Hospitals See Demand for Bariatric Surgeries Drop as Use of Medications for Weight Management Increases, According to New Strata Report
November 14, 2024
Higher wages for hospital employees contribute to rising labor costs
CHICAGO – November 14, 2024 – U.S. hospitals have seen a sizable drop in the number of bariatric surgeries in recent years, according to a new report from Strata Decision Technology.
While rates of bariatric surgeries fluctuate month to month, they have generally declined over the past few years, with monthly rates in both 2023 and 2024 falling below the prior years. For example, the number of bariatric surgeries decreased more than 32% from 3,924 in August 2022 to 2,658 in August 2024, based on the latest data available from a sample of 809 hospitals nationwide. As a proportion of all inpatient encounters, bariatric surgeries dropped from 0.69% in August 2022 to 0.43% in August 2024.
“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.”
The general drop in bariatric surgeries corresponds with rising use of semaglutide. Such medications were initially approved to treat Type 2 Diabetes in late 2017. The Food and Drug Administration approved one brand of semaglutide for chronic weight management in adults in June 2021, and expanded approval to those ages 12 and older in December 2022. The number of semaglutide prescriptions filled jumped more than 400% between January 2021 and December 2023, according to an August 2024 JAMA study.
Hospital margins for bariatric surgeries also have declined as volumes of such procedures have declined. The average total cost margin for bariatric surgeries decreased from $1,651.63 per procedure in January 2021 to -$504.83 as of the latest data from June 2024. Total cost margin is the median margin per procedure after accounting for all costs, including both direct patient care and overhead expenses.
Strata’s analysis examined inpatient bariatric surgeries, because such surgeries are done primarily on an inpatient basis. The data show that the number of surgeries tend to spike each year in December and then drop in January, likely due to individuals seeking to use their insurance deductibles before the start of a new year.
Higher wages contribute to rising labor expenses
In a separate analysis, Strata found that hospitals nationwide continue to feel the effects of rising labor and non-labor costs. At a national level, total labor expense increased 5.2% year-over-year (YOY) in September. Increases in the metric varied for hospitals in different regions. Hospitals in the West had the biggest YOY increase at 6.2% from September 2023 to September 2024, while hospitals in the Midwest had the least increase at 4.3% over the same period.
Higher wages are one contributing factor, as hospitals have increased pay to recruit and retain qualified healthcare professionals. Compared to September 2023, the average hourly pay rate for hospital employees nationwide was up 1.6% in September 2024. Using September 2023 as a baseline, hourly hospital pay rates rose for eight of the first nine months of 2024. The biggest increase was in June, when the average hourly rate was up 1.9%, and the only exception was July, when the average hourly rate was unchanged compared to September 2023.
Read the Q3 2024 Strata Performance Trends report to learn more.
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.
About Strata Decision Technology
Strata Decision Technology provides a cloud-based platform for software and service solutions to help organizations better analyze, plan, and perform in support of their missions. With the combination of Syntellis Performance Solutions’ Axiom solutions, more than 2,300 organizations rely on Strata to provide their financial analytics, planning, and performance solutions. Strata has been named the market leader for Business Decision Support for 18 consecutive years. By uniting these two industry leaders, Strata continues to deliver market-leading solutions and world-class service, with an increased focus on accelerating innovation. For more information, please go to www.stratadecision.com.
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