By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    stress management for healthcare workers
    3 Tips For Healthcare Professionals: How To Stay Beautiful, Healthy, and Happy
    November 2, 2021
    importance of relaxing on the weekend for your health
    Importance of Relaxing During the Weekend for Optimal Health
    March 25, 2022
    LASIK Eye Surgery
    What Is LASIK Eye Surgery?
    May 16, 2022
    Latest News
    6 Easy Healthcare Ways to Sit Less and Move More Every Day
    September 10, 2025
    7 Most Common Healthcare Accreditation Programs: Which Should You Use?
    August 20, 2025
    Hospital Pest Control and the Fight Against Superbugs
    August 20, 2025
    Hygiene Beyond The Clinic: Attention To Overlooked Non-Clinical Spaces
    August 13, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    Heroism in Harm’s Way
    February 21, 2015
    5 Things Every Trainee GP Should Know
    August 27, 2019
    Top 5 Facts About CPPA Accreditation
    April 9, 2015
    Latest News
    Healthcare at a Crossroads: Why Leadership Matters More Than Ever
    September 9, 2025
    How Social Security Disability Shapes Access to Care and Everyday Health
    August 22, 2025
    How a DUI Lawyer Can Help When Your Future Health Feels Uncertain
    August 22, 2025
    How One Fall Can Lead to a Long Road of Medical Complications
    August 22, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Why Can’t The Market for Medical Care Work Like Cosmetic Surgery?
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Business > Finance > Why Can’t The Market for Medical Care Work Like Cosmetic Surgery?
BusinessFinanceHealth Reform

Why Can’t The Market for Medical Care Work Like Cosmetic Surgery?

JohnCGoodman
JohnCGoodman
Share
7 Min Read
Image
SHARE

Image

Image

Americans see their doctors more than 1 billion times a year ― and spend nearly $300 billion on physician services ― but they rarely discuss the price of a given service with their physicians in advance of receiving treatment. It gets worse. Although only about 10 percent of health care expenditures are spent on physicians’ services, doctors are the gate keepers to virtually all care that is provided to patients ― including MRI scans, lab tests, hospital admissions and surgeries. Yet doctors rarely provide a list of prices for goods and services they provide or discuss the prices of the procedures they order. Patients don’t bother to shop for medical care, and doctors don’t advertise their prices because nearly 90 percent of patients’ tabs are paid with other people’s money.

However, when patients pay their own medical bills, they act like normal consumers ― comparing prices and looking for value. And when patients act like prudent consumers, doctors who want their patronage must respond by competing on prices, convenience and other amenities.

More Read

Effective Healthcare Campaigns Start With These 4 Elements
How to Advocate For Yourself In and Out of the Hospital
Why Doctors Need to Hear Patient Gripes and Complaints
Why iPad EMRs are Better for Doctor Patient Interaction
Web-Based Patient Engagement Lowers Anxiety for First-Time Colonoscopy Patients

 

Consider cosmetic surgery, one of the few areas of medicine where consumers pay out of pocket. The inflation-adjusted price of cosmetic medicine actually fell over the past two decades — despite a huge increase in demand and considerable innovation [See Figure]. Since 1992:

  • The price of medical care has increased an average of 118 percent.
  • The price of physician services rose by 92 percent.
  • The inflation rate, for all goods and services, as measured increased by 64 percent.
  • Yet cosmetic surgery prices only rose only about 30 percent.

HA1-06-17-2013

The price of cosmetic medicine was held in check by a variety of competitive forces: Doctors who perform cosmetic services quote package prices, and generally adjust their fees to stay competitive. The industry is constantly developing new products and services that expand the market and compete with older services. As more cash-paying patients demand procedures, doctors rush to provide them. There are few barriers to entry in cosmetic surgery. Any licensed physician can enter the field.

