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01 / 05
What Cosmetic Surgery Innovation Can Teach Us About Healthcare Costs

Blog Post | Cost of Services

What Cosmetic Surgery Innovation Can Teach Us About Healthcare Costs

The average time price of 19 procedures has fallen by 50 percent since 1998.

Gale Pooley —

Summary: Hospital services costs have surged, raising questions about the effectiveness of regulation and government intervention in the healthcare industry. To investigate the potential impact of free markets on cost trends, we examined the time prices of common cosmetic surgery procedures, which are elective and typically not covered by insurance. Our analysis reveals a significant decline in the relative time prices of these procedures, indicating increased abundance driven by innovation and market competition.

The Bureau of Labor Statistics reports that since 1998, hospital services costs have increased 61 percent faster than average wages and far outpaced consumer price index inflation. This industry is highly regulated, and government restricts supply and subsidizes demand.

Would free markets help to reverse these cost trends? To answer this question, we looked at the time prices of 19 common cosmetic surgery procedures. These procedures are elective, and insurance companies typically don’t provide reimbursements. Cosmetic surgeons also have been relatively free to innovate, and cosmetic surgery centers are globally competitive.

The American Society of Plastic Surgeons annually publishes prices for a variety of procedures. We compared the nominal prices from 1998 to 2022 against the average hourly wage rates of unskilled and blue-collar workers. This gave us relative time prices over time.

The average time price fell by 50.3 percent over this 24-year period. For the time it took to earn the money to pay for one procedure in 1998, you could get over two procedures today. Procedure abundance has increased by over 100 percent. The time price of chemical peels and laser hair removal fell the fastest by 87.7 percent and 80.1 percent, respectively. However, two procedure costs increased: upper arm lifts increased by 6.7 percent and facelifts by 1.6 percent.

Bar chart displaying Nominal hourly wage rates from 1998 to 2022

The above analysis compares categories of wage earners over time, but what about individuals? We typically start as unskilled workers and then advance as we acquire more productive skills, knowledge, and experience. Categories remain constant while individuals are upwardly mobile. If we look at an unskilled worker who “upskilled” to a blue-collar worker, cosmetic surgery procedures have become dramatically more abundant.

Graph showing nominal hourly wage rates for different groups of workers, with all groups showing increases from 1998 to 2022.

From 1998 to 2022, nominal unskilled hourly wages increased by 102.8 percent, while blue-collar hourly compensation increased by 91.2 percent. The average between these two categories is 94.7 percent. If you started out in 1998 as an unskilled worker and moved up to a blue-collar worker, your nominal hourly compensation increased by 348.5 percent.

Comparing an upskilling worker’s hourly compensation to the prices of cosmetic procedures indicates that the average time price fell by 78.4 percent. These workers could get 4.63 procedures in 2022 for the time price of one in 1998. Personal cosmetic surgery abundance increased by 363.5 percent for upskilling workers, growing at a 6.6 percent compound annual rate, doubling every 11 years or so.

The figure shows the nominal and time price for various cosmetic procedures from 1998 to 2022.

This article was published at Gale Winds on 2/21/2024.

New York Times | Conservation & Biodiversity

Bridges and Tunnels in Colorado Are Helping Animals Commute

“Wildlife crossings are growing in popularity across the country, and in recent years, Colorado has emerged as a leader. Since 2015, it has built 28 new large game crossing structures, according to the state Transportation Department…

Wildlife crossings, when combined with long stretches of fencing to funnel animals to the right location, have been found to reduce vehicle collisions with large animals by more than 80 percent.

They are expensive, but research has shown they can save money when installed on stretches of highway with at least an average of three collisions between motorists and deer per mile per year. For collisions with elk and moose, which are bigger and therefore cause more damage to vehicles and people, that threshold goes down to less than one collision per mile per year.”

From New York Times.

DD News | Infrastructure

India’s National Highways See 60 Percent Growth in a Decade

“India’s National Highway network has grown by 60% over the past decade, expanding from 91,287 km in 2014 to 146,195 km by 2024, as per the Ministry of Road Transport and Highways (MoRTH). In addition, high-speed corridors have surged from 93 km to 2,474 km, significantly enhancing road connectivity across the nation.”

From DD News.

Our World in Data | Poverty Rates

Indonesia Reduces Extreme Poverty Rapidly

“Some people assume that China is the only reason global extreme poverty has declined. But that’s wrong: many other countries have seen dramatic reductions in poverty. Indonesia is one clear example…

In 1984, three-quarters of Indonesians lived on less than $2.15 per day. By 2023, this had fallen to less than 2%. While it didn’t quite match China’s decline, it has still been impressive. The number of people living in extreme poverty has fallen from 120 million to 5 million.”

From Our World in Data.

Ars Technica | Accidents, Injuries & Poisonings

Waymos Crash a Lot Less than Human Drivers

“Since 2020, Waymo has reported roughly 60 crashes serious enough to trigger an airbag or cause an injury. But those crashes occurred over more than 50 million miles of driverless operations. If you randomly selected 50 million miles of human driving—that’s roughly 70 lifetimes behind the wheel—you would likely see far more serious crashes than Waymo has experienced to date.”

From Ars Technica.