How’s Business?: Weighty matters

By Joe Palumbo

Move over, surgical heart care; there is a new guy in town. It is an up-and-coming medical specialty that is growing in popularity at an extremely fast pace, and its numbers just may top those of heart surgery procedures.

It’s called gastric-bypass surgery, more popularly known as stomach stapling. So just what is gastric-bypass surgery? The procedure entails the creation of a quarter- to half dollar-sized opening at the top of the stomach. This is performed by using surgical staples. The small intestine is shortened by 48 inches so the food bypasses the main section of the stomach.

Undergoing such a procedure is not always only for weight reduction but for the relief of what could be life-threatening illnesses. Obesity can lead to type 2 diabetes, excessive cholesterol, heart disease and even hypertension. Those who are increasingly in danger of or who already are captive to such diseases are seeking relief, which is leading to nothing less than a boom for gastric-bypass surgery.

Want to know how much of a boom? From 2001 to 2003 we’re talking 2,900 percent. And why not? About eight out of 10 patients who have undergone this procedure manage to attain healthy weights within two years of their operations. That has certainly opened the eyes of both hospitals and surgeons. But what’s the profitability?

The surgery inclusive of hospital stays and follow-up care can run between $30,000 to $50,000. That’s the up side. The down side in profitability is that hospitals often have difficulty obtaining full reimbursements from insurance carriers. Nevertheless, hospitals are climbing on the bandwagon.

One such hospital in Queens is North Shore University in Forest Hills, which started offering the procedure last May. Another location with plans to start performing the surgery mid-year is the Long Island Jewish Medical Center, right across the border in Nassau County.

I asked a top surgeon, Dr. Savasatit in Flushing, what he thought. Savasatit said the procedures work but what must be understood is that a lifetime of supervision will be required.

So how’s business for hospitals and surgeons in gastric-bypass surgery? The numbers speak for themselves. With the ever-growing demand for this procedure, it appears quite clear that continued successful post-surgical results will lead to an extraordinary demand for specialized surgeons in this field.

Joe Palumbo is the fund manager of The Palco Group Inc., an investment company, and can be reached at palcogroup@aol.com or 718-461-8317.

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