Researchers Find Demand for Cosmetic Procedures, Dermatologic Surgery Rising Rapidly (Aesthetic Medicine: A Recession Proof Revenue Generator?)

Physicians looking for a way to boost their revenue stream and expand their clinical expertise are turning their attention to aesthetic medicine, a field whose services span minimally invasive cosmetic procedures from peels, injections and laser services, to more invasive procedures such as plastic surgery. It’s a niche some experts believe is fairly recession-proof.

While plastic surgery has demonstrated significant sensitivity to weaknesses in the U.S. economy, according to a national procedural statistics report released this spring by the American Society of Plastic Surgeons (ASPS), minimally invasive procedures (up by 5 percent since 2007) are still popular, which confirms the so-called “Lipstick Effect” that is observed during economic downtimes; the term was coined by Leonard Lauder, chairman of Estee Lauder, who witnessed a surge in lipstick sales following the events of 9/11. Conventional wisdom tells us that during times of economic and social instability, consumers substitute small, affordable luxuries for their bigger, more expensive splurges. This concept translates to aesthetic medicine and surgical services in that patients are now foregoing or postponing pricier and more invasive procedures and opting for cheaper, less risky and more temporary fixes, such as injections and dermal fillers instead of face lifts.

This is substantiated by statistics from the American Society for Aesthetic Plastic Surgery (ASAPS), which reports that non-surgical procedures showing the most growth were laser skin resurfacing (up 12 percent), Calcium hydroxylapatite (Radwiance) injections (up 3 percent) and chemical peels (up 2.9 percent).

Cindy Graf, principal of Cindy Graf Consulting LLC, an expert in the field of aesthetic medicine practice management, and a faculty member of the IAPAM, confirms this trend. “People will always want to improve their looks to feel better about themselves” Graf says. “Another important factor that plays into this trend is gaining or keeping employment in this economic downturn. When people who are in their 40s or 50s lose their jobs, they tend to do non-surgical procedures like Botox injections or other rejuvenation procedures to make themselves more viable candidates as they try to compete in the job market.”
Physicians can make aesthetic medicine procedures attractive to patients by promoting them as rejuvenation opportunities as well as bundling procedures to improve a patient’s perception of value-added services. Equally important, these minimally-invasive procedures can offer physicians an additional cash profit center as an ancillary service to their existing ambulatory surgeries.

Graf says physicians who want to get into aesthetic medicine should proceed with optimistic caution, first ensuring that they have two very important elements in place. The first is a firm grasp on the realities of day-to-day operations. “I think that aesthetic medicine is recession-proof, but in these challenging economic times, physicians must control their overhead costs,” Graf says. “Instead of building a freestanding medical spa, I recommend that physicians add aesthetic medicine services to their existing practices first to build a clientele. One of the reasons why the medical spa industry has faltered is that a physician will spend hundreds of thousands of dollars building these places, and because of the equipment and staffing required, the high overhead becomes too much to keep up with when combined with high marketing costs. But if you go into it with a modest overhead, just adding aesthetic medicine services to your existing practice, or doing a small build-out, and then keeping costs under control, it can be a wonderful opportunity, even in this economy.”

The second key to success is having what Graf calls a “natural bridge” from an existing practice to an aesthetic medicine service line. “The physicians who are best able to cross-sell into aesthetics are those who can use this natural bridge – a common patient demographic or an existing surgical service line most complimentary to aesthetic procedures,” she explains. “For example, an OB-GYN practice has a natural bridge because the specialty already has the right patient demographic to begin with.”
Graf continues, “This field will continue to be lucrative. That’s why we continue to see interest from everyone, including core doctors such as dermatologists, as well as from physicians in other specialties because their reimbursements have been so severely cut by Medicare and insurance companies. In many practices, the costs are continuing to rise but year after year, the reimbursements are continuing to be cut, and it puts physicians in very stressful positions. Because of the nature of aesthetic medicine procedures, it’s much more pleasant and can be almost considered as a break from the stress of general medicine and surgery. So many physicians, like OB-GYNs, are getting out of their specialties because of the skyrocketing costs of malpractice insurance premiums, and they looking for a revenue stream to make up for the practices they are giving up. Aesthetic medicine can work well for emergency room physicians who work four days on and have three days off – they have long stretches of time they can devote to an aesthetic medicine practice. At my seminars I see all kinds of physicians practicing in everything from dermatology to neurology, to orthopedics; some of their nurses come with them, and I also see aestheticians who try to align themselves with a physician to launch a practice.”

