Relatively novel pharmaceuticals – particularly for chronic conditions like obesity, cardiovascular disease and cancer – are already reshaping the balance between surgical intervention and non-invasive treatment. While headlines often focus on “blockbuster” drug approvals or updated clinical guidelines (e.g., screening recommendations), GLP-1s, which were theorized in 1906 and invented in 1986, demonstrate the potential magnitude of shifts in care delivery from a single therapeutic, which has important implications for provider financial viability, patient safety and access to care. Similarly, Phlorizin, discovered in 1835, was the precursor for SGLT2 inhibitors, which were invented in 1996.1
This study explores the emerging tension between traditional high-margin procedures and fast-growing, patient-preferred pharmacologic alternatives. As consumer expectations evolve and new therapies emerge, providers must confront a challenging question: What happens if and when surgery is no longer the default standard of care?
For decades, high-margin surgical procedures have sustained the financial viability of hospitals and health systems. Recently, new therapies like Keytruda® have radically changed the treatment of cancer, while more established therapies, like GLP-1s and SGLT2 inhibitors, have suddenly changed the treatment of diabetes and heart failure, respectively. In recent years, GLP-1s have also been utilized to manage obesity. As more pharmaceutical interventions demonstrate efficacy similar to or better than comparable surgical interventions, physician practice patterns will continue to impact the longstanding procedure-based approach to medicine. In turn, many high-margin surgical procedures will likely be replaced with less invasive interventions.
Importantly, the shift to less invasive treatment options has implications far beyond provider revenues. The systemwide transition to safer, less invasive and more accessible care is intrinsically connected to patient safety and health economics. Every medical intervention involves a tradeoff between risks and benefits, and growing awareness of surgical complications and medical errors – both significant contributors to U.S. mortality – has catalyzed interest in pharmacological alternatives. While there is disagreement among academics, medical error has been cited as the third most common cause of death in the U.S.2 Additionally, post-surgical adverse events occur in an estimated 38% of cases and mortality among patients with serious treatable complications after surgery averages 176.5 per 1,000 nationally.3,4,5 Yet the increasing number of pharmacological alternatives to surgical interventions introduces distinct challenges, including high costs, limited long-term outcome data and potential side effects that can range from minimal to life-threatening, some of which are slow to emerge. Additionally, the treatment of numerous comorbid chronic conditions presents issues of polypharmacy. These concerns also raise broader questions about curative intent versus mere symptom management.
Increasing concerns about persistent healthcare inflation further complicates the tension between surgery and medication management. For example, bariatric surgery can cost as much as $33K out-of-pocket without insurance, while GLP-1s may cost $1,300 per month indefinitely.6,7 Though Medicare and Medicaid often provide bariatric surgery coverage under specific criteria, commercial coverage for both surgeries and weight loss medications remains fragmented. At the same time, ongoing drug shortages pose a consistent risk that mirrors existing provider shortages in surgical specialties.8
Driving this change is the cycle of innovation, where complex interventions begin in hospital settings but gradually shift to outpatient and alternative sites due to improvements in technology and payment reform.9 Procedures like coronary stents, chemotherapy and even joint replacements were once exclusively inpatient but are now widely available in lower-cost settings. Historically, hospitals have filled this gap with newer, complex procedures like CAR-T therapy. Will this pattern continue in an era of highly effective drug-based therapies? In an illustrative future scenario, replacing screening colonoscopies with alternative tests like fecal DNA tests or flexible sigmoidoscopy could result in up to a $35.2B annual revenue loss at a 20% replacement rate.10
With all of these considerations, a central question emerges: Are providers prepared for the potential volume declines and corresponding revenue losses associated with replacement therapies? This study examines historic trends in surgical procedures that are poised to be impacted by the proliferation of therapeutic replacements.
National all-payer claims data were used to examine patient volumes for bariatric weight loss surgery, cardiac catheterization, GLP-1 medication use and SGLT2 inhibitor medication use from 2018 to 2023. For bariatric surgery patients, GLP-1 medication prescriptions were tracked within 365 days before or after surgery, and each patient was categorized as taking a GLP-1 medication before their procedure, after their procedure, both before and after their procedure or as never having taken a GLP-1 medication. Notably, several GLP-1 brand medications (e.g., Wegovy®, Zepbound®) were newly approved during the study period. For cardiac catheterization patients, SGLT2 inhibitor (e.g., Jardiance®, Farxiga® and Invokana®) prescriptions were also examined in the 365 days before and after their procedure.
Between 2018 and 2023, the number of patients taking a GLP-1 medication and the number of patients undergoing bariatric weight loss surgery are inversely related. GLP-1 patient volume exhibited consistent and substantial growth throughout the observation period, with an initial 37.9% increase in 2019, ultimately reaching a 744.6% increase by 2023 relative to the 2018 baseline (Figure 1). Conversely, bariatric surgery patient volume experienced consistent decreases throughout the timeframe. The most pronounced reduction in bariatric procedures occurred in 2020 (-17.7%), followed by relative stabilization in 2021 (-3.5%) and 2022 (-0.7%), before declining further in 2023 (-10.1%).
