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Letter from the CEO: Medical Spas are Struggling and Need to Prepare Now to Apply for Monetary Aid

Posted By Administration, Tuesday, March 31, 2020

business plan

By Alex R. Thiersch, JD, CEO of the American Med Spa Association (AmSpa)

Like all of American business, the aesthetics industry is suffering. As retail medical centers, medical spas rely entirely on public interaction. With stay-at-home orders now covering most of the country, revenue for nearly all aesthetic centers has stopped completely. Every business is feeling the effects—some more than others.

AmSpa’s recent poll of the industry showed just how badly this crisis is hitting home. In it, 93% of medical spas state that they are closed right now, which is not surprising. However, close to 20% of those businesses do not expect to ever open their doors again. That’s a sobering statistic, if it bears out—nearly one in five medical spas could go out of business permanently because of this crisis.

And it’s not just owners who are struggling. Close to 60% of medical spas have had to lay off employees during this time, with another 52% having cut salaries, most by more than 50%. The industry now has many unemployed workers, and many more who are making less than what they are used to.

And while every crisis brings opportunity, most medical spas are struggling to generate any revenue at all. AmSpa asked the medical aesthetic industry if its medical spas were generating online revenue during the time off, and while there were some positive responses, the overwhelming answers were “no,” “none” or “very little.”

I don’t have to tell you that this is a trying time for the industry.

The promising news is that under the Payroll Protection Plan of the newly passed CARES Act, medical spas should get some help. I say “should” because we still don’t know exactly how this money will be distributed, what the application process will look like or how the banking system will handle the massive influx of requests. The entire process seems daunting.

AmSpa has been doing its research, and I can tell you that there are no concrete answers yet. I’ve spoken with bankers, accountants and lawyers, and all of us are trying to untangle the language contained in the recent bill. Not all of it is clear, and there is little, if any guidance on the implementation process.

But we do know a little bit, and regardless of your position, I encourage all of you to start preparing for the process. In that spirit, here are a few things you can do right now to start getting ready.

If you have a relationship with a business banker, go through that bank for your loan. What I’ve heard from my contacts is that banks will be servicing their existing customers first and then moving on to new customers. This makes sense, but it means that many will have to wait in line. If you have a banker you trust, reach out to them immediately, let them know you will be applying for the emergency loan and ask what you can do now to get prepared. While they may not have much information, just knowing you’re prepared will help speed the process.

Get the following documents and information together right now:

  • Payroll tax returns for the four quarters of 2019, ending on December 31, 2019, and payroll tax records for January and February 2020 showing evidence of deposits;
  • 12 months of balance sheets and operating statements, starting in March 2019 and ending in February 2020;
  • Your most recently filed business tax return (2018 or 2019); and
  • A 12-month summary of your operating expenses.

Plan out cash flow for three months. While we don’t know for certain, my suspicion is that many businesses will not get funding relief for at least 60 days, and more likely three to four months. As such, it is paramount that you plan accordingly. Cash is king right now, and the name of the game is staying alive. Reach out to your landlord and other vendors—we should all be understanding and give our partners a break. See what credit you can obtain via credit cards or home equity. Look at personal cash reserves. If there’s anything you can do to keep your business going and your employees paid, do it. Much of the money you get from the government will be in the form of a forgivable loan, which means you won’t have to pay it back.

AmSpa will be hosting a webinar tomorrow to go through the new law in detail and flush out some of the specifics. We’ll also go through the above steps in more detail so you can be as prepared as possible.

We will get through this, and we’ll be stronger for it.

Tags:  Business and Financials  COVID-19 

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I Can’t Work Right Now—What Can I Do?

Posted By Administration, Monday, March 30, 2020

unemployment

By Patrick O’Brien, JD, legal coordinator, American Med Spa Association

Public-facing businesses across the country have been forced to close or severely curtail operations during the COVID-19 pandemic. Many employers have had to drastically downsize their staff or cut hours and pay. If you were laid off, are furloughed or had your hours or pay diminished, there are options that can help. Many states provide unemployment assistance, not only when you lose your job due to closure, but also to cope with reduced hours. Due to the COVID-19 pandemic, states also have expanded coverage to more workers and made qualifying easier; we discussed some of the changes here. However, more help is coming soon. The Coronavirus Aid, Relief and Economic Security (CARES) Act, which was signed into law last week, contains a major expansion of unemployment benefits.

The CARES Act creates the Pandemic Unemployment Assistance Program, which adds a number of benefits for those unemployed by COVID-19 but not eligible for state programs. This program is available to those not usually covered by state unemployment programs, including independent contractors and the self-employed, and those that have exhausted the regular unemployment benefits. Applicants must certify that they are able to work but are otherwise unemployed, partially unemployed or unavailable for work due to a number of common reasons resulting from COVID-19. It specifically does not include those who are able to telework with pay or who are receiving paid sick leave or other paid benefits.

This program is available for weeks of unemployment, which began on January 27, 2020, and extend to December 31, 2020. A covered individual may receive up to 39 weeks of assistance at their normal rate, calculated for their state, plus an additional unemployment assistance amount if the state enters into an agreement with the Secretary of Labor. If your state enters into this agreement, the typical unemployment benefits are bolstered by $600 per week until July 31. Given the popularity of this section, it is unlikely any state would not participate.

Many states have already waived the standard unpaid one week waiting period, but the CARES Act adds extra incentive for more states to do so: If a state waives this week, the federal government will provide funding for that week of benefits.

