The knife

March 26th, 2008 — Wordman

The death of an 18-year old girl from voluntary breast surgery explains the timing of this post, but is only tangentially related to its point. In the coming days, there will likely be a huge fuss about plastic surgery in the media, with people screaming on all sides in what passes for debate in that venue. Some, like this article, will make mention of an American Society of Plastic Surgeons report (pdf) claiming that the number of breast augmentations in 2007 increased 64% over the number in 2000. Some will claim this as a sign of the decline of Western Civilization. They may be right, but not in the way that they think.

In the past five years, health insurance providers have gained more and more control over the business of health in the United States. This has made them very profitable, as this comparison of four large, publicly held health insurers—Humana (HUM), CIGNA Corporation (CI), United Health Group Inc. (UNH) and Aetna Inc. (AET)—with the S&P 500 index from 2003 to 2007 shows (for the color blind, the S&P line is the one on the bottom):

Stock comparison
Image and data from Google Finance

In the process, they have essentially gained control of the pricing of nearly every procedure that they cover. They, not the doctor, set how much the doctor charges. I will have more to say about this later but, briefly, the result of this has been to cause a toxic environment with at least two major consequences: 1) in most cases, neither the person consuming health care nor the person providing it have any input or influence on what the care costs (this basically turns the invisible hand into a middle finger) and 2) doctors are now, essentially, indentured servants to insurance companies.

As a direct result of the latter development, doctors in private practice are now forced to make one of three choices: either close their practice down now, continue practicing until forced to close by bankruptcy, or find some way of making money that doesn’t involve dealing with insurance companies. A great many doctors have been choosing the third path by exploiting a loophole of sorts: insurance companies usually don’t cover voluntary surgery. Voluntary surgery, like breast augmentation.

It should, therefore, come as no surprise that plastic surgery is on the rise. There are now huge numbers of doctors motivated to get people to pay for it, so that the doctors themselves can, you know, house themselves and eat. This makes it cheaper, easier to get, and gives plastic surgery the perception that it is now routine (which, sadly, it is becoming). Ever heard of labial plastic surgery, where women have their genital “lips” reduced? You will, as millions of OB/GYNs discover they can’t actually survive by doing things like delivering children into the world.

As I said, I will have more to say on this later. For now, keep in mind when watching all these idiots on television that the rise in plastic surgery has real economic causes.