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Bariatric Surgeries Decline as GLP-1s Use Rises, Impacting Hospital Margins

by Jasmine Pennic 11/15/2024 Leave a Comment

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What You Should Know: 

– A new report from Strata Decision Technology reveals a significant decline in the number of bariatric surgeries performed in U.S. hospitals in recent years. 

– The trend coincides with the rising popularity of weight-loss medications like semaglutide (GLP-1s), which have gained widespread adoption since their approval for chronic weight management.

Declining Surgical Volumes

Strata’s analysis of data from 809 hospitals nationwide shows a clear downward trend in bariatric surgeries. In August 2024, the number of these procedures decreased by over 32% compared to August 2022. This decline corresponds with a substantial increase in semaglutide prescriptions, which jumped over 400% between January 2021 and December 2023, according to a JAMA study.

Impact on Hospital Margins

The decrease in bariatric surgeries has also affected hospital margins. The average total cost margin for these procedures has declined significantly, going from a positive $1,651.63 per procedure in January 2021 to a negative -$504.83 by June 2024. This suggests that hospitals are facing financial challenges as the volume of these profitable procedures decreases.

Shifting Landscape of Weight Management

The rise of semaglutide and other weight-loss medications is changing the landscape of weight management. These medications offer a non-surgical option for individuals seeking to lose weight, potentially reducing the demand for bariatric surgery.

Other Factors Affecting Hospital Finances

In addition to the decline in bariatric surgeries, hospitals are also grappling with rising labor and non-labor costs. Strata’s analysis found that total labor expenses increased by 5.2% year-over-year in September 2024, driven in part by higher wages to attract and retain healthcare professionals.

Implications for Hospitals

These trends have significant implications for hospitals and health systems. As the demand for bariatric surgery decreases and labor costs rise, hospitals need to adapt their strategies to maintain financial stability and meet the evolving needs of patients seeking weight management solutions. This may involve:

  • Expanding weight management services: Offering comprehensive weight management programs that include both surgical and non-surgical options.
  • Optimizing surgical services: Improving efficiency and cost-effectiveness of bariatric surgery programs.
  • Managing labor costs: Implementing strategies to address rising labor expenses while ensuring adequate staffing levels.
  • Exploring alternative revenue streams: Identifying new opportunities to generate revenue and offset potential losses from declining surgical volumes.

“The general decline in bariatric surgeries coincides with a significant spike in the use of certain medications to help patients with chronic weight management,” said Steve Wasson, chief data and intelligence officer at Strata Decision Technology. “These trends serve as just one example of the dynamics that impact hospitals’ both clinically and financially, as such procedures once contributed positively to hospital margins but are now a drain on hospital resources.” 

About the Data  
The report uses data from Strata’s StrataSphere® and Comparative Analytics database. Comparative Analytics offers access to near real-time data drawn from more than 135,000 physicians from over 10,000 practices and 139 specialty categories, and from 500+ unique departments across more than 1,600 hospitals. Comparative Analytics also provides data and comparisons specific to a single organization for visibility into how their market is evolving. StrataSphere is a unique and comprehensive data-sharing platform that helps providers leverage the power of a network that represents approximately 25% of all provider spend in U.S. healthcare. This report incorporates data from more than 600 hospitals with StrataJazz® Decision Support.

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Tagged With: GLP-1

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