Objective: To estimate the time to breakeven and 5-year net costs for laparoscopic adjustable gastric banding among obese patients with diabetes taking direct and indirect costs into account. Methods: Indirect cost savings were generated by quantifying the cross-sectional relationship between medical expenditures and absenteeism and between medical expenditures and presenteeism (reduced on-the-job productivity) and simulating indirect cost savings based on these multipliers and reductions in direct medical costs available in the literature. Results: Time to breakeven was estimated to be nine quarters with and without the inclusion of indirect costs. After 5 years, net savings increase from $26 570 ( +/- $ 9000) to $34 160 ( +/- $ 10 380) when indirect costs are included. Conclusion: This study presented a novel approach for incorporating indirect costs into cost-benefit analyses. Application to gastric banding revealed that inclusion of indirect costs improves the financial outlook for the procedure
