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‘Korean hair transplant market too small, too tough’

Marian Chu  기사승인 2017.10.12  09:01:43

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Hair transplants in Korea are reputed for high quality and low price. While benefitting patients, practicing clinicians say it’s difficult to break even in the small and crowded market, especially when they use advanced technology.

Professor Huh Chang-hun허창훈 from Seoul National University Bundang Hospital (SNUBH)분당서울대병원 is a dermatologist specializing in skin cancer surgery and hair disease. In between treating patients, researching, and teaching, he also serves as the mentor of the International Society of Dermatology and the American Society of Dermatology – the only person to serve as the mentor of the two societies simultaneously.

Professor Huh Chang-hoon explains hair transplant surgery in an interview with The Korea Biomedical Review.

​​​​​Although he prefers to focus on treating diseases, he does not hesitate to publicize the inner workings of the cosmetic aspect of dermatology, stressing that it has become one of the most popular fields in Korean medicine due to its relative potential to make a profit.

First Korean hospital to adopt robotic hair transplantation system

Restoration Robotics’ ARTAS is the “first and only” robotic hair restoration system that uses high-resolution digital imaging, image-guided robotic alignment, and minimally invasive dissection for hair harvesting and transplantation.

“SNUBH implemented ARTAS about four years ago after I visited Restoration Robotics Denver clinic as the first Asian doctor to do so,” Huh said.

ARTAS

The device automates the follicular unit extraction (FUE) method, one of the two primary means of obtaining follicular units. As an update from traditional strip harvesting, FUE does not require strips. Instead, it takes follicles one by one, making the procedure more precise. Patients can also do without the linear scar often left from the strip technique.

To begin the procedure, doctors harvest the patient’s hair follicles for an hour and a half, after which patients take a rest. Grafting takes around three hours. The patient may experience stinging or discomfort during anesthesia, but it does not hurt, according to the surgeon. After the surgery, the individual may resume day-to-day activities without requiring dressing or long post-surgery recovery time.

Despite the new and improved technique, Huh says it’s difficult to make a profit with ARTAS because of three main factors: too many surgeons, the high price of the technology itself, and low cost of the strip technique.

As the medical insurance drives down the cost of all medical procedures, doctors running their clinics have been reported to scrape by, without making much profit. Cosmetic treatments, on the other hand, are left uncovered, causing a pool of young graduates to specialize in cosmetic procedures to make a living.

Because there are many doctors performing hair restoration, doctors compete mostly on price, driving down the cost of the procedure.

Related : Insurance benefits promised for all medical treatments

Doctors working at large university hospitals face a different problem. They have little incentive to promote robotic hair restoration due to the national health insurance system. Most get paid a salary, which does not increase with the increasing number of patients. Most doctors see around 60 patients every three hours with a patient waiting list of more than a month.

Market with high entry barrier faces pricing challenges

“The problem is the Korean market is too tough. Although it varies by source, people say there are 2 to 10 million candidates for hair restoration. Although there is a lot of demand, there are too many surgeons working in the hair restoration market, and with the meager prices. It is not easy,” Huh said.

Korean prices for robotic hair restoration procedures are similar to the U.S. Hospitals charge 6 to 10 million won ($5,295-$8,826). SNUBH is on the pricey side – around 8 million won plus 10 percent in VAT tax – totaling about 9 million won, according to Huh. Local clinics charge roughly 6 million won.

From the clinician side, the ARTAS device itself costs around 400 to 500 million won. On top of the baseline cost, each surgery requires an additional 1.5-2 million won to cover the cost of a kit needed for each patient.

Meanwhile, strip surgery is much cheaper. The traditional method costs around 3 million won in Korea, and some places charge around 2.5 million won, according to Huh, which is one of the lowest in the world.

The doctor notes a phenomenon where local clinics will implement a robotic hair transplantation device in their hospital to “show off” to their patients, and then whisk them away to another room for strip surgery due to its high cost.

“All the foreign doctors I talk to are surprised (about the price of the strip technique),” Huh said. “The low price of strip surgery creates a huge price gap, making it difficult to increase the number of robotic hair restoration procedures.”

“These clinics do not operate the robot on every patient because the kit needed for the operation costs 1.5-2 million won per patient,” Huh said. “So it’s mostly to show the patient they have high technology.”

Decreasing foreign patients, tight regulation

Amid ongoing diplomatic scuffles with China, Huh points to the decreasing number of Chinese patients receiving beauty treatments in Korea. In the past couple of years, the high tech of Korea’s medical industry has attracted foreigners, especially Chinese, to this country.

Related : Cosmetic, beauty treatments most popular among foreigners

“Many Chinese patients want the surgery done in Korea as we were the pioneers of hair restoration,” he said. “But you know, because of THAAD, we don’t have as many Chinese patients. The only way (for sustainability) is to reduce the cost (of ARTAS system).”

Korean doctors could develop the technology, which is a feat in itself, despite stringent regulations, according to Huh.

“The problem is always the insurance system. The tech itself is advanced, but regulation is tough. It’s hard to get approval for a trial or to develop something,” Huh said. “I talked with many scientists and companies that develop these kinds of devices, and everyone complained. The market is small, and the process is too tough.”

From a macro view, Huh suggests relaxing regulations.

“The government does not have to give research funds to scientists. It has only to loosen the rules,” Huh added. “If the regulation is not tough, then it automatically leads to new technology. If the money is there, everyone will get in the business.”

yjc@docdocdoc.co.kr

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