With so many practitioners wanting to enter the field, could oversaturation take place? Graf doesn’t think so. “While there is some oversaturation in a few markets, I think the market has not even scratched the surface of it potential yet,” Graf says. “The numbers, even in a down economy, are continuing to grow every year and we are nowhere near saturation, so I think there is tremendous opportunity out there for the wise physician who does his or her homework and who tries to find the right bridge to aesthetic medicine. I encourage physicians to do what they enjoy, tap into the skill mix that they love, offer the kinds of aesthetic services their patients might be interested in, and then specialize in some of those procedures. Physicians shouldn’t try to do absolutely everything to compete sometimes just doing one or two procedures and doing them really well can become a great side practice.”

Graf offers what she believes are the important keys to building a successful cosmetic medicine business:

» Understand the aging face. Understanding facial structure, skin tone, skin types as well as putting together a treatment plan to address the concerns of the aging face that fits into the client’s lifestyle and budget is key.

» Hire a knowledgeable and motivated staff. Every staff member is crucial to the growth and repeat growth of your cosmetic medical business, so they should be able to discuss cosmetic procedures with clients.

» Hire a competent business manager. It should be someone in the practice who has the responsibility for setting and monitoring financial goals, marketing and hiring and training staff for the practice owner.

» Keep up with technology. Rapidly evolving technology in this field requires practitioners to stay current in their knowledge base.

» Provide ongoing training. Stay on top of the latest techniques and advancements in the industry.

» Create an effective marketing plan. Physicians must be able to let existing patients know that they now offer cosmetic procedures? Use point-of-purchase posters, brochures, samples and prescriptions to turn current patients into cosmetic clients. There are many inexpensive grassroots marketing ideas that can be initiated to cross sell cosmetic services within your social and professional areas of influence.

» Stage a seminar. Invite the public and your patients to your office for an informal presentation that includes before-and-after photos of the procedures that you are offering, demonstrate a simple procedure such as a Botox injection, and offer a specially valued package of services to those in attendance.

» Establish a physician-directed skin care program. Developing or carrying a product line is another potential profit center; product sales should be included in every consultation and treatment for higher revenue returns.

» Master the consultation process. Develop a conversational consultation style that focuses on listening to clients’ concerns, putting together a treatment plan that solves her/his concerns and then answering questions that arise. Direct the client to buy by uncovering objections of price, procedure and pain. When the package matches the list of concerns and the three P’s are answered, there is no reason not to buy.

Graf advises, “If your cosmetic medical practice is not producing the revenues that you projected in your business plan, have a hard look at the manner in which you are doing business and see if one or more of these integral keys is missing and by adding these tools, you can bring your business into the profit producing business that you desire.”
Researchers from Boston University School of Medicine (BUSM) and the Laser and Skin Cancer Center of Indiana, found that there has been a dramatic increase in the number of procedures performed and patient demand for dermatologic healthcare since 2000. The findings, which were recently reported in Dermatologic Surgery, parallels the growth in the age of individuals between the ages of 40 to 55, who make up the Baby Boomer generation.

Using data from the 2001 to 2007 American Society for Dermatologic Surgery (ASDS) member survey, the researchers found that dermatologic surgeons performed an estimated 3.4 million cosmetic and non-cosmetic surgical procedures; in 2007, it was estimated that a total of 7.6 million procedures were performed (120 percent rate of growth between 2001 and 2007). The procedures with the greatest increase during this time period were soft tissue augmentation (405 percent increase), botulinum toxin injections (324 percent increase), and non-ablative skin rejuvenation (laser, light, and radiofrequency sources) (330 percent increase). More modest increases were noted in skin cancer procedures (85 percent increase) and ablative resurfacing procedures (66 percent increase).

According to the researchers, there are two important trends fueling the growth in the number of surgical procedures performed by dermatologic surgeons. “They include the overall advancements in procedural facets of dermatology as a specialty during the last decade combined with the increased societal emphasis on skin cancer prevention and early diagnosis, as well as a desire to prevent and reverse the skin signs of aging,” says lead author Emily Tierney, MD, an assistant professor of dermatology at BUSM.

Tierney further explains, “Dermatologists have been integral to the rapid evolution of photomedicine, with the advances in laser and light devices to treat a diversity of skin conditions. These include actinic keratoses to nonmelanoma skin cancer, pigmentary and vascular disorders, hair and tattoo removal, wrinkles and other signs of photoaging. In addition, the popularity and growth in minimally invasive cosmetic procedures, including botulinum toxin injections, dermal fillers, and nonablative skin rejuvenation techniques (chemical peels and laser, light, and radiofrequency devices) have increased exponentially.”

The researchers anticipate that the role for the dermatologist in a diversity of surgical pursuits, ranging from skin cancer treatment, minimally invasive cosmetic, and laser procedures to complex cosmetic and reconstructive procedures, will continue to grow and expand and contribute to the quality and diversity of procedures performed.

Kelly M. Pyrek
11/11/2009