EN inspects the real bottom line

Britons will spend over £1bn on cosmetic surgery and treatments this year, with over 1,600 procedures performed each day. The pursuit of aesthetic perfection is no longer restricted to the middle aged and middle class. Young men and women, keen to replicate the celebrity image, are spending big on nose jobs, facelifts, boob and pec enhancements and treatments for sweaty hands and hair loss.

But the lenient regulation of some procedures and the influx of providers offering dramatically different standards of care means there are relatively few set-ups operating a predictable, sustainable and profitable business model in the cosmetic surgery industry.

Dr Patrick Bowler is one who is. He is co-owner and medical director of Court House Clinics – a portfolio of eight clinics which offer a range of surgical and nonsurgical treatments including eyelid and eye bag surgery, nose reshaping, fat reduction, and vein and tattoo removal.

The premises, two of which are fully-owned and the other six leased, each include a reception, consultation rooms, a minor operation suite and laser rooms. However, the clinics, typically of around 2,000 sq ft, are not equipped to offer the full range of procedures and Court House has to pay a set fee to hire theatre space within specialist private hospitals.

An overnight stay in a private hospital can cost between £200 and £300 to the clinic, and to rent an operating theatre and the necessary nursing staff, who are included in the set fee, for one procedure the clinic could pay up to £1,000.

Permanent staff at Court House Clinics include patient coordinators, clinic managers and nursing and administration staff. The surgeons and anaesthetist however, are hired on a freelance basis and can demand gob-smacking fees of up to 45 per cent of the total price of a procedure. From a patient’s £5,000 payment for a face lift, for example, the surgeon and anaesthetist combined would take up to £2,500 for their services.

When taking on surgeons to perform on his patients, Bowler takes advantage of the recent relaxation of EU rules, which since 2006 have allowed surgeons from other EU countries to come over to the UK to work without restriction. Bowler says visiting surgeons will demand slightly less than those in the UK but they can still command salaries of £500,000 or more.

He says, “When you work out what they earn from us in a couple of days, it’s big money. The surgeons in London can take over a million a year.”

While the majority (472,000 out of 577,000) of operations carried out in 2007 were non surgical. Surgical procedures still made up the bulk of spending in 2007 at £604 million compared with the £302 million spent on non-surgical work.

While surgical operations require an overnight stay, nonsurgical procedures don’t. They are also fairly quick, usually half an hour to an hour, and there is also no anaesthetic involved. So while the profit margins on a noncosmetic procedure are comparatively larger, the actual cost of the procedure, and therefore the final profit, is in fact
much lower.

Non-surgical treatments cost on average £200, compared with about £3,700 for those requiring a surgeon to wield a scalpel. However, non-surgical treatments also require people to come back to the clinic for top-ups, which is good for business.

All of the Court House Clinics are registered with the Health Care Commission (HCC) and its surgeons are on the General Medical Council’s (GMC) register for plastic surgeons, but it is thought as many as 2,000 outlets in the UK are performing nonsurgical procedures without such accreditation – a situation that is a growing concern for fullyaccredited business owners. And the Department of Health is proposing the deregulation of some cosmetic treatments used by beauty salons.

While Dr Bowler is a qualified cosmetic doctor and founder and fellow of the British Association of Cosmetic Doctors, it’s not necessary for the founder of a cosmetic surgery clinic to have their science O-level let alone a history in performing procedures

John Ryan has accumulated his fortune altering people’s appearances without knowing one end of a scalpel from the other.

He founded the Transform Medical Group in the late 1970s and sold it for £20 million in 2002. Since then he has ploughed £5 million into a new chain of cosmetic surgeries under the MYA – Make Yourself Amazing – brand.

Ryan agrees that businesses that are fully-accredited can charge more for their approved expertise, but says the red tape can take its toll financially on a start-up clinic.

“It’s taken us ages to be fully approved,” he says. “Every person that you employ has to go through police checks and we have to prepare them for that. In the meantime you’re not able to do anything for a few months.”

Ryan chose to specialise in boob jobs for the 18-35 age bracket at MYA after witnessing the growing popularity of the procedure at Transform.

“Breast augmentation is quite straightforward and the satisfaction rate is extremely high. It also lends itself to recommendations so you can build up a reputation,” he says.

Ryan, like Bowler, has a contract with two private hospitals that allows him to pay by the day for the use of a theatre for breast augmentation ops, which account for 70 per cent of his clinics’ workload.

MYA can be charged day rates from £1,000 to £2,000 by the hospitals but the fee can be negotiated if surgery is booked in high volumes.

“Like any business, if you have a lot of operations to put their way you will get a better rate than someone who operates every blue moon,” Ryan says.

Breast augmentation ops can cost anything from £3,000 to £9,000 but it’s not the desired size that dictates the price. A 150ml implant, which will give a patient a C cup, will cost the same as a 200ml implant of the same material.

Bowler says, “If you look at the headline price of £3,500 for breast implants, you will get the cheapest possible implants. It won’t be defective, but it won’t look and feel as good. The Rolls Royce end will cost three times that.”

According to Bowler, the best implants are American and are teardrop-shaped rather than looking like a couple of plates.

Ryan was at the helm of Transform when it performed the second of Jordan’s (aka Katie Price) many boob jobs and he clearly knows the power of celebrity endorsement in the cosmetic surgery industry. He has used some of MYA’s marketing budget to perform boob jobs for the likes of Naomi Millbank-Smith, who appeared on Channel 4’s Shipwrecked series.

Despite efforts in the name of research, EN struggled to find a surgeon willing to negotiate a price per inch for surgery on men’s private parts. In fact all of the clinics we spoke to see penis extension operations as ineffective and refuse to offer the operation.

Indeed, the results of the only reliable study into penile lengthening indicate that, where the most common method of cutting a ligament is used, a patient can see an average increase of 0.5cm in length. The procedure can cost between £2,000 and £5,000 and the results are generally disappointing.

When Khalid Ikram, a consultant ophthalmic and refractive surgeon, approached the banks in 2007 for funding to open a cosmetic and eye surgery clinic in Manchester, they bent over backwards to meet his funding needs.

Being founded by Ikram and three other surgeons with established careers in surgical and non-surgical ophthalmic and facial aesthetic techniques, the risk involved in the Face and Eye business model was reduced. The four founding surgeons perform all of the procedures and their career involvement in the NHS guarantees regular work.

“But the banks also wanted personal guarantees. We realised that if we were going to take the risk anyway, we may as well do it on our own,” Ikram says.

So Ikram and his partners decided to fund the start-up from personal savings, although it’s meant having to continue with their existing roles in the NHS while working part-time at the face and Eye clinic.

Ikram predicts that as much as a quarter of Face and Eye’s first year turnover will come from NHS procedures that are being farmed out by hospitals and won through a tendering process.

He says, “The staffing of the clinics along with the business rates and the consumables make up the major costs that need to be covered but that depends on the amount of work we are doing. At this early stage, it’s not a predictable business model, but this time next year it will be." 

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