Fortunately surgical hair loss treatments have come on a long way since they were first performed half a century ago. Traditionally surgery has been regarded as a last ditch option for when everything else has failed, however techniques have been refined and costs have come down - making surgery a much more attractive proposition. It's also the only permanent hair loss treatment.
The crude hair transplants of yesterday (where hair was 'planted' in rows resembling a doll's hairdo) have been replaced with natural looking hair restoration techniques. The idea's simple enough; thick 'terminal' hair is 'harvested' form the back of the head in one 'mega-session' of up to 2000 hairs. The donor area is then stitched up and the graft divided into a number of 'micro-grafts, each containing between one and three follicular units. The grafts are then transplanted into clusters that ape natural hair growth. The results are impressive although the procedure does require a number of sessions spread over time. It also doesn't come cheap, however it's worth remembering that payments tend to be one off, rather than every month for life (as is the case with hair loss medicines).
Hair restoration is by far the most popular surgical technique and currently represents the cutting edge of cosmetic surgery, however it isn't for everyone and there are a couple of other alternatives. Scalp reduction involves reducing the bald area by cutting out a portion of the bald scalp and stretching the hair covered scalp over it. It's most suited for localized hair loss (such as on the crown) and is nearly always followed up with hair restoration. Another option is succinctly referred to as 'flaps' and involves making an incision along the hairline and stretching the 'flap' and sewing it down again.
Surgery always carries with it a risk and there's a school of thought that believes that any non-essential surgery is foolish. While straight forward hair restoration procedures carry little chance of complication, the others carry much more significant risks. Before undergoing any procedure discuss all the options with your hair loss specialist and an independent dermatologist.