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Cosmetic surgeons are tightening skin less and their budgets more, according to the Economic Impact Survey released Wednesday by the Chicago-based American Academy of Cosmetic Surgery.

“We sell perception,” said Dr. Patrick McMenamin, academy  president. “And the perception is that the economy’s down.”

The recession has affected nearly 80 percent of cosmetic surgery practices in the United States, according to the academy’s survey of 242 members. Cosmetic surgeons report a 50 percent drop in patient volume in the third quarter of 2008, forcing them to cut employees and costs.

The latest U.S. Labor Department unemployment report, released Jan. 9, shows that 524,000 Americans lost their jobs in December alone, bringing the year-end total to 2.6 million jobs lost and a national unemployment rate of 7.2 percent, a 16-year high. Millions more have taken cuts in income.

“We are all interdependent,” said McMenamin, noting that even the Big Three automakers’ turmoil affects cosmetic surgeon’s practices and profits.

At his Schaumburg and Gold Coast offices, Dr. Jaime A. Galiano has shifted from facelifts toward tissue fillers and BOTOX injections. He said fewer of his patients can afford costly surgical procedures as before.

The Economic Impact Survey showed that more than 70 percent of cosmetic surgeons’ patients are choosing non-invasive procedures, and more than 80 percent are choosing less expensive procedures compared to past years.

“People who’ve lost money in the stock market are feeling a lot poorer these last few months,” said Willard G. Manning, a health economist at the University of Chicago. “They are going to put off (cosmetic) surgeries or select more affordable ones.”

While he’s sticking with cosmetic surgery, Galiano’s experience in treating varicose veins has been a financial bedrock for his practice. Cosmetic surgeons undergo mandatory training in other surgical specialties before moving on to cosmetics, allowing them to revert to more mainstream practices when needed.

The fallback is happening all over, the report said. More than one-third of cosmetic surgeons are seeing more patients from their original specialty. Most who make the switch are going back to dermatology, ear, nose and throat, general surgery and obstetrics/gynecology.

“We’ve had the fortune of getting paid cash and making a good living for a long time now,” said McMenamin, who practices in Sacramento, Calif. “But times change.”

Manning believes that change is largely because of health insurance coverage. While health insurance covers many reconstructive surgeries and breast reductions, the mainstays of the cosmetic surgery industry are elective, making the industry much more sensitive to fluctuations in the economy.

Those surgeons who don’t want to revert to primary specialties are pumping up their practices with more offered cosmetic procedures. For example, among his services, Galiano offers liposuction, eyelid surgeries, microdermabrasion, chemical peels as well as hair removal and restoration.

“You have to diversify,” he said. But providing more services means more equipment, with some machines hitting $40,000, according to Galiano.

The irony is that these new machines and surgeries are coming out when practices don’t have the money to afford them. Yet the new technology is what surgeons need to stay competitive when patients need shorter recovery times to avoid taking time off work, McMenamin said.

A quarterly earnings statement from Mentor Corp., a breast implant manufacturer, reported that the net sales of breast implants sold in the United States decreased 5 percent during the six months ending Sept. 26 over the same period the previous year.

But that’s not the only overhead practices are cutting. McMenamin added that the academy has pulled its Yellow Pages advertisements. The demographics that respond to such ads don’t have the finances to pay for their procedures, and the ones that can afford the procedures don’t respond to the ads. Still, more than half of cosmetic surgeons have increased marketing efforts as a result of the economy, according to the survey. But they are doing it in more creative ways.

For Galiano, that means referrals. His key demographics with disposable incomes select surgeons mainly by referrals. So, to “stay afloat,” he offers discounts to patients who refer family members to his facility, an unethical practice in most fields of medicine.

He believes that the elective nature of cosmetic surgery procedures makes the discounts both ethical and savvy. When discounts are not enough to attract new patients, products from his skincare system offer them an inexpensive alternative.

Despite such tactics to attract patients, he said cosmetic surgeons must adapt to capture the market without overly promoting services at patients’ expense.

"When you’re a pusher, you’re not a doctor,” Galiano said.