Any cosmetic surgeon watching the oscillations of the stock market has probably wondered how those market trends might affect one's real-life patient base. Are market indices leading or lagging indicators of aesthetic surgery demand? Researchers at Cleveland Clinic actually decided to determine what correlations, if any, there were between the three major U.S. economic market indices and plastic surgery volume. Chad Gordon, D.O., fellow, Department of Plastic Surgery, at Cleveland Clinic, Cleveland, teamed with James E. Zins, M.D., chairman, Department of Plastic Surgery, Randall J. Yetman, M.D., program director, Plastic Surgery, and Francis Papay, M.D., chair, Dermatology and Plastic Surgery Institute, to conduct a retrospective study of nearly 7,400 patients who underwent plastic surgery at Cleveland Clinic's main campus in Cleveland in the past 16 years.
Dr. Gordon had seen, "many conflicting predictions as to where aesthetic plastic surgery is heading, say, into 2009-2010." He decided to analyze the Clinic's historical data to explore a possible correlation between their volume of aesthetic surgical procedures relative to recent economic trends as expressed in changes of stock market indices. If he discovered a correlation, perhaps it could be used to determine how economic trends might be predictive of the future number of patients electing to undergo aesthetic procedures.
Dr. Gordon used data from January 1992 (when the Department of Plastic Surgery at the Clinic began digital record-keeping) through October 2008. The objective was to identify either a positive or negative correlation between the number of aesthetic plastic surgeries and trends of the three major U.S. market indices: the Dow Jones Industrial Average, the S&P 500 and NASDAQ. For comparison, Dr. Gordon says, "We wanted one group for whom the cost of the procedure was entirely out of their personal pockets and one group whose costs were covered by some kind of insurance." Although final data analysis was pending at press time, Dr. Gordon says results show clear connections between index trends and volume of procedures in both groups.For aesthetic surgeries, he notes, "there's been a strong positive statistical correlation between facelifts, breast augmentation and liposuction with all three indices." Notably, forehead lifts were only found to correlate statistically with NASDAQ. In the non-aesthetic group, both breast reduction and reconstruction expressed a statistical correlation with the S&P 500 and NASDAQ, but not with the Dow Jones. Interestingly, carpal tunnel release, Dr. Gordon says, "had a negative correlation to all three indices, meaning when market trends go up, volume goes down."
What does this mean in terms of cause and effect? At least in this study, Dr. Gordon says, "There's a trend toward significance, with a one fiscal quarter delay—a three-month lag—when you look at market shifts vs. [procedure] volume." Based on this, how might surgeons view the stock market as predictive of patients choosing to undergo aesthetic plastic surgery? Dr. Papay says if aesthetic surgeries do follow market trends at a lag of a fiscal quarter or more, physicians may choose to manage their practices accordingly. Both acknowledge that their study results, while significant, are based on a relatively narrow focus in one institution. "We're comparing macro-economic indices with micro-economic spending decisions," Dr. Papay says. However, Dr. Gordon adds, "the data could still hold prognostic value for aesthetic surgeons in terms of budgetary planning and personnel allotment," and plans are underway to substantiate the results using national statistics from multiple centers.
FORWARD LOOK "Part of our advice," Dr. Gordon concludes, "is to remember: over the last 100 years, the Dow has consistently gone up. So, although this might be a bad time, the future should be promising." The U.S. economy, together with the market, will recover, "and, in fact, will probably come back stronger than before this drop."