Despite a growing burden of disease in the U.S., demand for healthcare services has remained flat to declining for years, which is projected to continue. While it may seem logical to conclude that a sicker population would result in increased healthcare utilization, demand is a function of both disease burden and population characteristics, which include patients' healthcare-seeking behaviors, ability to pay, care delivery preferences and overall trust in the healthcare system.
Utilization of healthcare services has been flat to declining for decades. Between 1970 and 2023, inpatient admissions per 1,000 U.S. population declined by 34.0% from 142.7 to 94.2 per 1,000 (Figure 1).
Demographics directly influence the volume and type of healthcare services used, yet population growth or decline does not always align with demand for services. The relationship between population change and healthcare utilization is influenced by demographic and clinical factors. A market experiencing rapid population growth in a younger, healthier population may experience declining surgical incidence rates, while a market with a declining population may experience increasing surgical volumes as its population ages and accumulates chronic conditions.
These complex dynamics challenge traditional and deeply held assumptions about healthcare strategic planning. A growing population does not guarantee growing demand for specific service lines, just as population loss does not necessarily signal declining healthcare demand. For health systems, payers, life sciences companies and investors, understanding the nuanced relationship between population and projected surgical incidence rates is critical for capacity planning, network planning and capital allocation decisions.
Leveraging Trilliant Health's national Demand Forecast, historic and projected surgical incidence rates per 1,000 population were analyzed across CBSAs with populations over 1M. Surgical incidence rates were examined for four major service lines: musculoskeletal, digestive, heart/vascular and neurosurgical procedures. Projected compound annual growth rates (CAGR) were calculated for the period 2025-2030 and compared to projected population growth rates for the same period. Analysis included both inpatient and outpatient surgical settings.
Patterns in projected surgical incidence rate CAGR from 2025 to 2030 are frequently not aligned with projected population growth. For example, Orlando, FL is projected to grow in population but decline in surgical demand, while the opposite is expected in Rochester, NY (Figure 3). While Orlando, FL’s annual projected population change from 2025 to 2030 is 231,319, the surgical incidence CAGR is -0.9%.
📌 The figure below is interactive. Hover over the bar(s) for more information.
Based on the overall surgical musculoskeletal incidence rate projections from 2025-2030, projected outpatient surgical incidence rates vary across CBSAs with over 1M population, with CAGR ranging from -0.8% in Austin-Round Rock-San Marcos, TX to 1.8% in Buffalo-Cheektowaga, NY (Figure 5). Projected inpatient surgical incidence rates demonstrate consistent decline across all markets, ranging from -0.7% in Dallas-Fort Worth-Arlington, TX to -2.3% CAGR in Buffalo-Cheektowaga, NY and Baltimore-Columbia-Towson, MD. Hartford-West Hartford-East Hartford, CT (1.3%, -1.6%), Rochester, NY (1.7%, -1.1%) and Omaha, NE-IA (1.1%, -2.2%) show substantial divergence between their projected outpatient and inpatient surgical incidence rates, respectively. In contrast, several markets display more closely aligned trends between settings. Dallas-Fort Worth-Arlington, TX shows the smallest differential at 0.9 percentage points, 0.2% outpatient CAGR and -0.7% inpatient CAGR. Tampa-St. Petersburg-Clearwater, FL and Cleveland, OH both project 0.0% outpatient surgical incidence rate CAGR, and -1.8% and -1.4% projected inpatient surgical incidence rate CAGR, respectively.
📌 The figure below is interactive. Hover over the bar(s) for more information.
As the U.S. continues to struggle to contain runaway health costs, efficient and effective stewardship of capital resources is paramount. For decades, health economy stakeholders have assumed that the growing, aging and increasingly obese U.S. population would manifest in long-term growth in utilization of healthcare services. The lack of observable correlation between population trends and surgical incidence rates challenges those assumptions. As a result, stakeholders who rely solely on demographic trends to develop demand models that inform strategy are almost certain to misallocate resources and fall short of meeting population-level healthcare needs. It is axiomatic that healthcare is local, so national demand trends are suboptimal to inform strategic plans.
Just as demand varies at the market level, technology and regulatory changes can impact the site of service for the demand that materializes. For example, the universal decline in inpatient musculoskeletal surgical incidence rates across all major metropolitan areas, paired with varied outpatient trends, underscores ongoing changes in care delivery settings that operate independently of population dynamics. CMS’s proposed removal of hundreds of musculoskeletal procedures from the Medicare Inpatient Only (IPO) list is likely to accelerate those trends based upon observable trends after the removal of total hip and total knee arthroplasty from the IPO list.1
In addition to changes in population, disease incidence and site-of-care, the emergence of novel therapeutics poses an additional threat to surgical volume growth.2 GLP-1s have demonstrated efficacy in reducing the need for bariatric surgery, while disease-modifying therapies for osteoarthritis could delay or eliminate joint replacement procedures. Advances in biologic treatments for inflammatory conditions, regenerative medicine approaches and minimally invasive interventions continue to expand the range of conditions that can be managed without surgery. As pharmaceutical innovation accelerates, particularly in areas like obesity, diabetes, cardiovascular disease and musculoskeletal disorders, stakeholders must anticipate that surgical incidence rates may decline even in markets with projected surgical demand growth. The compounding effect of therapeutic substitution fosters heightened uncertainty around traditional surgical volume forecasts.
Ultimately, the data presented here underscore a simple but consequential reality: national trends obscure local market dynamics that determine financial performance and patient access. Stakeholders who incorporate granular, market-specific demand projections into their strategic planning will be better positioned to focus on markets in which they can optimize capital allocation and yield.