, Inc. Stock Quote
Arena Pharmaceuticals, Inc.
VIVUS, Inc. Stock Quote
Aetna Inc. Stock Quote
Aetna Inc.
Express Scripts Holding Company Stock Quote
Express Scripts Holding Company

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/18/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.