November 30, 2006

The economic analysis of cosmetic medicine.

Here's a big article about how all sorts of doctors are moving into cosmetic medicine -- where the patient forks out the money up front -- and how the plastic surgeons, facial surgeons and dermatologists are miffed about them horning in on their lucrative specialty. Everybody wants to be the one who gets to spend her life giving a zillion little injections into tiny wrinkles.


Bruce Hayden said...

I do emphathise with these docs. The leverage on docs anymore is scary, with them having to pay for offices, a lot of staff, huge malpractice, etc., while having managed care providers slam them from the other side. The primary care providers do well, but not that well anymore, and they see the brunt of the vise that they have been put in.

I esp. emphathise with Ob/Gyn's, whose malpractice costs for delivering babies has gone trough the roof thanks to my profession, and esp. thanks to the John Edwards's of the field.

I am sure that malpractice in these areas is going to go up, thanks to lack of experience. But I would guess that most botched Botox treatments are less costly than paying for the lifetime costs of a botched delivery. First, the Botox ultimately wears off, and secondly, the patients are a lot older, and many will soon be elgible for Medicare.

So, why not have these non-cosmetic docs do the lower risk, non-invasive, beauty procedures?

MD said...

This happens in other areas besides cosmetic medicine. Ask the cardiologists and cardiovascular surgeons. Or the pathologists and radiologists and, and... well, everyone wants in on procedures that pay well. It's completely natural, and also, partly a side effect of the way in which prices are set by the government, insurers, etc. The 'market' is weirdly and irregulary regulated; sometimes you get paid less than what it costs to produce a particular test in the lab (as one example). So, everyone is looking for that growth opportunity. You gotta pay the bills somehow.

Anonymous said...

The sooner we jump on the Netherlands' bandwagon and offer socialized healthcare the sooner those doctors can stop worrying so much about the bottom line. I'm perfectly happy helping foot the bill for it.

Dave said...

Blame, as always, lays at the feet of lawyers, as Bruce Hayden alluded to.

Society ought to do a better job of restraining its lawyers, and lawyers ought to do a better job of understanding the economic costs of acting merely because law or precedent or whatever other contrivance says you can.

I blame the lawprofs.

There is, incidentally, a big argument going on right now among various financial regulators in the United States which argues, in essence, US capital markets have become less competitive over the past couple of years because of burdensome regulations put forth by--you guessed it--lawyers.

Maxine Weiss said...

Bruce: The Malpractice Laws exclude 'elective' surgery.

Cosmetic Surgery is a growth (no pun) industry for deep-pockets lawsuits.

With the exception of...celebrities!

Surpising isn't it? With all the butchered, botched work out there, not a single celebrity has been willing to sue.

But, then again, celebrities don't need the money.

It's the general public who has, increasingly shown a tendency to sue on bad result.

There are thousands of Botox lawsuits winding their way through California Courts, right this minute. I don't know if it's all class-action or not.

Informed consent won't prevent lawsuits from going from going forward, either.

Not when these are elective procedures.

Peace, Maxine

R C Dean said...

The sooner we jump on the Netherlands' bandwagon and offer socialized healthcare the sooner those doctors can stop worrying so much about the bottom line.

The docs will only stop worrying about the bottome line if we go full bore and make them all employees of the state and prohibit them from having any private practice.

Otherwise, they will still have a financial incentive to provide lucrative elective procedures, just as they do now.

I, for one, am opposed to subjecting anyone to indentured servitude, including doctors.

Pogo said...

Despite 43 centuries of repeated attempts, government price control has never ever worked to achieve the desired ends of price stability, reduced costs, or greater availability.

Medicare and Medicaid currently offer reimbursement set below the actual expenses of providing medical care. So, not surprisingly, doctors are getting out of the business of giving away their services for free.

As a result, there are increasing shortages of certain kinds of providers, including neurosurgeons and obstetricians. In trying to force a service to be cheap, the government has instead succeeded in making it scarce.

But Botox can be had, so, if you're not having a baby, or in need of trauma surgery, and seek only a few wrinkles to be erased, you're good.

Balfegor said...

Re: Dave:

Society ought to do a better job of restraining its lawyers,

Or, more specifically, Judges. Lawyers, after all, are obliged (for good or ill) to be "zealous" in their promotion of their clients' interests, whether that means doctors, other patients, hospitals, the body politic, etc. get hurt or not (within reason, of course). Judges are the ones who are supposed to be judicious about the whole thing.

That said, it does occur to me that lawyers are not the only problem here.

One of the great problems people (including me) point to in socialised medical system is the long waiting lines. Under our system, most of those ridiculously long lines are eliminated, but they're eliminated through market mechanisms, whereby the people who can't afford to pay simply don't bother to wait in line. And sometimes don't get the medical care at all. Which, as far as certain classes of medical care goes, is a non-ideal result -- it just transforms the idiotic lines issue into a distributional issue. Doctors do a lot for the indigent, all the same, but that's because they -- the doctors -- are there.

Popular and lucrative practices like cosmetic surgery simply distort the supply even more, because doctors go where the money is, and where the money is is not in providing care to people in desparate need of medical attention, but in catering to the whims of the wealthy. Which means that some long lines may not exist because there are simply no doctors to be seen.