📌 The graph below in interactive. Hover over the dot(s) for more information.
From 2018 to 2023, the use of GLP-1 medications by bariatric patients evolved substantially. The proportion of bariatric surgery patients with GLP-1 prescriptions before surgery increased consistently, rising 4X from 1.5% in 2018 to 6.4% in 2023 (Figure 2). Similarly, patients with GLP-1 prescriptions in the year after surgery increased from 0.4% in 2018 to 2.3% in 2023. The percentage of patients receiving GLP-1 medications both before and after bariatric surgery also showed steady growth, rising from 0.5% in 2018 to 3.3% in 2023, calling into question the extent to which GLP-1s are a replacement versus a supplemental therapy.
📌 The graph below in interactive. Hover over the dot(s) for more information.
The proportion of cardiac catheterization patients with SGLT2 inhibitor prescriptions before the procedure showed modest but steady growth, increasing from 0.5% in 2018 to 1.6% in 2023 (Figure 4). More pronounced increases were observed in patients receiving SGLT2 inhibitors after cardiac catheterization, with percentages growing 8X from 0.8% in 2018 to 6.4% in 2023. Similarly, patients prescribed SGLT2 inhibitors both before and after the procedure increased substantially from 0.9% in 2018 to 4.3% in 2023, once again calling into question the extent to which SGLT2 inhibitors are a replacement versus a supplemental therapy.
Taken together, these findings underscore a fundamental shift in U.S. healthcare delivery: the gradual but likely unavoidable transition from traditional surgical interventions to high-cost, specialty pharmaceutical therapies. Medications such as GLP-1s and SGLT2 inhibitors are no longer simply adjuncts to care; they are increasingly functioning as both substitutes and complements to high-margin surgical procedures. In both procedures examined, surgical volume and corresponding medication showed inverse growth trajectories in recent years. However, within the population of surgical patients, increased post-procedure medication use was observed, which results in higher overall spending per patient. The cost-effectiveness of total spending depends on several factors: how many surgeries are avoided, the long-term cost of medications taken indefinitely and how many patients ultimately undergo both surgical and pharmacological treatments. While this evolution offers patients more options and the potential for less invasive treatment pathways, it introduces meaningful disruption for providers, device manufacturers and health systems.
The persistent increases in the cost of U.S. healthcare will play an increasing role in shaping the future of care delivery, particularly as payers, especially employers, reassess the cost-effectiveness of pharmaceutical interventions relative to traditional medical procedures. Recent analyses comparing GLP-1 medications to bariatric surgery have found surgery to offer better value in certain populations, despite its invasive nature.11,12 At the same time, Medicare’s decision to continue not to cover GLP-1s for weight loss highlights the growing influence of reimbursement policy in determining access and uptake. As specialty drugs continue to be prescribed as substitutes or complements to surgical care, their long-term viability may hinge as much on pricing and coverage decisions as on clinical outcomes.
If current trends persist, hospitals may find themselves over-leveraged on revenue streams that are no longer anchored in surgical volume but instead in revenue derived from specialty drug dispensing – a model that may face future uncertainty as payer policies and pharmaceutical manufacturer strategies evolve. Programs like 340B — originally created as a safeguard for hospitals serving vulnerable populations — are likely masking deeper vulnerabilities, with the revenue generated from dispensing specialty medications offsetting the financial impact of declining demand for certain procedures.13
Providers face growing pressure to reorient their clinical and financial strategies around emerging therapeutic practice guidelines. Life sciences firms must anticipate and prepare for growth in demand, supply chain pressures and increased regulatory scrutiny. Device manufacturers must reevaluate product pipelines in light of declining procedural volume. And payers, especially employers, must revisit total cost-of-care frameworks that balance the one-time cost of surgery against the long-term expense of chronic pharmaceutical management, particularly given fiduciary duties introduced by CMS’s Transparency in Coverage initiative.
Ultimately, the cycle of innovation that once centered around the hospital is now extending beyond its walls. As new entrants capitalize on consumer preferences for convenience, transparency and personalized care, legacy healthcare providers must evolve — or risk being left behind. Strategic adaptability, data-driven planning and a willingness to reimagine — or eliminate – service lines are essential to survival. To what extent will demand for traditional medical services migrate into the life sciences domain? Are providers adequately positioned to manage the financial and operational consequences of volume declines? Are drug manufacturers prepared to scale responsibly and sustainably? And what will the ripple effects be for patients as the health economy rebalances itself around novel paradigms for which long-term evidence is still being generated?