The financial impact of the COVID-19 pandemic on sleeve gastrectomy at a major academic institution.

ABSTRACT

INTRODUCTION: The COVID-19- pandemic significantly impacted metabolic and bariatric surgery (MBS) practices due to large-scale surgery cancellations along with staff and supply shortages. We analyzed sleeve gastrectomy (SG) hospital-level financial metrics before and after the COVID-19 pandemic. METHODS: Hospital cost-accounting software (MicroStrategy, Tysons, VA) was reviewed for revenues, costs, and profits per SG at an academic hospital (2017-2022). Actual figures were obtained, not insurance charge estimates or hospital projections. Fixed costs were obtained through surgery-specific allocation of inpatient hospital and operating-room costs. Direct variable costs were analyzed with sub-components including (1) labor and benefits, (2) implants, (3) drug costs, and 4) medical/surgical supplies. The pre-COVID-19 period (10/2017-2/2020) and post-COVID-19 period (5/2020-9/2022) financial metrics were compared with student's t-test. Data from 3/2020 to 4/2020 were excluded due to COVID-19-related changes. RESULTS: A total of 739 SG patients were included. Average length of stay (LOS), Center for Medicaid and Medicare Case Mix Index (CMI), and percentage of patients with commercial insurance were similar pre vs. post-COVID-19 (p > 0.05). There were more SG performed per quarter pre-COVID-19 than post-COVID-19 (36 vs. 22; p = 0.0056). Pre-COVID-19 and post-COVID-19 financial metrics per SG differed significantly for, respectively, revenues ($19,134 vs. $20,983) total variable cost ($9457 vs. $11,235), total fixed cost ($2036 vs. $4018), total profit ($7571 vs. $5442), and labor and benefits cost ($2535 vs. $3734; p < 0.05). CONCLUSIONS: The post-COVID-19 period was characterized by significantly increased SG fixed cost (i.e., building maintenance, equipment, overhead) and labor costs (increased contract labor), resulting in precipitous profit decline that crosses the break-even in calendar year quarter (CQ) 3, 2022. Potential solutions include minimizing contract labor cost and decreasing LOS.