How are the prices of cosmetic-surgery procedures determined? It’s long been assumed that, like most other commodities and services, those prices depend on the laws of basic economics, including the supply-and-demand model. The fact that procedure prices vary so widely, however, indicates that other economic factors are at work.
Researchers at Loma Linda (Calif.) University decided to find out the extent to which supply-and-demand affects the pricing of cosmetic-surgery procedures — and to identify exactly which economic factors drive pricing most if supply-and-demand were found to be a secondary driver.
The research team randomly selected 10 plastic surgery practices in each of 15 U.S. cities with various population sizes. For each city, the team compared the average prices of breast augmentation, mastopexy, abdominoplasty, blepharoplasty and rhytidectomy with economic and demographic statistics.
The researchers found that the average price of cosmetic-surgery procedures correlated strongly with population size, cost-of-living index, and real-estate ownership and rental costs. Household income and per-capita income were less significant factors. Virtually no correlation was found between pricing and the number of plastic surgeons in a given area or the average age of residents.
The bottom line of this study is that since no correlation was found between procedure costs and number of practitioners in a given area, pricing is determined much less by supply-and-demand than by local economic factors.
“Given the increasing focus on the economics of health care, we wanted to examine the supply-side part of the economics around aesthetic surgery,” study author Subhas Gupta, of the department of plastic surgery at Loma Linda (Calif.) University, tells Cosmetic Surgery Times. “It is fascinating that cosmetic surgery procedures are not subject to classical Keynesian supply-demand economics.”
Dr. Gupta said the study was prompted by questions he often gets from plastic surgery residents who are nearing the end of their training and trying to decide where to set up a practice.
“While it is commonly accepted and advised to establish practice where one will be happy,” he says, “it was important to learn that geography within the U.S. should not be a limiting factor to determining where a new surgeon could set up a practice and survive.”