For-profit diet clinics are booming, already bringing in $1 billion annually and predicted to grow 5% a year over the next 4 years according to a 07/04/15 article in the NY Times, “In Health Law, a Boon for Diet Clinics.” This is fueled, in part, by the obesity epidemic—75% of men and 67% of women in the U.S. are overweight or obese.

And, as the Times article points out, doctors at these for-profit clinics have wasted no time taking advantage of a provision in the Affordable Care Act (ACA) that requires insurers to pay for nutrition and obesity screening—proving once again, when it comes to healthcare no good turn goes unexploited.

Gallup Obesity graph


Obesity is a medical diagnosis

Now, I am a fan of treating obesity as a medical diagnosis—it is. But I am not a fan of for-profit institutions that take advantage of people’s desperation selling them quick fix programs that do not work over the long run, particularly when they are receiving reimbursement from insurance companies.

Weight loss and weight maintenance are hard work. A six-week program or even a 6-month program does not resolve the problem for the vast majority of overweight/obese people. Nor do diet pills, nutritional supplements (sorry, not even Green Coffee Beans or Garcinia cambogia), or injections of vitamins.

I know it is boring, but life-long dietary changes and exercise regimens are what is needed. And for some, particularly individuals with Type II diabetes, bariatric surgery may be a crucial intervention.


Fee-for-service plus third party payment is once again the problem

B12 injections NYT
Dr. Kaplan promotes B12 injections even though they aren’t proven saying, “they do not hurt.” Photo from NYT

I could go on and on about the complexity of obesity and the challenges of weight loss, but what I want to focus on here is how fee-for-service (FFS) plus third party payment is once again fueling supply-side over-utilization. Dr. Michael Kaplan, who runs the Long Island Weight Loss Institute was featured in the NYT piece. He is quoted as saying, “We’ve been in a rapid expansion mode as a result of the insurance companies covering obesity treatment.” He estimates that docs can earn as much as $3,000 per year for each obese patient.

John LaRosa, research director at Marketdata Enterprises, also featured in the article, studies the weight loss industry. He has advised “entrepreneurs how to open their own weight-loss clinics to take advantage of the new stream of insurance coverage.”

In an FFS reimbursement system, docs earn money by selling services regardless of whether those services provide health gains to their customers (a.k.a. patients). When patients are shielded from those costs because insurance pays for it, it is a gold mine for sellers of the service.

We already know the corrupting influence of FFS insurance reimbursement. It has fueled exploding healthcare costs for decades. The alternative, increasingly being touted as a way to slow healthcare costs, is to pay for outcomes. After all, that is what the consumer hopes they will be getting when they “purchase” services from their medical providers, right? Imagine what would happen if diet clinics only got paid if the client actually lost weight and kept it off for at least a year?



It is distressing to read about voraciousness and growth of the for-profit weight loss industry in the same week that health insurers announced they are seeking gigantic rate increases for 2016. Anyone who thinks an unencumbered “free market” means that healthcare costs will be moderated is downright delusional (or else stands to gain financially from an unfettered market). Regulations (combined with careful monitoring and enforcement) that require insurers only reimburse services that have a reasonable evidence-based to suggest safety and efficacy are critical, else we find ourselves continuing to pay more and more and keep on getting less and less.

Featured photo credit: Geoffrey Whiteway | via



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