States also may obtain funding for short-time compensation programs. These programs provide funds to help employers offset the wages they pay to full-time workers as an alternative to layoffs. The maximum benefit available per worker is 26 times the weekly amount available under the state’s unemployment benefit program. The employer is responsible for funding half of the employment costs.

Keep in mind that the nation is experiencing record unemployment claims right now, so many of the websites and processing systems are overwhelmed or running slow. While the removal of the one-week waiting period will help get money in your pocket quicker, you will still need to manage until your application to the program is complete. Additionally, the CARES Act provides other funding and support options to employers to incentivize the rehiring and retention of employees, so you may also see some benefit in contacting your old job to see what position they are in now.

Tags:  Business and Financials  COVID-19 

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Concierge Medicine in a Time of Crisis

Posted By Administration, Friday, March 27, 2020

knocking on a door

By Patrick O’Brien, JD, legal coordinator, American Med Spa Association

Over the last several weeks, the coronavirus pandemic has rapidly evolved from an isolated outbreak in China to a national emergency in the U.S. with rising case totals in every state. In the face of this, emergency federal and state leaders have recommended that non-essential surgeries and procedures be postponed or canceled. AmSpa recommends that medical aesthetic practices should temporarily close. Increasingly, city and state authorities are instituting shelter-in-place rules that require the closure of non-essential businesses. As discussed here, health care is typically categorized as an essential business, but aesthetic medical procedures likely are prohibited for other reasons. In places that have yet to institute shelter-in-place orders, some practitioners are offering concierge services. However, if you are planning to offer aesthetic services at you patient’s home, here are some issues you will want to consider.

Before you start seeing patients at their homes, make sure your professional liability insurance covers these house calls. Many policies will cover them, but they may limit what types of services you can offer. It may include typical checkup or physical exam-type visits, but it may not protect you for filler or toxin injections or energy-based skin treatments. You also may want to check with your carrier on its policies for coverage during declared emergencies such as this one. Also remember that patient privacy applies not matter the location, so be sure to protect the patient’s health information the same way you would if they came to your office.

Whether medical procedures are performed in an office or a residence, they still need to meet the professional standard of care. Minimizing risk of complications and infections is part of this standard. You have much less control over the condition of your treatment room when it is in someone’s house. At your office, you can clean and sanitize the area to your requirements; at someone’s home, additional precautions will need to be taken. You may need to use additional personal protective equipment (PPE), spot-sanitize your working area and bring supplies for addressing emergencies or complications.

The coronavirus adds an additional wrinkle to this concern. While you can prescreen for symptoms, people can be contagious with COVID-19 prior to the onset of symptoms. Both you and your patient are potential vectors. When practicing in someone’s home, everyone else living there is a potential vector as well. These others would need to be accounted for and any concerns addressed prior to the appointment, especially if the patient lives with someone who is vulnerable to serious complications from COVID-19.

The general risks of person-to-person contact and the other issues with making house calls can all be mitigated by utilizing telecommunications technology. Telemedicine has made great strides in the last several years. While the rules and regulations supporting the practice are sometimes slow to catch up, most states are supportive of the practice, provided it meets the same standard of care as in-person visits. Obviously, you cannot provide treatments or perform procedures through the internet (yet), but you can provide examinations, make recommendations, prescribe treatments and generally support your patient’s health goals until you are able to see them in person again. We offer a number of resources (here is a recent one) on telemedicine, and this forthcoming webinar will speak directly to the challenges of maintaining a telehealth aesthetic business during this crisis.

Tags:  COVID-19  Med Spa Law  Med Spa Trends 

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AmSpa Issues Results of COVID-19 Medical Spa Financial Status Survey

Posted By Administration, Friday, March 27, 2020

distraught doctor

By Michael Meyer, Content Writer/Editor, American Med Spa Association

This week, the American Med Spa Association (AmSpa) conducted the COVID-19 Medical Spa Financial Status Survey, a brief survey of medical spa owners to help determine the financial impact of COVID-19 on the medical aesthetic industry. The results can be viewed here; they paint a picture of an industry that’s facing a great deal of uncertainty as a result of this public health crisis.

According to the survey results, the overwhelming majority of medical spas (93%) are currently closed; of those, roughly half closed of their own accord and half were forced to close due to shelter-in-place orders. Unfortunately, of those surveyed, over half (52%) are unsure if they are going to be able to reopen without financial assistance after the crisis subsides; 29% expect they will be able to reopen under these conditions, but 18% believe their business may never reopen.

The survey also reveals that at this point, a little over two weeks into the crisis, many medical spas have had to take drastic financial measures in order to adjust to the lack of revenue coming into their businesses. Fifty-nine percent say they have had to lay off team members; of these, 38% have only laid off one or two team members, but 25% have laid off more than nine, 18% have laid off three to four, and 16% have laid off five to six. Only 19% of respondents are paying these employees while they are laid off, but of them, half are paying more than 50% of their salary.

Only 52% of respondents say that they have reduced their employees’ salaries, but those who have cut salaries have had to make those cuts deep—79% say they have reduced their employees’ salaries by more than half.

Some medical spas are managing to generate some revenue via online sales, but few are finding much success doing so. Here is a selection of responses to the survey question, “Are you generating any online revenue?”

  • “Trying to by selling virtual consultations and product, but not realizing any income yet.”
  • “We are doing minimal. We have been so busy taking care of business. We have come up with daily specials, facials in a box, spa day at home, and presale specials.”
  • “Trying to launch telehealth stuff. So far I’ve made $100.”
  • “Instagram flash sales for prepaid services.”
  • “Presale of packages and Zoom meditation and mindfulness classes.”
  • “Small income from memberships, online product sales and virtual consultations. This is miniscule, however.”

