Weight-loss drugs hit health care real estate
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Weight-loss drugs are so ubiquitous that some health systems are scaling back bariatric surgery centers and recalculating other investments as they grapple with the drugs' potential for changing the prevalence of chronic diseases.
Why it matters: The class of drugs known as GLP-1s could lead health systems to pivot away from massive hospital towers with cardiology clinics, dialysis beds and joint replacement centers to facilities focused more on lifestyle and metabolic health.
Driving the news: A 30% drop in bariatric surgeries in one year — attributed to GLP-1s such as Novo Nordisk's Ozempic and Wegovy — prompted officials at an Oklahoma health system to shutter their bariatric surgery center last month, the Oklahoman reported.
- Another health system in the Philadelphia region canceled its plans for a bariatric surgery expansion in recent months, Grant Geiger, CEO and founder of industrial design firm EIR Healthcare, told Axios.
- "For a lot of these health systems, they do plan kind of far out and they're having to rethink a lot of their capital expenditures in terms of what they're going to build," Geiger said. "I think you'll see a lot of things that were on the drawing board probably get revisited."
The big picture: Weight-loss drugs are part of a number of seismic shifts already affecting health system footprints, including changing reimbursements, new care delivery models and the use of technology to enable remote patient care nudged along by the pandemic.
- The introduction of a class of medications that could upend diabetes, obesity, heart disease and potentially conditions such as addiction or Alzheimer's could further change their calculations for future health care utilization.
- "It stands to reason that if one drug can change the trajectory of health outcomes, it can change how hospital care is delivered over the long term," Lisa Goldstein, managing director at Kaufman Hall, wrote last month, pointing to potential permanent shifts in patient volume.
Roughly 1 in 8 U.S. adults, or about 15 million people, say they've taken a GLP-1, according to a KFF poll. That number could grow significantly if more insurance carriers decide to cover the pricey drugs for weight loss.
- J.P. Morgan projects as many as 30 million Americans could be taking the drugs by 2030.
Between the lines: Among the shifts are plenty of physicians' offices that are simply seeing the opportunities in GLP-1s and following the money, creating lines of business for helping patients manage weight loss.
- "This feeds into the overarching trend of consumerism in health care," Geiger said. "This is where I think brands and companies like Apple and others probably are pretty well positioned because they are building digital tools to help people understand their body."
Yes, but: While GLP-1s have been shown to be highly effective, there may not be enough evidence to alter long-term capital planning at this point, UVA Health CEO Craig Kent told Axios.
- Statins were projected to have a massive impact on cardiovascular care needs when they first came out. The drugs did have a major impact, he said: Patients still need those services — they were just older when they begin needing them.
- "There's no question [GLP-1s will] have an effect on the number of joints we do. They have to have an effect on the number of heart bypasses or amputations or whatever that we do over time," Kent said.
- "But it's really difficult to plan for what's going to happen 10 years from now or 15 years from now," he said. "What you have to ask yourself is, 'What if we're wrong?'"
