Since 2007 the number of medspas and hybrid medical practices has increased by almost a factor of five, soaring from 800 to 4,500 (from MarketWatch. What has caused this increase, especially since the economy has been less than bullish the past few years? Such a dramatic jump can likely be attributed to multiple factors.
- The “lipstick indicator” effect – This is a classic study originally done by a major cosmetics manufacturer that found people wanted to look their best in a down economy. Since unemployment leads to an increase in competition for scarce jobs, those seeking employment try to look their best in an attempt to gain any advantage possible.
- Increased healthcare cost – Many private physicians have felt the squeeze of increasing costs but decreasing reimbursements, leading to the need to diversify revenue streams. One potentially lucrative revenue stream is aesthetic medicine and the cash paying patients it brings. Lax regulations on aesthetic treatment providers and device companies eager to train doctors in the use of their equipment offer a relatively low bar for entry into a field offering procedures like laser hair removal and removal of abnormal skin pigmentations. The biggest barrier is the capital invest required to purchase a medical laser.
- Increased narcissism – The rise of social media and a renewed interest in Hollywood stars via Facebook and Twitter may be contributing to a general self-absorption. The pressure to look their best has driven increasing numbers to seek aesthetic medical treatments. This is driving up the demand and the market is simply responding to meet this increase
So is it a chicken and egg scenario? Is the market demanding more medspas or is the increase in medspas making treatment more accessible? You decide.