However, the most commonly given answer was, “No.” Of course, this crisis has caused most Americans to face economic uncertainty, so it stands to reason that they may not be willing to spend their money on skin care products at the moment.

The passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act has hopefully arrived in time for medical spas to benefit. According to the survey, 77% of respondents are investigating loans and grants in order to keep their businesses afloat, and perhaps this new influx of cash will help them along the way until the crisis abates.

Unfortunately, nobody knows when that will be, and the responses to this survey reflect that. Many of the respondents have already had to make excruciating decisions, and while the increased availability of grants and loans may alter the equation somewhat, more tough decisions will almost certainly need to be made.

And if there’s anything else you can take from the results of this survey, it’s this: You’re not alone. Everyone in medical aesthetics is dealing with this crisis, so reach out and talk to your fellow owners, operators and providers to learn what they’re learning about their situations. Do what you can to be a positive force in the community during this time, because we’re all in this together.

Tags:  Business and Financials  COVID-19 

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UPDATED: What the CARES Act Means to Your Medical Aesthetic Practice

Posted By Administration, Friday, March 27, 2020
Updated: Thursday, March 26, 2020

woman holding a help sign

By Patrick O’Brien, JD, legal coordinator, American Med Spa Association

UPDATE: At 12:28 CT on Friday, March 27, the House passed the CARES Act by voice vote. It is unchanged from the version the Senate passed this last Wednesday. From here, it heads to the president’s desk to sign into law. The president has already voiced his approval of the CARES Act, so there is little question of its passage at this point. In the coming days, we will provide more details on the relief measures contained in the act and how they can help your aesthetic practice to weather this storm.

ORIGINAL POST: The Coronavirus Aid, Relief and Economic Security (CARES) Act, which is meant to provide economic relief from the hardships caused by the COVID-19 pandemic, has passed the U.S. Senate and now heads to the House of Representatives. We discussed the original version of the CARES Act in this post; however, the current version is substantially changed and expanded. This bill is moving very quickly through the legislative process and may be passed by the end of this week. As it stands now, the House has indicated that it will try to pass the bill without any changes. Here is a link to the current version of the bill. It is 880 pages long, so we have pulled out some of the key points that will be of interest to medical aesthetic practices.

Paycheck Protection Loan Program

The CARES Act makes changes to loans made under the Small Business Administration’s (SBA) 7(a) program that are issued between February 20, 2020, and June 30, 2020. Loans are made through participating commercial lenders to eligible small businesses with fewer than 500 employees. The process is designed to be easy, with relaxed documentation requirements. Here are the characteristics of loans issued under the Paycheck Protection Loan Program:

  • The loan value is 2.5 times the total average monthly employment expenses, up to a maximum of $10 million; “employment expenses” include an employee’s wages, paid leave, insurance and taxes, up to a total of $100,000.
  • The loan has an interest rate of 4% or less.
  • The loan’s term can be up to 10 years.
  • Applicants cannot participate in this program and the Economic Injury Disaster Loan program for the same purpose.
  • Applicants are eligible for loan forgiveness for approved expenses for eight weeks following loan origination.
  • SBA Disaster Loans made after January 31, 2020, can be refinanced into this program.

Loan Forgiveness

Eligible loans made under the Paycheck Protection Loan Program can have a portion of their principle forgiven for paying covered business expenses during the eight weeks following the loan issuance; covered expenses include payroll costs, mortgage and rent payments, and utility payments. The forgiven amount can be up to 100% of these covered costs. However, that total can be reduced based on the percentage of employees you retained before and after this crisis, with a provision to rehire recent employees. For example, if your covered expenses for these eight weeks were $10,000 and you had to lay off half your workforce, then your maximum forgiveness amount would be $5,000. The forgiveness amount also can be reduced by the amount equal to the amount an employee’s regular compensation were reduced if it is more than 25%.

Loan Deferral and Subsidy

Businesses in operation on February 15, 2020, who had an approved or pending SBA program loan will qualify for between six and 12 months of complete payment deferment. Loans under certain SBA loan programs—including the Advantage Pilot and Micro loan programs, but not the new Payroll Protection Loan—are for six months of subsidized payments including principle, interest and fees.

Emergency Economic Injury Disaster Loan Grants

For those applying for an SBA Economic Injury Disaster Loan, you can request an emergency advance up to $10,000 that is paid with three days of submitting your application. These funds do not need to be repaid but would reduce the total loan forgiveness amount if the loan were converted to a 7(a) loan.

Payroll Tax Credit for Employee Retention

Employers who are impacted by the pandemic would get a credit against their required employer tax payments; “impacted,” in this context, means that the businesses’ gross receipts dropped 50% or more compared with the same quarter last year. They remain eligible for this credit until their quarterly gross receipts return to 80% of the same quarter in the prior year. The credit amount is equal to 50% of the qualified employee wages, up to $10,000 per employee. If the credit exceeds the businesses’ tax payment amounts, it is treated as an overpayment and “returned” to the employer. Please note that a business is not eligible to take this credit if it also is applying for the SBA 7(a) loan.

Compensation Limits on Paid Sick Leave

The total amounts of sick leave compensation would be capped under the Families First Coronavirus Response Act. The bill would limit the amount of sick leave the employer would be required to pay to $511 per day (to a total of $5,110) if the employee is sick or subject to a quarantine order (reasons 1, 2 or 3 under the act), or $200 per day (to a total of $2,000) for employees who are caring for someone under quarantine or children displaced from school (reasons 4, 5 or 6).