Entrepreneurial physicians are also on the lookout for new ways to market their services. Consider the ubiquitous deal-of-the-day emails, where Groupon and LivingSocial offer goods and services to subscribers at greatly reduced prices. These daily deal promoters offer numerous medical-related services, including Botox, corrective eye surgery, dental teeth cleaning, teeth whitening, laser hair removal, laser facial resurfacing, cosmetic fillers, spider vein and brown spot removal at highly discounted prices. This defies the conventional wisdom that a doctor would never advertise a bundled cash price — much less extend the offer to hundreds of thousands of random people sight-unseen. Yet the offers land in millions of email inboxes every day, and competition is fierce.

Consider botulism toxin injections, such as Botox and Dysport. According to surveys by the American Society of Plastic Surgeons, the average fee to administer botulism toxin was $369 in 2012, compared to $365 a dozen years earlier in 2000. Groupon and LivingSocial have occasionally offered Botox deals for as little as $99, with $149 quite common.

Another competitive service is laser skin resurfacing, which cost about $2,556 in 1996, according to the American Society of Plastic Surgeons. Physicians began offering less-invasive, fractional laser resurfacing that reduced recovery time. The cost of fractional laser skin resurfacing fell to $1,113 by 2012. Yet, couponing websites have offered numerous laser resurfacing deals for only $299. One Dallas-area Med Spa even offers this service, available with a one-year membership, for as little as $149 — a mere fraction of the cost elsewhere.

Wherever there is price competition, quality competition tends to follow. Take corrective eye surgery. From 1999 (when eye doctors began performing Lasik in volume)HA2-06-17-2013 through 2011, the price of conventional Lasik fell about one-quarter due to intense competition. [See Figure]  Eye surgeons who wanted to differentiate themselves from other surgeons, and charge more, began to provide more advanced Custom Wavefront Lasik technology using IntraLase (a laser-created flap). By 2011, the average price per eye for doctors performing Custom Lasik was about what conventional Lasik had been more than a decade earlier; but the quality is far better. Occasionally an eye surgeon will offer a daily deal at half this price.

One criticism skeptics often voice in discussions about fostering patient consumerism is that a patient having a heart attack is not in a position to shop for the cheapest cardiac care from the back of an ambulance taking him to the emergency room. Few people would disagree. But only about $1 out of $20 is spent on patients who enter the health care system through the emergency room door.

Consider the experience of an insured patient whose doctor orders an abdominal CT scan. Receiving this service at a hospital outpatient department could cost the patient (or her health plan) nearly $3,000 depending on whether the patient’s deductible has been met. Yet this same service is available outside the hospital at a medical imaging center for prices that are often 85 percent less. Few health plans provide the tools for enrollees to compare prices and few patients have an incentive to ask about prices.

Doctors and hospitals don’t quote prices and don’t compete on price because most patients are largely insulated from the adverse effects of not making price comparisons and acting like consumers. Both economic studies and common sense confirm that people do not shop carefully and prudently when someone else is picking up the tab. The contrast between cosmetic surgery and other medical services is important. One sector has a competitive marketplace and stable prices. The other does not.

The medical marketplace should work more like the market for cosmetic surgery.

Study: The Market for Medical Care Should Work Like Cosmetic Surgery.

   image:cosmeticsurgery/shutterstock

TAGGED:healthcare costs
Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

a woman walking on the hallway
6 Easy Healthcare Ways to Sit Less and Move More Every Day
Health
September 9, 2025
Clinical Expertise
Healthcare at a Crossroads: Why Leadership Matters More Than Ever
Global Healthcare
September 9, 2025
travel nurse in north carolina
Balancing Speed and Scope: Choosing the Nursing Degree That Fits Your Goals
Nursing
September 1, 2025
intimacy
How to Keep Intimacy Comfortable as You Age
Relationship and Lifestyle Senior Care
September 1, 2025

You Might also Like

Posner: Use Research Dollars to Make Life Better, But Not Longer

May 23, 2011

How to Make Your Blogs Go Viral

February 26, 2015

Decisions, Decisions: Term vs. Permanent Life Insurance

November 29, 2013

What is the role of Government and Industry Leaders in Patient Communication and the Patient Experience?

October 13, 2015
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?