Economy and Plastic Surgery Business


Beth Longware Duff, Medical Editor

Beth Longware Duff is an experienced writer and reporter whose work on a wide variety of topics has been published in numerous newspapers and magazines. Her health and medical writing credits include nationally distributed videos for the March of Dimes Birth Defects Foundation, and she is the recipient of numerous awards including an American Cancer Society Media Award and a New England Press Association Award for Health Reporting. She holds a degree in Communications from Ithaca College.

June 09 2008

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Are We in a Plastic Surgery Recession?

OK, so you've already given up your Starbucks addiction, you're driving your car less to stretch your gas dollars, and holding off on major purchases until you sort out this recession thing. What's next – give up your Botox┬« Cosmetic fix? Postpone your tummy tuck?

During an economic downturn, consumers tend to reprioritize how they spend their money and often defer nonessential purchases. And as much as Americans love their cosmetic surgery (they spent $13 billion on it in 2007 alone), it appears that many are finding that their discretionary income won't stretch far enough to continue their indulgence during these recessionary times.

Plastic surgeons nationwide report that business is off by as much as 60%, and that their patient conversion rate from consultation to surgery is on the decline, too. Even their "regulars" who come in for injectables are booking visits at longer intervals – every 6 months instead of every 3, for example. In particularly hard-hit areas of the country, some plastic surgery practices have laid off staff or closed.

In early 2008, the Reuters news agency reported that numbers for some cosmetic procedures, especially higher priced surgeries like breast augmentation, were slipping. However, in mid-May Mentor, the California-based company that controls roughly half of the breast implant market in the United States, announced fourth quarter net sales that were 24% higher than those for the same period in 2007. The increase was attributed primarily to the demand for the company's silicone breast implants, which returned to the market in late 2006 after being banned by the U.S. Food and Drug Administration in 1992.

Peter Bye, who analyzes the plastic surgery industry for Jefferies & Company, still sees some soft spots in the market. "Surgeon's appointment calendars don't appear to be booked out as far as they were," he notes. "Breast implants appear to be down a little bit in the first quarter of 2008, but we're talking only 2 or 3 percent. We certainly see a deceleration, but not a rollover."

Injectable anti-wrinkle fillers and Botox, which typically cost less than $1,000 per session and are popular with the 35 to 64 age group, have been less affected by the recession so far. "You've got natural patient demand, or push, and broader pull from the other side because more physicians are in this business," Bye explains, adding, "The search for youth is eternal, so I expect prices will come down as the competition increases."

Another stock analyst, Morningstar's Jeff Viksjo, notes that when consumers need to cut back on their spending, the first thing they give up are goods or services with an easy "trade-down option". For instance, they'll forgo a new car for a less expensive used model. But there is no substitute for Botox injections or breast augmentation, he points out.

"Even if the economy worsens, patients who want fewer wrinkles or larger breasts have no choice but to pay up for the procedure," he writes. However, while loyal Botox customers intent on maintaining their look will have to shell out on a regular basis, women who want breast implants are likely to postpone the procedure until they're more confident of their financial situation, Viksjo predicts. Or, if they're not willing to wait, they'll opt to finance their procedure, counters Bye.
"I think more doctors are using patient financing plans, which makes it more affordable for people who look at it as a monthly payment over time," Bye concludes. "That helps soften the blow."