Tags:  Business and Financials  COVID-19 

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No Longer Elective: States Lay Down the Law

Posted By Administration, Thursday, March 26, 2020

injection

By Patrick O’Brien, JD, legal coordinator, American Med Spa Association

Multiple authorities, from the surgeon general to the White House and the CDC, all recommend that elective surgical procedures be postponed or rescheduled in the face of the COVID-19 outbreak. Likewise, AmSpa recommends that aesthetic practices halt elective treatments and close during this crisis. These, of course, are recommendations and do not carry any legal penalties with them. However, many state and city leaders are adopting executive orders and emergency measures that do carry punishments for failing to follow them. Let’s examine a few of these orders and how they apply to aesthetic practices.

The recommendations, executive orders and emergency rules base their elective procedure stance on two main goals. The first is to limit the spread of coronavirus infections, both to patients who may be susceptible to serious complications following surgery and to medical professionals who may be called on to support more urgent medical needs; the second is to reduce the expenditure of personal protective equipment (PPE) and medical resources. Each order is worded slightly differently, so they vary somewhat in their effect, but all are trying to further these two goals.

Ohio was one of the earliest states to take action on this. Its Department of Health released an order on March 17 (available here). In it, the department requires that all non-essential or elective surgeries and procedures that use PPE not be performed. It provides a list of elements to help determine which procedures are essential versus those that can be delayed. In short, if not performing the procedure carries a risk of death or irrevocable worsening of a condition, then it is considered essential; others that can be delayed without risk to the patient must be. Much more directly the Alabama Governor Kay Ivey has ordered that all elective medical or dental procedures be delayed.

In these examples, it is clear how these edicts would apply in a medical spa setting. Practitioners should be using some form of PPE in all aesthetic medical procedures under normal circumstances. Moreover, with very few exceptions a patient is not at risk of death or harm if a medical spa treatment is delayed.

Many cities and counties also are instituting “shelter-in-place” orders, which close non-essential businesses, but typically categorize health care services as “essential” and allow them to remain open. Therefore, for a medical spa or aesthetic practice, the question is, “Am I an ‘essential business?’” Again, the answer depends on the language of the order, but they usually will prevent a medical spa from providing in-person services. If we look at Dallas County, Texas’ Stay Home Stay Safe order, we notice that it allows “essential health care operations” to continue and the delivery of those services to be uninterrupted, but elsewhere prohibits “elective medical procedures” as well. A medical spa would not be forced to close under this rule, but it would effectively be prohibited from providing any aesthetic procedures. Practitioners could still see patients—ideally using telemedicine—prescribe medications and make recommendations, but any aesthetic treatments or procedures would need to wait until this crisis has passed and these restrictions are lifted.

While many locations are now under “shelter in place” orders or prohibit non-critical medical procedures, many are not yet subject to these restrictions. Should practices in these locations voluntarily follow the recommendations and close? Our opinion is yes, but here is another aspect to consider: the standard of care. Aesthetic medical practices are held to the duty to provide safe, quality care and to inform their patients of risks, as are all other medical practices. In the case of a widespread disease that can be contiguous well before the onset of symptoms and little testing except in serious cases, many people may not even realize they are sick. Of course, it is possible to take precautions to limit the chance of infection, but there is no way to entirely remove that risk. An adverse incident or failing to appropriately address these risks may lead to professional repercussions from licensing board investigations or damage to public reputation. As such, we feel medical spas should temporarily halt in-person services.

During this time, the situation is evolving rapidly, so check frequently with our Coronavirus Resource Center and your local authorities to stay up to date. 

Tags:  Business and Financials  COVID-19  Med Spa Law 

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5 Things We Can All Do Right Now to Make Things a Little Easier

Posted By Administration, Wednesday, March 25, 2020

mountain climbers

By Alex R. Thiersch, JD, CEO of the American Med Spa Association (AmSpa)

The last two weeks have been a rollercoaster of emotions, haven’t they? I really can’t remember a time with so many ups and downs for all of us. From alternately being nervous (read: terrified) about this virus to concerned about our business to laughing hysterically at the memes forwarded to me every few minutes, I can’t get a handle on my emotions. (Seriously, there are some really clever people in this country—some of the memes I’ve read had me belly-laughing like I haven’t for a long time.)

Every week feels different. This past week has felt a little more ominous. Last week, everything was kind of new—we were working from home, contained inside our little worlds with our loved ones, almost like a slumber party. Plus, the news was bad, but still not that bad. Now, reality is setting in. The news is getting worse, and, after a full week of exactly zero revenue for all of us, our business reality is creeping in. Folks are starting to snap at one another on conference calls. Patience is wearing thin. And it’s only week two!

But every now and then I get a moment of clarity and I refocus my attention to how lucky I really am. Over the last few days I’ve been taking notes on the things that happen that draw me back to this feeling, and I’d like to share them. I’d also love for all of you to share with us the things that make you feel happy and lucky during these turbulent times. Share them with us on social… we’re in this together!

