Business First, November 21, 2008 – Downturn adding wrinkle to consumers’ decisions on plastic surgery

After medical school and eight additional years of surgical training, Dr. Jeffrey Donaldson is ready to start his first practice. In plastic surgery. One of the specialties suffering most acutely from the nation’s anemic discretionary spending.

Now completing a fellowship in plastic surgery of the eye in Atlanta, the Upper Arlington native plans to open a Columbus-area office in February. That would have sounded great last winter, when trade groups were reporting yet another blockbuster year for cosmetic procedures in a largely cash-only business that lacks the hassles of insurance reimbursements.

This year, surgeons are seeing a decline in elective cosmetic procedures as patients opt for just a tummy tuck instead of adding breast augmentation, or choose Botox over a face-lift. Eye surgeons, meanwhile, are reporting a decline in laser vision correction, another procedure not usually covered by insurance.
“By starting a practice, I’m also starting a small business,” Donaldson said. “This is not the perfect circumstances in which to do that.”

Donaldson’s game plan will be to rely at first on insured procedures, such as reconstructive surgery following cancer or an accident. Many new plastic surgeons start out that way and gradually build the cosmetic side of the practice through word of mouth, he said. Donaldson hopes to be no different, but – mindful of the economy – he won’t try to build too fast.

According to a survey by the American Society of Plastic Surgeons, three of five doctors have seen a decline in cosmetic procedures this year. The survey said the Midwest is the least-affected region, which may explain why Donaldson is willing to dive into the market and established practices say they’re doing fine.

“It is absolutely being seen locally. (But) my situation is a little different,” said Dr. Stephen Smith, a facial plastic surgeon who joined Ohio State University this year with a goal of emphasizing cosmetic procedures alongside reconstructive work.

Smith said the declines are more often at practices that were already at capacity and not accepting new patients. Since his practice is new, he’s seeing some growth.

“It’s probably growing slower than it would have otherwise,” he said. “It’s a concern for all of us.”

Consumers logging into Realself.com, a Web site dedicated to cosmetic procedures, are spending more time researching and are looking more often into less-invasive options, said CEO Tom Seery.

“Certainly there’s been a substantial shift in consumer demand,” he said.

Luxury item

Even surgeries covered by insurance are affected because patients are losing coverage or face higher co-payments, Smith said. Patients have expressed economic concerns during consultations, he said.

“I tell them I’m not going anywhere. This isn’t something that has to be done today,” he said.
The Columbus Institute of Plastic Surgery has steady volume, in part because Dr. Bivik Shah operates in his own surgery center, which has lower facility costs than a hospital, said practice administrator Mary Beth Smith. It’s unclear what growth would have been without the economic crisis, she said.

“They may have a list of three or four items, but they pick the one that’s bothering them the most,” she said. “Everybody’s seen the decline. We are considered a luxury item.”
Columbus Aesthetic and Plastic Surgery is on track for at least 15 percent growth this year, practice member Dr. John Wakelin said. Patients at times are opting for one procedure instead of two, he said, but the downturn hasn’t hurt.

“My revenue is up significantly from last year,” said Dr. Carol Clinton of Timeless Skin Solutions LLC in Dublin.
Clinton isn’t a surgeon and specializes in surface skin treatments such as injections and lasers, which more people are choosing. In the down economy, established patients are stretching time between treatments by a few weeks, she said.

Lasik down

The downturn in vision correction surgery is seen most starkly in the results for publicly traded LCA-Vision Inc. The Cincinnati-based chain, which operates a LasikPlus Vision Center at Easton, saw a 50 percent drop in revenue to $37 million in the third quarter, resulting in a $5 million loss. Through the first nine months, procedures are down 37 percent.

“Interest in elective procedures, especially things like lasik, have always trended along the line of the consumer confidence index,” said Dr. Curtin Kelley, director of refractive surgery for Arena Eye Surgeons in Columbus.

Kelley’s lasik volume is down about 15 percent from last year, he said, but overall business is doing fine. Several patients are migrating to implantable lenses, which can be more expensive.

“The demand is still there,” Kelley said. “If it’s not affordable now, they wait till next year.”

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