Preserve Your Cosmetics Practice in An Unsettled Economy – Practical Dermatology
by Paul Winnington, Editor-in-Chief, PDF of original article
Economic indicators suggest some individuals will be forced to cut discretionary spending. A clinician offers tips for maintaining success in an off market.
The US economy seems to be in flux, as financial indicators continue to show mixed results, the markets continue to bounce up and down, and fuel costs and inflation rise. For the cosmetic dermatologist whose practice depends on patients’ discretionary spending, the news could be worrisome. But seasoned clinicians say a downturn in the economy doesn’t have to negatively impact a cosmetic dermatology practice.
Acknowledging that “certain segments of cosmetic dermatology are being threatened,” Charles E. Crutchfield, III, MD, who specializes in general and cosmetic dermatology near Minneapolis, notes that cosmetic dermatology practices built on the proper principles needn’t fear substantial loss of revenue. “With all discretionary spending, especially when it comes to luxury services and products, there is a certain group of affluent individuals that is recession-proof,” he says. “Where cosmetic dermatology will be hurt is for the group pf patients on the fence.” Fence-sitters, he explains, are patients with very limited discretionary funds. Importantly, however, physicians should make no assumptions about what patients are willing to pay.
“When it comes to appearances, it seems that most if not all people tend to put a high value on this,” Dr. Crutchfield notes, citing luxury haircuts and styling and fine clothing as examples. Therefore, he says, “The way to be proactive in any cosmetic medical arena is to not push services on price. The ideal patient is a patient who values quality.” While being competitive makes sense, it’s most important to stand out as an exceptional provider. “The Wal-Mart shopper and the Nordstrom shopper are two different customers,” he observes.
“If you want to be recession-proof, you need to make sure that your patients are coming to you for quality. If they are coming to you for price, they will be going to someone else next week who has a lower price.” Dr. Crutchfield explains. “The bitterness of poor quality lasts much longer than the sweetness of low price,” he reminds. “I focus my practice on providing outstanding service and high quality results. This seems to be the most attractive point for the affluent who have recession-proof funds for spending.”
Do Opportunities Exist?
While opportunities may be more abundant at certain times than others (such as when consumer spending is high), Dr. Crutchfield asserts that timing is what you make of it. “You need to develop your skills so you are at the top of your game. You need to develop a marketing plan to let patients who are interested in the services you provide know where you are and how to get to you, and you need to constantly monitor your plan to make sure that things are working,” he says.
To demonstrate the subjective nature of “opportunities,” Dr. Crutchfield cites the example of the VCR, which retailed for close to $1,000 when first introduced. Analysts assured that the price would fall, and in just a few years, the price was cut in half and continued to fall. “Just the other day, I saw a VCR for $39.95 at a national discount store,” he observes. Some might argue that having bought a VCR when they were first introduced for about 25-times their current cost is “bad timing.” But Dr. Crutchfield isn’t so sure. “Even though buying a VCR when it was $1,000 was ‘not a good time,’ I enjoyed the heck out if it for two years. I probably saw a couple hundred movies and had a great return on investment.” The same may hold for opportunities in cosmetic dermatology. “There is no ‘perfect time,’ it’s just a matter of when you want to jump in and get going and implement the most intelligent plan for being in that arena.”
Note that an “intelligent plan” requires research and planning, and nothing should be done on a whim. There may be no “perfect” times, but there are “bad plans.” Establish that there truly is interest or demand in your area, that the new service/procedure will not lead to negative income, and be prepared to offer the best service in your area. Strategies for assessing opportunities have been reviewed previously in this publication.
Is Cosmetic Dermatology Overtaking Medical?
The recent report that patients are seen more quickly for cosmetic appointments than for medical concerns drew a lot of media coverage, but the issue is hardly straightforward. The problem may not be dermatologists favoring cosmetic services (and the associated assumed higher revenues). Rather, the issue most likely is a shortage of dermatologists to meet patient demand.
“This is tricky and this is something that occurs in my office,” Dr. Crutchfield says, “but I think that people are looking at this in the wrong manner.” He maintains that a physician should be able to design his/her practice and see the patients that he/she desires. ” If a physician wants to, say, have half of his practice medical and half cosmetic, that’s fine. But because of the shortage of dermatologists the demand for medical appointments is fairly high. The demand for pay-out-of-pocket cosmetic services is not as high. Therefore, medical appointments tend to fill up a lot faster than cosmetic appointments.” In his own practice, Dr. Crutchfield says, new medical patient appointments are scheduling out six to nine months, whereas new cosmetic patients are scheduling out two to three months.
“Some patients are very savvy,” Dr. Crutchfield notes. “They will make a cosmetic appointment and then when they come in try to turn into a medical appointment, and we don’t allow that. So even though to the public this might be frustrating and/or look not very good, I think it is very important that physicians have the ability to design the practice type that they want to participate in.”
Dr. Crutchfield highlights another point regarding demand for medical services, the majority of which are provided to patients with health insurance: “Quite simple, people tend to utilize services more when other people are paying for them. If you have medical insurance, you make appointments. And when you have to pay out of pocket, you don’t utilize services as much.” He recalls a female patient with a large hemangioma on her nose that negatively impacted her appearance and even drew critical comments from strangers. Because her insurance wouldn’t pay for it’s removal, she wouldn’t have it taken off.
“I think a take-home message from the report is that there is a shortage of dermatologist, and the insurance companies and the pressures of practicing medicine have become so tight that many physicians are looking to engage in cosmetic services to avoid the hassles of third-party payers and the insurance companies that are trying to dictate how physicians practice medicine,” Dr. Crutchfield says.
by Paul Winnington, Editor-in-Chief, PDF of original article Economic indicators…