  1. Take a deep breath and recognize that we’re going to get through this. AmSpa is made up of small business owners, and it’s easy to get freaked out over what’s going on. Our businesses are or livelihoods, and many of us have spent years building them. And all of it can be taken away by a virus? It’s kind of mindboggling, really. But here’s the thing—we’re going to be okay. We’re at the very beginning of this. Just today, our friends in Washington, D.C., managed to pass a stimulus bill that will provide much relief to all of us. The preliminary language of this bill is encouraging—all small businesses will be entitled to funds to cover payroll and rent, at a minimum. That will be a huge relief, as it will allow us to stay in business and pay our people. Taking that burden off of all our minds will be a huge relief and will allow all of us to focus on the good things that are going on around us.
  2. Be understanding and graceful towards your vendors. Look, we’re all in this together. None of us are making any money. We are all feeling the pain right now. So, let’s all give each other a break on money that is owed to us. Yes, all of need the money, but the businesses that owe you money also need the money, and the businesses that you owe money to also need the money. We all need cash, and it makes no sense for anyone to hold someone else’s feet to the fire over a bill at this point. Be gracious, be patient and recognize that the person who owes you money is in the same situation, as stressed and as worried about future as you are. If we take a moment and just breathe, and recognize that we’re all in this together, it’ll make you feel better. I promise. And I should note that I’ve seen nothing but graciousness to this point—every company I’ve dealt with is working with everyone else to get through this. Even the credit card companies! Keep it up, and don’t be the first one to be a di*k.
  3. Plan, organize and communicate. Studies have shown that most stress is directly related to a feeling of lack of control. We fear what we don’t know. And in these times, we don’t know anything, so the stress and fear is at an all-time high. But science also shows that if you make a plan and do what you can to get organized, you’ll feel as if you’re getting things under control, even as the outside world continues to spin uncontrollably. So, make a plan for your business, your personal life, even your day. Cash is king right now, so work through your burn rate, step by step. (Your burn rate is how fast you’re “burning” through cash and, ultimately, how long you have until you have no cash left—if you need a fillable spreadsheet that helps with this calculation, here it is, courtesy of our friends at Skytale Group.) Then, make a list of outstanding bills and get on the phone to call your vendors. I promise, your business partners will understand (see #2 above). Make a list of things you can cut and things you can’t. The process of going through your business will make you feel better, and it will inform you of things that you’re spending money on that you don’t really need. And make sure you communicate with your team—we’re all isolated, and it’s easy to forget that your team is also stressed and cannot read your mind. Now is the time for leadership, and that requires communication.
  4. Pick. Up. The. Phone. Seriously, call someone. Anyone. There are tons of people you can call—coworkers, family, friends, enemies… frenemies, even. Ask them how they’re doing, over the phone. We have such a digital society that it’s easy to fall into the habit of communicating by email or text. But hearing other peoples’ actual voices can be refreshing. To take this a step further, have video meetings with your team and FaceTime calls with your family. Seeing other people helps. Science says that humans need interaction with other humans, so it’s worth the effort to make that connection.
  5. Focus on the good that is happening. It’s difficult to do, but the best thing to do is turn off the stupid news. Check in to get informed, but the bulk of your day can’t be spent following the bad news of the day, or you’re likely to start tearing your hair out. Right now, the news is bad. Count on it. But you know what? There are also some really amazing, inspiring, selfless things that people are doing out there. Our incredible marketing team put together this post of positivity that is really inspiring. And you know what? It’s not just bad for you—it’s bad for everyone, and there’s always someone worse off than you. So instead of dwelling on the bad, focus on the good things and what you can do for everyone else. All it takes is a little switch and your mood changes, which changes your outlook, which changes your focus, which puts you in a better mood.

None of this is easy. None of us have ever dealt with anything like this before—not even close. And there will be tough times ahead. But if you focus, plan and, most importantly, be nice to one another, it’ll make things easier for everyone else. We’ll get through this. We’re all in this together!

Tags:  Business and Financials  COVID-19  Med Spa Trends 

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Doctors Without Clinics: The Overnight Rise of Telemedicine to Combat COVID-19

Posted By Administration, Wednesday, March 25, 2020

telemedicine

By Bradford E. Adatto, Partner, ByrdAdatto

Many of you are familiar with the organization Doctors Without Borders, but very few would have ever thought of a day when doctors could no longer work in their office clinics. How do you continue to treat patients when the federal, state and local government is banning elective medicine? Many of our clients are shifting overnight to doing medical consults exclusively via telemedicine as a means to continue to treat their patients without direct contact. Countless clinics, however, have not implemented guidelines on how to implement this strategy. A good policy needs to protect the patient’s privacy, abide by the state’s telemedicine rules on the proper standard of care and comply with the prescription laws with regard to controlled substances.

The federal and state governments are passing laws and issuing exceptions to many of these rules faster than we can write about it.  Those medical clinics wishing to stay open using telemedicine need to understand the new normal.

Last week, the U.S. Office for Civil Rights (OCR), a part of the Department of Health and Human Services, issued new Notification of Enforcement Discretion for telehealth during the COVID-19. The statement basically allows providers to use less-than-perfect solutions under the security standards, including “any non-public facing remote communication product that is available to communicate with patients.” Providers who want to use these platforms can use them as long as the provider advises patient of the risks and the patient agrees to them, and the provider has taken reasonable steps to protect the patient’s privacy; this can include finding a secure location and setting the security level in the “telemedicine” software to the highest encryption and security level. As such, medical providers can work from home or another remote location via Zoom, Skype, FaceTime and other apps approved by this OCR notice and still render medical decisions for patients in less-than-perfect encryption standards. To be clear, the OCR only wants you to use apps that provide HIPAA-compliant video communication products, provided the vendor will enter into a business associate agreement. Facebook Live, Twitch, TikTok and similar video communication applications are public-facing, and as such would not be compliant.

