With the growth of cosmetic injectable treatments, particularly among younger people, the industry is continuously butting up against its biggest issue: cost.
Let’s face it, cosmetic services are pricey. As an example, Wall Street Dermatology cosmetic provider states on its website that Botox treatments can cost $500-$600 per area and treatment session. If a treatment plan requires two areas to be treated across three total sessions, the entire course of treatment would cost $3,000-$3,600. Meanwhile, the clinic suggests that, for fillers, a person’s starting budget should be $1,100. Something like contouring the cheeks can cost $1,000-$4,000. To address these eye-popping prices, PatientFi launched on Monday a new subscription offering for providers called Privi, which seeks to make such cosmetic treatments financially accessible to patients.
PatientFi is a patient payment solution for “out-of-pocket” health-care expenses. In partnership with health-care practices, PatientFi offers patients a financing alternative to pay for procedures and treatments not covered by insurance. Privi, however, is billed as a subscription offering, with more flexibility and fundamental differences compared to a financing product. In essence, it gives providers an out-of-the-box solution for offering a tailored membership to their patients. Individual aesthetic practitioners frequently offer their own monthly memberships, giving patients access to discounted pricing on services and often a free monthly service, as well. Provider examples include Alchemy43 medspa, NYC-based SkinSplendid and New Jersey-based Bare Aesthetic. Many other providers, like medspa Ever/Body rely on buy-now, pay-later partners like Affirm.
The digestible monthly payments of memberships, BNPL services and now Privi could be particularly attractive options for younger patients. With the popular “preventative” conversation around neuromodulators like Botox, positioned as prophylactics for wrinkles, a key message is to start young. And manufacturers like Botox-made Allergan have directly sought to capture this market. In 2019, Allergan released a Botox campaign called “Own Your Look,” primarily centered on 20- and 30-something customers.
Todd Watts, co-founder and CEO of PatientFi, said that PatientFi customers typically use the platform for “large ticket” procedures, like liposuction or breast augmentation. These cost upward of several thousands of dollars, where payments can stretch out over years. The majority of PatientFi customers use the platform for cosmetic procedures, he said. The rationale for a separate payment product in the form of Privi was to create a subscription offering for less expensive, but still costly, cosmetic services with more dynamic treatment plans. Unlike PatientFi, which requires a credit check and charges interest, Privi has a 100% approval rate for patients, and they do not pay any interest or additional fee in order to use it. Instead, providers pay a flat $399 monthly fee to access the Privi software. However, late patient payments can cost an additional $15-$30, depending on the patient’s state of residence. Patients sign up for Privi through their provider if it’s offered or find a provider through Privi. They then work with their provider to develop their treatment plan; rather than paying the full upfront cost, they begin with their first monthly subscription payment. Monthly costs can vary depending on the treatment plan.
“Privi is a natural extension of the patient financing business because we fund those doctors up front for those subscription services,” said Watts. “Most providers are independent and don’t have subscription loyalty programs like this. From the provider’s perspective, this eliminates the risk that they’ll provide treatment to a patient without the patient scheduling a follow-up or touch-up appointment. Or that the patient will see an ad for a less expensive provider and go to them next time.”
The costs around elective services like neuromodulators and fillers have been an ongoing conversation and a sticking point for the cosmetic injectables category. In 2020, Glossy reported on the change to pricing models, wherein providers sought to upend the cost-per-unit pricing that dominates aesthetics by offering more fixed prices. Meanwhile, newer products, like Botox competitor Juveau, have sought to market themselves as less expensive in order to siphon market share. Juveau advertises itself as 20-25% less expensive than Botox. Meanwhile, Daxxify advertises that it lasts longer than competitors, at about 6 months compared to the usual 3 months, meaning fewer trips to a provider and ultimately less cost.
According to an American Society of Plastic Surgeons 2022 survey of 1,850 member surgeons, 76% of respondents reported seeing increased demand compared to pre-pandemic levels. Nearly a quarter of aesthetic-focused practices reported their business had doubled, and 6% reported a dramatic increase of more than double their volume in the prior year. Not only has demand increased, but the amount of patients willing to spend has, as well. Fifty-nine percent of respondents noted patients are willing to spend “somewhat more,” and 17% noted a substantial increase in patient spending for procedures now, compared to pre-pandemic.
PatientFi has over 3,000 providers in its network, and over 50,000 people have used it since the company’s launch in 2017. At launch, providers will be able to add Privi to their existing PatientFi SaaS license. PatientFi will continue to focus on promoting Privi to its provider network and create membership-style plans with them so they can entice their patients. Aside from price, Watts pointed out that compliance for certain services, like neuromodulator injections including Botox, is an issue for providers that PatientFi can hopefully resolve. Neuromodulators, specifically, are recommended every 3-4 months. However, most patients do not adhere to a regular cadence of treatment. According to a 2021 research article on millennial interest in Botulinum Toxin injections, about 43% of respondents who have received botulinum toxin injections receive it regularly, 39% sometimes receive injections regularly, and the remaining 17% do not receive injections regularly. And for all patients who regularly receive injections, 33% receive them three or more times per year, 50% receive them twice yearly, and 17% receive them yearly.
“Cost is the No. 1 reason why patients don’t move forward with an elective procedure,” said Watts. “Cost is therefore the main barrier to the growth of these products. Manufacturers are constantly working on better clinical outcomes and advances, but nobody’s ever been focused on making these products more affordable.”