There’s a new wrinkle for cosmetic surgery
By Stephen W. Earnhart, MS
President and Chief Executive Officer
Earnhart and Associates, Dallas
With shrinking reimbursements and compressed profit margins hitting just about everyone in the industry, an old standby is starting to resurface as an attractive profit-generating tool. When I first got into this industry almost 20 years ago, we all courted the plastic surgeons. We would use their face lifts and other exotic procedures as "fillers" until we were able to expand our surgical schedule with higher reimbursable procedures. At the time, we would never dream of having any of these procedures ourselves. Now? Well . . .
We would hassle and haggle with the surgeon over the facility fee and amount of sutures used. They naturally would try to beat us up for the absolutely lowest, "Can I have it for free?" price we would give them. We would leave our meetings shaking our heads and wondering why we would give away our time, supplies, and staff for such a low price. We convinced ourselves that as soon as we got that orthopedic group signed up, we’d cut back on the plastic procedures!
Well, time marches on, and many of those cosmetic surgeons have established their own surgery centers. Most have flourished in the managed care environment, rightfully thumbing their noses at the laughable reimbursement rates being quoted for the orthopedic cases.
However, let’s talk facts here. According to National Screening Service in Los Angles, the aesthetic surgery market is a $10 billion annual business. The majority of the services (70%) are used by women, and 64% of the market is between 35 and 65 years of age. The overall potential market is 100 million women!
As this managed care madness continues its lemmings’ trip over the cliffs, the idea of cash upfront and eager, self-paying customers isn’t a bad one.
Other stats from the same source include a breakout of dollars spent last year on procedure groups. It seems that the face got the most attention, with more than $2,680,394,900 spent on changing or altering the effects of age. After that came liposuction at a cost of $1,719,909,100; chemical peels at $1,241,129,400; breast procedures at $422,965,000; and "others" at $548,071,800.
Hefty amount of money. With managed care contracts out there offering 45% of Medicare, this stuff is looking better all the time. I am encouraging centers to re-examine the cosmetic surgery market. Talk with your plastic surgeon about getting more of his or her business. Look again at your cost on these procedures and see if it makes sense to expand this service line. If you don’t have a plastic surgeon at your center, seek one out and see what you can arrange. I’ve spoken with a number of them over the last several months, and they are still very eager to perform procedures at an established facility instead of in their own offices.
If you don’t have a plastic surgeon available or are interested in marketing your center or current surgeon in high fashion magazines, on the radio, or in other media, a service is just becoming available to do the work for you. (Isn’t there always?!) Called "New-Face," the company can be reached in Los Angeles at (800) 639-3223.
We discussed the business of "aesthetic surgery" at the Same-Day Surgery Conference in Atlanta in June. There was a high degree of interest in and discussion of the merits of this field as a serious payer. The administrators I spoke with agree: It is time to enhance the business with a new line. While we all have rapidly growing "self-pay" accounts receivables, the nice thing about this line of surgery is that plastic surgery patients are eager to pay the facility fee upfront. One word of caution from those of us who are currently doing these cases: Get the entire amount upfront. Don’t finance the facility fee. Historically, you have to work hard to collect the balance after surgery. The surgeon collects his upfront, and so should you.
(Editor’s note: Earnhart can be contacted at Earnhart and Associates, 5905 Tree Shadow Place, Suite 1200, Dallas, TX 75252. E-mail: surgery@ onramp.net. World Wide Web: http://rampages. onramp.net/~surgery.)
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