Finally, the restrictions on rendering telemedicine across state lines also have been temporarily waived by the federal government and many state authorities. Please check with your local medical boards on what restrictions still apply.

AmSpa members receive a complimentary 20-minute Introductory Compliance Assessment with a ByrdAdatto attorney. Click here to learn how to join AmSpa today!

Bradford E. Adatto is a partner at ByrdAdatto, a national business and health care boutique law firm with offices in Dallas and Chicago. His background is in regulatory, transactional and securities law. Having worked in health care law his entire career, he has an in-depth knowledge of the “dos and don’ts” of this heavily regulated industry. Brad has worked with physicians, physician groups, and other medical service providers in developing ambulatory surgical centers, in-office and freestanding ancillary service facilities, and other medical joint ventures. He regularly counsels clients with respect to federal and state health care regulations that impact investments, transactions and contract terms, including Medicare fraud and abuse, antitrust, anti-kickback, anti-referral, and private securities laws. Adatto has been recognized as Top Rated Lawyer by the Dallas Morning News (2016) and a Best Lawyer in Dallas in health care by D Magazine (2016 & 2018-2019), selected as a Best Lawyer in America in health care (2017-2019), and was recently named a Best Lawyer in Texas (2019) and Texas Super Lawyer, published by Thompson Reuters (2019).

Tags:  ByrdAdatto  COVID-19  Med Spa Law 

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What to Do Right Now: Essential Business Strategy & Tactics During Challenging Times

Posted By Administration, Tuesday, March 24, 2020

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By Bryan Durocher, Founder & President, Durocher Enterprises

Hearing about the slowing economy and uncertainty is topic #1 in recent days. Focus on what you have control over at this volatile time. As a leader, model being calm and transparent, and avoid emotional knee-jerk reactions. Here are some strategies that provide you a baseline of information for how you can stay in action when and if it is appropriate for you:

  • Look at your finances—determine your cash flow and prioritize what you have to and can skip paying.
  • Negotiate with vendors to extend your terms and get you through. We are all in this together.
  • For your team, offer transparency and training, and be a good source of information and a leader during a crisis.
  • Keep in contact with your patients using telemedicine and video conferencing. These systems allow you to see patients for consults, preoperative visits and postoperative visits. 
  • Train on technical, recommendation and selling skills during your possible closure.
  • Put together a virtual special sales event to create cash flow now.
  • Offer advanced gift card sales and package incentives online.
  • Consider a concierge travel service.

Cash Flow

Cash flow is always a critical factor in keeping your business healthy. Right now, here’s what needs to be done. Determine what bills for goods and expenses are due each month. Of that dollar total, payroll will usually be right on top. Negotiate terms with all your vendors to either skip payments for, say, 60-90 days or reduce your monthly payment amounts. Don’t be afraid to ask—your vendors want you to succeed and stay in business. Get on top of this right away and don’t delay.

Regarding payroll, this is a tough area. Look at what you can realistically do. Be transparent and up-front with your staff. Emphasize you are all in it together. Perhaps your staff can use their PTO during a shutdown. Some of your staff could take a voluntary leave and be rehired once you reopen. Use your financial advisor as a resource for information regarding unemployment insurance filing, find out if your state has programs for rent abatement and/or mortgage relief—find out anything and everything that can help your team. They could be afraid, and it is your time to have empathy and listen with the intent to reassure them of what is possible.

Whatever changes you make, document everything. The Society for Human Resource Management is a resource that can help you through the necessary steps; click here to visit their website.

Communicating with Your Patients/Clients

Keep communication with your clients open. Be a calm presence, stay relevant and be a wellness leader. Keep the flow of information open with your website, Google business listing and social media channels.

Put an announcement banner on your home page that stands out. Have it link to a landing page with information about the up-to-date status of your business. Don’t alter your home page, as it could affect your long-term SEO.

People will be looking. Adjust the hours on your Google business page and create a post on the status of your business.

Be a calm presence on social media. Offer wellness advice that is appropriate to your business. Stay relevant to the pulse of what is happening now. This is a great time for you and your team to post content. Video your service treatments with step-by-step explanations of their benefits. You could create a private Facebook group for VIP information and learning. Put up a how-to Instagram video. Facebook and YouTube allow up to four hours of recording, while Instagram will allow for 60 minutes. You call also use Zoom or WebEx as a tool to convey non-HIPAA-compliant information.

The services you offer your clients are a part of their wellness experience. Get them thinking that your services not only help them look and feel better, but also help them to reduce stress and be able to give more to their work and the important people in their lives. On average, during a downturn in the economy, the first things to be excluded from an individual’s budget are “perceived” luxury services and products such as massages and aesthetic treatments. We want most clients to consider our services a necessity—not a luxury. However, you must realize that clients are pushing appointments out further than normal, attempting to maximize their dollar. Instead of visiting every four to five weeks, we are seeing clients return every six to eight weeks, which translates to one fewer visit per year per client. When we do the math, this can add up to a considerable drop in profitability at the end of the year, not only for the overall business, but also for the practitioners and technicians. You can counteract this with the right type of training.

Everyone is affected by the economic slowdown, so it is everyone’s responsibility to come up with solutions. Do not fall into the trap of your staff chanting, “You need to do more.” The truth is that everyone needs to do more. Everyone needs to market more. Everyone needs to network more. It needs to be a collaborative effort working toward the common goal of procuring more business for everyone. There is no magic bus of clients that will drive into your parking lot for services.

