Cosmetic Surgery And Price Competition

David Henderson points to this graph to illustrate the effect of competition on the cost of medical services.

The point is that cosmetic services are rarely covered by insurance. Consumers of these services tend to pay most of the cost out-of-pocket which has served to introduce a measure of price stability not seen in other parts of the health industry.

I don’t dispute that there is more than some truth the proposition that the costs of cosmetic surgery have been contained because of consumer price discrimination. I suspect there might be more factors operating here than that, though I am not well enough informed to ferret them out.

Having said that, is this a strong argument in favor of cost control by requiring users of medical services to have more skin in the game as opposed to government regulation as a means of control. I wish I could argue in favor of that proposition but I think it might be just too late in the game for that gambit. Had we gone this route 40 or 50 years ago it might well have worked. Now I suspect that the entrenched interests that the consumer would be asked to go up against are too formidable and the fundamental level of sophistication about the products being purchased is too rudimentary to enable them to make decisions with which they would be comfortable. It would probably take a generation to change this dynamic and I don’t see that we have the time.

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