By a Nose : Plastic Surgeons Find Egos Are Where the Money Is as HMOs Cut Back
Edward O. Terino, an Agoura Hills plastic surgeon, performed about 250 operations last year, including dozens of breast implants, nose jobs, tummy tucks and face lifts. He also found plenty of time for lounging by the pool at his million-dollar home on Mulholland Highway and for three-day weekends at his Palm Desert condo.
Other doctors and surgeons have watched their workloads grow and incomes shrink in recent years amid health care reform driven by cost-cutting health maintenance organizations and other managed health care plans. But Terino, 57, has been virtually undisturbed by the reforms, thanks to a widespread human frailty that he treats but no health insurance plan ever covers: vanity.
That indomitable personality trait provides Terino with an endless flow of patients willing to spend thousands of dollars out of their own pockets to have their noses sculpted, thighs liposuctioned or breasts enlarged. These so-called cosmetic procedures were never covered by health insurance plans, so Terino and some other veteran plastic surgeons find themselves among a happy few in the medical world out of the HMOs’ penny-pinching reach.
Of course, not all plastic surgeons are as fortunate as Terino. Most still see a large number of patients with legitimate medical problems whose operations are covered by health insurance. Dr. Samuel Bern, 38, a plastic surgeon who recently started his own practice in Ventura, spends the bulk of his time treating patients with disfigurements caused by cancers, car accidents or other traumas.
For plastic surgeons like Bern, times really are tougher because the number of procedures covered by insurance has dwindled, and reimbursement rates have fallen. Still, Bern said he makes about $180,000 a year, an average income in a field that, even in the wake of health care reform, continues to be divided not so much into haves and have-nots, but into haves and have-mores.
Terino, a stocky man whose silver hair spills over his shirt collar, is clearly a have-more. He insists his income is little more than the industry average, but other plastic surgeons say Terino, given his reputation and clientele, could be making a $1 million a year.
Inside Terino’s 4,000-square-foot office, a private elevator opens into a spacious waiting room arranged with long black sofas and a mirrored glass reception table. Sculpted blondes wander in and out of the office during the day, and movie stars and other high-profile clients often visit after hours. “Entertainment people like the privacy” of his rural Agoura Hills location, Terino said. “In Beverly Hills, they bump into their friends.”
Though he is still listed on several HMO referral lists, Terino almost never sees HMO patients anymore because of falling reimbursement rates and the red tape of getting procedures authorized and paid for. “It was always a hassle,” Terino said. Focusing on cosmetic surgery “is a way of . . . being independent.”
Another plastic surgeon sidestepping the HMO invasion is Dr. Lawrence Stein, 47, of West Hills. Stein said five years ago his practice was evenly split between reconstructive and cosmetic surgeries, but today two-thirds of his surgeries are cosmetic, and those procedures account for about 95% of his income.
“We don’t even send in bills for most emergency or clinic work” because insurance reimbursement is so meager, said Stein, who specializes in facial surgery and charges from $5,000 to $10,000 for a nose job.
To attract more cosmetic business, Stein advertises heavily and rents part-time space in Beverly Hills, the capital of cosmetic surgery. Competition for cosmetic patients is fierce, Stein allows, but the supply is endless. “There are 300 million ugly Americans,” Stein said, “and there are not enough plastic surgeons.”
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Terino and Stein were both quick to point out that when they started their careers, they had to hustle for insurance-covered business like other young plastic surgeons. As their reputations and patient bases grew, they shifted to cosmetic procedures. Most plastic surgeons tend to follow the same path, but the rise of HMOs has made the shift to cosmetic procedures more urgent.
Over the past 10 years, hundreds of employers in California have turned to HMOs for relief from spiraling health insurance costs. Today, one in three Californians is an HMO member. HMOs cut costs in a number of ways, and doctors dislike most of them. Because HMOs control the treatment choices of their members, they can force doctors to take deep pay cuts, or risk losing patients. HMOs also use so-called gatekeepers--usually family physicians--to make sure patients see specialists only when absolutely necessary.
Younger plastic surgeons who don’t yet have the reputations to attract a lot of cosmetic patients feel the economic pinch the most. Bern set up practice in Ventura just three years ago, and already he has seen his reimbursement rates slashed in half. Breast reduction operations for which he was paid $4,000 three years ago now pay $2,000, he said. And skin cancer removals that once fetched $2,000 now pay $1,000.