Train While You’re Closed

The uncertainty will end. Don’t lose an opportunity to teach your staff. With virtual learning, opportunities abound everywhere. We can lead virtual trainings with programs such as Zoom or WebEx. If your business is closed, use this time to enhance your staff’s skills sets. Whether it’s technical training, working on their service skill sets, or practicing their dialogues on how to recommend series, pre-booking or ask for referrals, it is a good time to keep focused on something productive. Most medical spas completely underutilize their retail sales capabilities. Training for recommending retail is more important than ever.

Suggestive Selling: Train Staff on Selling Techniques

There is a huge difference between, “Do you need any retail today?” and, “These are the products I recommend, which of them would you like to take with you today?” Suggestive selling is one aspect of merchandising that is often overlooked, yet it can make a tremendous difference in the total retail sales of a medical spa. It is proven that close to 40% of clients will say yes when asked by staff members if they wish to upgrade in size or quantity. There is a fine line between being perceived as pushy and merely suggestive, though.

The creation of simple scripts is a good way to assist your staff with suggestive selling. Choose two to three products that you wish to feature. Write out key features and unique selling points of each of the products and ask your staff to get comfortable with the language you have chosen. If you find this step challenging, your product representative is a great resource to turn to for help with descriptions and sales techniques for the featured products. Require staff members to be sure that each client receives at least one mention per visit. When clients are scheduling their next appointment and paying for their service, it is a wonderful opportunity for your staff to suggest gift cards and your packages. The “every client gets one mention” technique is a great way to boost sales of gift cards. Offer prospects $25 in retail products for every $300 they spend with you. (Don’t discount services in your packages, as it takes away profits. Use retail, which has no labor cost, as the incentive.)

Ask your product representative for all press releases and endorsements the product line has. Suggestive selling also may be accomplished simply by featuring a “product of the month” in a high visibility area. This technique is great for seasonal specials and time-sensitive products.

Cross-merchandising is imperative for your staff members to learn and master. It is a technique that is used with tremendous success by top medical spas. It is simply the art of matching products that complement each other together. Try using merchandise from different parts of the medical spa, with the intent to introduce clients to ancillary services as well as products. Displays using this tactic present a wonderful opportunity to introduce clients to services the practice offers other than those for which they usually visit. Just like its counterpart cross-marketing, cross-merchandising creates opportunities to increase sales while creating loyalty to your medical spa. It is highly effective, and is the suggestive selling technique that can offer a significant reward to your business when applied consistently.

Plan a Virtual Spring Semi-Annual Sale 2020 Online

Plan a sale or promotion online where your clients can purchase value now and use it later, when they are more comfortable. Much has changed in the last few days. We want to continue to reward our most loyal clients. Clients look forward to this sale twice a year, and we want to still make sure we can offer some sense of normalcy during these stressful times. We also know that people will want to take their minds off the stress, and self-care always helps.

Offer your 10-15 best treatments of 2020, making sure to not discount too deeply to prevent having short-term cash flow and losing money long-term. Clients will learn of the sale from your outgoing marketing efforts. Post the link for your online store so clients can browse from the comfort of anywhere. Clients can find the link on Facebook, Instagram, your website and email blasts.

Any clients who purchase either three of the same item or any other combination of three sale items will receive 10% of the purchase price in free retail. This can be any product that the provider recommends or that the client is interested in trying. Any client who qualifies for this benefit will be scheduled with a skin care consultation, preferably before the first booked service. During this visit, the client will have a skin scope and discuss their goals, and you will recommend a skin care regimen. Recommend the client two to five products, based on their needs. They will have a predetermined credit based on 10% of semi-annual sale purchases that will be on checkout tickets. You will recommend the products and remind them of their free credit they can use towards any of the products. Clients will purchase anything above their complimentary voucher.

Checkout and rules: Checkout skin care to a rep, if possible. If there is no rep for the product, discount the credit amount. Any remaining balance would be owed by the client. Vouchers must all be used at one time. No store credits will be issued for any balances.

Goals of retail:

  • Recommend skin prep kits first.
  • Fill in their missing skin care regimen, which will help maintain their goals.
  • Increase retail sales.
  • Create loyalty through the gift-with-purchase promotion.
  • Encourage future repeat sales of retail.

For a second promotion, encourage customers to purchase gift cards now for later visits and get 10% of their gift card purchase back in the form of a retail redemption towards product. As a third promotion, the client can buy any package series of treatments and receive 10% of their series purchase back in the form of a retail redemption towards product.

Series-sell Everything Possible in a Bundle

Identifying services sold in packages—such as luxury facials, body treatments, medical-grade peels and massage services—is a great way stock up the dollars in the business coffers. Selling a series has a client come in with frequency to maintain the service, and they are more likely to be loyal to a service provider or business because of the consistent service and results. You have collected the money up front, so they are committed to your business. In addition, they will tend to spend more on products and other services in subsequent visits, as they are not paying for the service after the initial payment. Do not discount series, as doing so takes away all service profits. Instead, use retail as the incentive for a series purchase. It keeps the client loyal, maintaining their service results, and again has no labor cost associated with it. For example, purchase a series package for $1,000 and receive a retail gift package worth $100 at the time of purchase. Also, purchase gift cards right now and receive 10% of their value back in complimentary retail products.

Virtual Consultations

We are sensitive that clients may not feel comfortable in public right now. Create an
appointment called a virtual consultation for all providers.

