In general, these services are not covered by insurance but rather paid for by the consumers themselves. Hence, consumers have a keen interest in finding the best value for their medical dollar.
As a result, prices have essentially stayed stable (or decreased significantly) after adjusting for inflation. In some case, the prices have gone down in nominal dollars as well!
As Perry notes:
Most importantly, none of the ten cosmetic procedures in the table above have increased in price by anywhere close to the 88.5% increase in medical care services since 1998. [Emphasis his.]Perry summarizes:
The competitive market for cosmetic procedures operates differently than the traditional market for health care in important and significant ways. Cosmetic procedures, unlike most medical services, are not usually covered by insurance. Patients paying out-of-pocket for cosmetic procedures are cost-conscious, and have strong incentives to shop around and compare prices at the dozens of competing providers in any large city.In other words, the problem we've seen of skyrocketing prices in the traditional medical market can't be blamed on "fee for service". Rather, the issue is the 3rd-party payor system, a point also made by others such as Dr. Richard Amerling in his recent Wall Street Journal piece.
Because of that market competition, the prices of almost all cosmetic procedures have fallen in real terms since 1998, and some non-surgical procedures have even fallen in nominal dollars before adjusting for price changes. In all cases, cosmetic procedures have increased in price by less than the 88.5% increase in the price of medical care services between 1998 and 2014.
Proper treatment of a problem requires a proper diagnosis, in public policy as well as in medicine. Perry's work is an important pointer in the right direction.