A lot of this is, of course, remedied by the market. Apparently in places where doctors are needed and unavailable, like the more rural bits of the country, starting salaries for physicians can be in the mid six-figures -- someone mentioned this to me recently. It's a bit staggering, considering I come out of a medical family, and our perception is that doctors' income has been decreasing in real terms from my grandfather's day down to my father's. But perhaps it is correct -- we're out by the country's metropolitan conurbations, after all. Anyhow, that's a lot of money, even if it isn't the millions a cosmetic surgeon might be making. So market mechanisms correct for this distributional problem in some respects. But they can only correct to a certain degree -- according to poorer peoples' ability to pay for a scarce resource the supply of which is controlled by state medical boards and medical schools.

Responding to Pogo's point, it is true that having the government drive down the costs by fiat just drives people out of the industry (unless you make like the late Roman Empire, and convert them into serfs). But I think that the problem is not just that the costs are driven low, possibly below the cost of service itself (expensive machinery, facilities, maintenance, techs, nurses, etc.); it's also that the opportunity cost of providing certain sorts of medical care, in terms of abandoning the chance to practice in more lucrative areas, is going up. You see this in law too, actually.

I suppose if I were a libertarian, this wouldn't particularly bother me. But I'm not -- I'm a conservative. And it does. Not so much now, where the problem is really quite mild (there's plenty of doctors to go round, and while there's a big salary differential, it's not really that bad). But looking towards the future, I think this may be more of a problem.

The solution usually proposed -- socialised medicine, whether Hillarycare or something more moderate -- looks like a flat out disaster to me. American government and government-created corporations have not, as far as I can see, proven particularly competent at anything, whether it's state level stuff like school districts or the DMV, or federal stuff like the Post Office, Amtrak, or Fannie Mae. Or rather, they do decently, but are bloated with corruption and incompetence. So I don't think injecting even more government into the healthcare market is a solution likely to end in anything but catastrophe for millions of patients.

But I still think there is a problem here.

Pogo said...

Well said, Balfegor.

I also approach this from the conservative rather than libertarian perspective, so these trends worry me quite a bit.

Bruce Hayden said...

Hey, you learn something every day, that malpractice laws don't cover elective surgery, but not quite sure what that means as far as some of the other comments made here.

Does that mean that a doctor can't commit malpractice by screwing up this sort of elective surgery?

The reason I ask is that there do seem to be some negligence claims for botched procedures, and malpractice is a form of negligence.

Are you suggesting that you can't sue for a botched elective procedure under a theory of negligence? Or just not as malpractice?

As you can tell, I have never worked anywhere close to this area, and so am quite naive here.

Bruce Hayden said...


Rereading your post, it seems that you seem to be saying that the exposure for the docs may be more, not less, because the procedures are elective - in other words, since malpractice lawsuits are not available, all the safeguards we have put into the law to protect the docs are not there, and thus, they are even more vulnerable to being sued for (possibly) screwing up.

Or am I still missing your point.

Bruce Hayden said...

With the comment that ob's are becoming scarce, esp. in some areas, this whole trend is a bit scarier, since several of the docs profiled were ob/gyns. Apparently, they already had a nice list of female patients to which they could sell these new services. Kinda like getting wrinkles erased at the same time you are having a pelvic exam.

Actually though, the ob/gyns seemed to be moving away from delivering babies into this sort of cosmetic procedures. And I don't think that that is good - I think that delivering babies has more social utility than does freezing wrinkles.

Rusty said...

Bruce: The Malpractice Laws exclude 'elective' surgery.


Not in any state I am familiar with. The vast majority of surgeries are technically "elective".

Rusty said...

There are a great many financial pressures on physicians from different directions.

This is no reason for physicians to be working far out of their specialty training.

Always look for a physician who is eitehr board certifed or who is board-eligible and working in a group of board certified phsyicians.

And only use a physician for procedures in their area of residency and certification.

Pogo said...

Re: "And only use a physician for procedures in their area of residency and certification."

That certainly applies to Oncology and Neurosurgery, but less so to other areas.

There is really no current residency and certification for giving Botox. (But just you wait!)An Ob-Gyn can learn the principles of the procedure rather quickly, and they do far more dangerous stuff in pelvic surgery, so I don't see the harm here.

Instead, you are describing how medical care is still operating under the guild system, and that this keeps costs high. It's not the major cause for expensive health care, but it contributes. Certainly, training needs to be high, but Physician Assistants and Nurse Practitioners actually do pretty good work, I think, even though quality of care was cited by MDs obstructing their entry.

It's a way of having a gov't.-sanctioned monopoly. If doctors had their way, giving tattoos would be considered a medical procedure.

knoxgirl said...

The sooner we jump on the Netherlands' bandwagon and offer socialized healthcare the sooner those doctors can stop worrying so much about the bottom line.

You are not allowed to sue the government in Canada if you are a victim of medical malpractice. This has all sorts of awful, unintended consequences. Imagine a government bureaucracy with absolutely no accountability... with your life in their hands. Do not wish it.

Do some research on universal healthcare. It is not a solution to the problems we have here.

Bruce Hayden said...

re: Malpractice laws - I was not talking from experience, but rather trying to interpret what a previous poster said.

I thought that this whole thing was somewhat speculative until my father told me yesterday about getting a flyer from an eye surgeon that we know selling this sort of cosmetic medicine.

My take is that this opthemologist had made a lot of money on laser eye surgery, but that had become a commodity business. This was a way to boost the doc's income back up a bit.

But we were laughing about how long it would take an ob/gyn we know to join in, as he had a reputation of maximizing income through, for example, weekly ultrasounds (according to his patients who were paying for this, so that they could see their babies).