If Bern could see more patients to make up the difference, it wouldn’t be such a problem. But Bern said he is already working 100 hours a week and seeing as many patients as he can.
Each day, Bern gets up at 4 a.m. to make rounds at three of the five area hospitals with which he’s affiliated. He works regular hours at his office, and then spends two nights a week, plus several hours each weekend, stitching up victims of grisly accidents delivered to local emergency rooms. He is also on call for an area mental hospital, where he said he has sewn together the slashed wrists of 20 patients who attempted suicide in the past few years.
While Terino performed about 250 operations last year, Bern said he performed at least 500, and only 10 were cosmetic surgeries. In one recent week, Bern treated a woman with ulcers on her legs, a heroin addict with an infected hand, and he delivered devastating news to a man whose infected heart has released dozens of blood clots into the arteries of his legs and feet. “His toes are black,” Bern said. “I recommended amputation of his leg.”
To keep patients coming, Bern has signed up for every HMO that will take him, and has solicited referrals from virtually every physician in Ventura. “When I came to town, I went around to every doctor,” said Bern, a graduate of both Harvard and Yale. “I took dermatologists out to lunch and gave lectures at hospitals. You have to be friends with everybody and go everywhere or you won’t have enough patients.”
Bern, who is married and has two young children, said he gets the greatest fulfillment from doing reconstructive plastic surgery. But health care changes “pressure you into doing cosmetic surgery if you want to work less than 100 hours a week,” Bern said. “Nobody is going to feel sorry for a plastic surgeon, but I thought it would be a little more normal a lifestyle.”
Not all young surgeons have to scramble as Bern does. At Kaiser Permanente in Woodland Hills, Dr. Saul Berger, 34, said he works about 50 hours a week and gets paid a comfortable, six-figure salary. Unlike most HMOs, Kaiser builds medical centers then hires doctors to treat all of the Kaiser members in the area. As a result, Berger doesn’t have to worry about paying office rent, hiring secretaries and nurses or seeking patient referrals.
Ten years ago, few plastic surgeons would have picked the security of Kaiser over the riches of private practice, but Berger said that is changing. “We get calls all the time from people asking if we’re going to be doing any hiring,” he said.
The pressures plastic surgeons face today are particularly acute in Southern California, where HMOs are more dominant than most places in the country, and where there are reportedly more plastic surgeons than anyplace else in the world.
Of the 4,700 plastic surgeons in the United States, about one in 12 is in Southern California, according to the California Medical Assn. That includes 250 plastic surgeons in Los Angeles County, and another 130 among Ventura, Orange, Riverside and San Bernardino counties.
Only 10% of these plastic surgeons can attract enough cosmetic patients to abandon reconstructive work. So most surgeons occupy a middle ground, where cosmetic business can compensate for declining income from insurance-approved surgeries.
But even the cosmetic-surgery side of the business has had its problems in recent years. Southern California’s economic troubles have slowed demand for cosmetic surgery--a luxury good, much like fancy cars and vacation cruises--and a number of health care concerns have popped up, including what some plastic surgeons call “the silicone crisis.”
Dr. Genevieve MacDonald, a plastic surgeon in West Hills, sees a mix of patients, but she specializes in enlarging women’s breasts.
She charges about $5,000 for the operation, but said it’s a small price. Many women with small breasts “really are unhappy,” she said. “I feel kind of sorry for them.”
A few years ago, the federal Food and Drug Administration forbade silicone gel breast implants, by far the most popular variety, except for use in mastectomy patients.
In making the ruling, the FDA cited concerns about silicone leaking from the implants and causing a number of health problems.
Saline implants, which contain saltwater, are still available, but many say they aren’t as natural-looking as the silicone variety. As a result, MacDonald, 52, has gone from performing up to four breast implant operations a week, especially in the spring and summer, to just “a trickle,” she said.
That unhappy turn of events was compounded by the struggling regional economy. MacDonald said her business has fallen off 30% since the recession hit.
To compensate, MacDonald has cut her advertising budget from $35,000 a year to about $12,000. She also stopped renting space in Beverly Hills, where a half-day in another doctor’s office cost her $1,000.
The local recession has been brutal, she said, but there is an upside. All those people who put off tummy tucks, nose jobs and face lifts in recent years are aging by the day, and are bound to come looking for help sooner or later.
“Things will get better,” MacDonald said. “People will always want their faces and bodies to look good. When they have the money, they’ll come back.”
