NEW YORK (Reuters) - Americans are starting to see the doctor again, but more often for cosmetic procedures, such as Botox treatments, rather than cancer screening and other potentially life-saving preventive care.
Healthcare company executives attending the Reuters Health Summit this week painted a sobering picture of healthcare use among U.S. patients who are still struggling to afford medical care.
While the jobless rate remains high, many Americans are still postponing treatment, and that is not likely to change in the short term, they said.
But when it comes to smoothing out wrinkled brows, the market is rebounding, according to David Pyott, chief executive of Botox maker Allergan Inc. (AGN.N)
“Happily, for all of the facial aesthetics and even breast aesthetics markets, we are now at a place that we are beyond the peak pre-recession,” he told the Reuters Summit.
He said demand for cosmetic procedures hit bottom in the spring of 2009 in the wake of a global financial crisis. Now sales of Allergan’s dermal fillers are 20 percent above where they peaked before the recession.
Pyott said the Botox revival was being fueled not just by the super-rich, but by consumers with an annual household income of at least $50,000.
“It’s correlated with people’s confidence about the future, maybe how much money they have got on their credit card at the time,” Pyott added.
”Of course, when you think about it we all want to look better, right?
He compared a $400 Botox injection or an $800 wrinkle filler procedure to treating the family to a baseball game or fancy dinner, calling it “one of life’s little luxuries”.
“Everybody has their own choice,” he said. “The face is the one outfit you get to wear every day.”
Still, Americans’ confidence in their ability to access and pay for healthcare dropped to a historic low in April, according to a consumer sentiment index produced by Thomson Reuters. The index dropped 1 point in April, to 95.
Yet overall use of healthcare services in America is improving slightly, executives and Wall Street analysts said.
There are signs that it has begun to stabilize over the last two quarters after dropping sharply during the recession, Goldman Sachs noted in a research report.
“We now see a potentially more stable growth rate for utilization than what occurred in 2010,” the report said.
The incoming CEO of Covidien Plc COV.N, a maker of surgical instruments and other medical devices, said he has seen a modest increase in procedures, and even some elective procedures in recent months, which is a promising sign.
“We have seen signs of recovery in a couple of the elective areas, one being bariatrics and the other one being thoracic,” said Jose “Joe” Almeida, who currently runs the company’s medical device division.
He was referring to procedures like gastric bypass surgery to help weight loss. Thoracic surgery involves procedures on organs in the chest, such as the esophagus or lungs.
“The bariatrics area is a good one, because it shows there are people going back to work full-time, getting insurance, and having the ability to ... pay for the co-pays that a procedure like that would require. So that makes us cautiously optimistic about the future,” Almeida told the Reuters Health Summit.
“If we continue to see a slight improvement in unemployment, it should translate into better outcome for bariatric procedures, and any kind of elective procedures in the U.S.,” said Almeida.
Becton Dickinson & Co (BDX.N), which sells diagnostic tests for infectious diseases and cancer, as well as medical supplies and laboratory equipment, does not expect a rebound in the United States, said Chief Executive Ed Ludwig.
”We describe this year as a year that was going to be stabilizing and increasing very modestly, but not anything like a full-fledged rebound and I think that’s what we’re seeing ... a serial flatness in utilization.
“We have not yet seen, nor are we seeing, any dramatic increase in utilization,” he told the Reuters Summit. “We are prepared for low single-digit growth in the U.S. and Europe for the foreseeable future.”
Over the longer term, when healthcare reform is fully enacted, utilization will improve, noted Tim van Biesen, head of Bain & Co’s healthcare practice.
“Reform matters,” he said, noting that it will increase demand for lower-end products, such as sutures and scalpels, the most.
“Assuming the economy continues to restore itself over the next year, by the end of the year we should be seeing reasonable growth numbers again,” he said.
Reporting by Debra Sherman and Susan Kelly; editing by Matthew Lewis