  • Online store: Clients have the option to purchase from the store or fill out a virtual consultation request.
  • Online purchases: Forward purchases to the concierge for input into the software. When you know what the client purchased, contact the client to schedule their visit. If the client qualifies for a free retail skin care consultation by purchasing three items from the sale, please book before service.
  • Virtual consultation request: If the client fills out a virtual consultation request, reply to the client and get them booked with the provider that best matches the list of their concerns. If they have multiple concerns, please specifically ask the client about concerns and match them with the correct service and provider. Verify phone numbers and tell the client they will receive a phone call from the provider at their appointment time.
  • Providers virtual consultation: Call the client during the appointment time on your schedule. Our goal is to review the client’s concerns and recommend the best treatment plan to the client. To have the best outcomes for long term benefits, clients will receive free skin care with the purchase of any three sale items. There are options with companies like TouchMD or One Touch Telehealth for these services.

Virtual visits will help protect your staff and patients from the COVAD-19 virus and comply with rules for in-person contacts. Consider providing concierge treatments at the client’s home; create an “at home on demand” list of services you can take on location when the time is right. It is a collective effort of every member of the team, especially during economically tough times. Act now to protect everyone from a smaller paycheck at the end of year. Ensure the downturn the country is facing does not affect your business negatively. Be proactive. Get creative with marketing programs, team coaching programs and special events.

Bryan Durocher is the author of Wake Up … Live the Life You Love … in Beauty, and is the founder of Essentials Spa Consulting and Durocher Enterprises. Durocher was named one of the “Top 20 People to Know in the Beauty Industry” by Global Cosmetic Industry magazine, and provides coaching, consulting, global industry trends and marketing solutions for medical spa, spa and industry professionals internationally.

Tags:  Business and Financials  COVID-19  Med Spa Trends 

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Letter from the CEO: You Can Help! Donate Your PPE

Posted By Administration, Monday, March 23, 2020

giving package

By Alex R. Thiersch, JD, CEO of the American Med Spa Association (AmSpa)

Yesterday, I was having a fairly typical conversation with my neighbor—we were both standing in our yards across the street from one another, yelling so we could be heard and occasionally delaying for a car passing between us. You know, your typical Sunday conversation during these strange times.

What struck me was something she said in passing, almost casually, during our conversation. She is an OB/GYN who specializes in high-risk pregnancies. Unable to stay home because her work is unquestionably essential—“People didn’t stop having babies,” she said—she mentioned how strange it was to have to deliver babies and care for women, sometimes under dire circumstances, without any masks, gowns or eye protection. “We aren’t allowed to wear masks or any protective equipment during deliveries,” she said. Those supplies are desperately needed elsewhere—the ER and ICU—and they can’t be spared, even though they are critical to protecting mothers and newborns.

This struck home for me immediately. Like all of you, I’ve been following the daily updates about the shortages of masks, gowns, swabs and gloves in disbelief. How could the richest, most powerful country in the world, with the most advanced health care and cutting-edge medicine, not have enough masks? But the comment from my neighbor hit home for me in a different way—it’s not just that the health care workers on the front lines of this crisis are unprotected, although that is certainly priority number one at this point, but also that the other physicians, nurses and caregivers working tirelessly to keep all the other aspects of our health care system moving have no protective equipment to prevent themselves and their patients from illness and infection. Because, regardless of the news of the day, people can’t decide to stop having babies, or to delay a cancer diagnosis, or to forgo dialysis.

The medical aesthetic industry is in a unique position. We are medical clinics and health care facilities that are sitting on the sidelines. Because we offer voluntary, non-essential aesthetic treatments, most of us have shut our doors and quarantined ourselves. (If you haven’t yet, please do—it’s important.) However, it’s likely that we have medical offices that are fully stocked with equipment. We order gloves, masks, swabs and other supplies but, right now, they are sitting unused in closets or cabinets.

It’s time for all of us to step up. Whatever medical supplies you have, they’re most likely needed elsewhere. Hospitals all over the country desperately need supplies. I’m not sure what you’ve got in your storage cabinet, but chances are, if it’s a medical supply, it’s needed by someone, somewhere.

Let’s make a difference. The American Med Spa Association (AmSpa) encourages all of you to take inventory of what you have and send as much of it as you possibly can to your local hospital. If your medical spa or aesthetic clinic has supplies but doesn’t have a local hospital in need, please log on to www.donateppe.org and donate through this site to make sure your supplies get to those who need them the most.

This is everyone’s responsibility—not just medical spas. I’d also like our cosmetic plastic surgeons and cosmetic dermatologists to do the same. (Obviously, if you are performing necessary surgery, this does not apply to you.) If you have PPE you are not using in your office, I promise there are doctors and nurses out there who need it much more than you do. With the total number of medical spas, plastic surgeons and cosmetic dermatologists in this country, we should be able to donate well over a million dollars’ worth of supplies. And that’s the goal.

We’d also like to document this moment in history, so please keep track of the value of what you’ve donated and take pictures of you making the donation so we can keep track of what we’ve done as an industry. Participating medical aesthetic practices are asked to complete the form that can be found at this link about your donation, and upload a picture of the medical supplies being shipped to your local hospital.

Along with that, those who donate are encouraged to share their efforts with AmSpa on Instagram. Take the photo of your donations mentioned above and post it on your Instagram account using the hashtag #AmSpaPPEDrive. Please tag @AmSpa_AmericanMedSpa and caption what you donated for a chance to be featured on AmSpa’s social media channels.

We’re not being asked to fly into enemy territory or to take a bullet storming a beach—we’re being asked to stay home and, if possible, donate supplies. That’s a small price to pay. Let’s do this!

Tags:  Business and Financials  COVID-19 

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