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The Keys to Private Equity in Med Spas for DSOs and MSOs

Posted By Administration, Friday, September 28, 2018

By Michael S. Byrd, JD, Partner, ByrdAdatto

In many states, only doctors can own a medical spa, unless you set up a special organizational structure to manage your practice.

Dental Service Organizations (DSOs) and Management Service Organizations (MSOs) share similar business and legal compliance characteristics. DSOs are management organizations in the business of providing all back-office business management services to dental practices. MSOs, on the other hand, provide similar business services to support medical practices.

Learn more about MSOs by reading here or by watching our webinar on the topic.

The common thread between MSOs and DSOs in the private equity world is that they tend to manage practices that operate like a retail store from a business perspective and like a health care practice from a regulatory compliance perspective. In the DSO market, this looks like branded chain of dental offices typically found in retail real estate space. Similarly, the MSO market looks like retail elective health care services, such as medical spas, weight loss centers, and IV therapy centers. In addition to the business similarities of DSOs and MSOs, the regulatory hurdles are similar for the management of dental and medical practices, and the legal solutions to these regulatory hurdles are structurally the same.

The DSO market is the mature older brother of the emerging MSO market. Tusk Partners recently with fascinating insights titled “What private equity looks for in acquiring a DSO.” The article highlights the financial condition of private equity in the DSO market, noting a strong seller’s market. The key indicator of this financial market for 2017 is a valuation multiple of around 10.5 times EBITDA. The article additionally highlighted feedback from private equity professionals on the question of what private equity looks for when evaluating a DSO business. The salient points from the feedback highlighted in this article is:

  • PE Investors are typically growth oriented, versus value oriented. It’s important to be clear that the business strategy is in alignment with private equity strategy.
  • The founders must be able to clearly articulate a vision for the next 3-5 years.
  • The founders must be able to clearly communicate the competitive advantage (secret sauce) over the competition.
  • The DSO must be compliant from a regulatory standpoint. Compliance includes the legal structure from a corporate practice perspective, as well as patient privacy and patient billing.
  • The DSO must be able to articulate a strategy to attract and keep clinicians.

Businesses in the younger and emerging MSO market would be wise to pay attention to the trends and developments in the DSO market. Private equity is coming in to the MSO market even though it is several years younger than the more developed DSO market. Clint Carnell, the CEO of The HydraFacial Company and founder and chairman of Orange Twist Brands, has a deep background in private equity funding. After discussing the legal regulatory complexities of the MSO model and the insights from the Tusk Partners article, I asked Clint what he believed to be the most important strategy in building an MSO towards private equity funding. Clint succinctly and profoundly responded “You have to keep it simple.” Clint’s response is telling, as it spotlights the business from the view of a potential private equity investor. Private equity investors must be able to clearly understand the business itself, the value proposition, and the business’s vision. If the MSO house is not in order from either a regulatory or business perspective, private equity will quickly run.

ByrdAdatto represents DSOs and MSOs in all stages and helps build and maintain compliant structures that are designed to withstand the scrutiny of private equity due diligence. If you have any questions regarding your DSO or MSO business, need assistance with corporate structure, or merger and acquisition activity, please contact ByrdAdatto. AmSpa members receive a complimentary 15-20 minute annual compliance consultation call.

Michael S. Byrd , JD, is a partner with the law firm of ByrdAdatto. With his background as both a litigator and transactional attorney, Michael brings a comprehensive perspective to business and health care issues. He has been named to Texas Rising Stars and Texas Super Lawyers, published by Thompson Reuters, for multiple years (2009-2016) and recognized as a Best Lawyer in Dallas by D Magazine (2013, 2016).

Tags:  Business and Financials  Med Spa Ownership 

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An Exit Strategy: When the Physician Leaves a Med Spa

Posted By Administration, Thursday, September 27, 2018

By Renee E. Coover, JD, ByrdAdatto

As medical spas increase in number and size throughout the country, it is not uncommon for physicians to leave one med spa to join another or open a new med spa. When a physician leaves, many questions arise: is the med spa required to notify patients of the physician’s departure? Can the physician contact the patients to announce he/she is leaving the med spa? Who should take possession of the patient’s medical records? These questions can be easily answered if the departing physician and the med spa negotiate an exit strategy and even execute a “separation agreement” to clarify the terms of the physician’s departure. 

“The goal of any separation plan should be to remove the emotional issues, which often are intertwined in a practice breakup or departure, and concentrate on the fundamental business elements to assist a smooth transition,” says Brad Adatto, JD, partner at the law firm ByrdAdatto. Adatto lists ten items to help medical spa practices start thinking about shaping their separation plans including reimbursement, liability, debt, and more.

One of the questions patients frequently ask is how to find the physician once he or she has left the med spa. The med spa is required to provide that information to patients. According to the American Medical Association Code of Medical Ethics, the “patients of a physician who leaves a group practice should be notified that the physician is leaving … and should also be informed of the physician’s new address.”  It is unethical for the med spa to withhold this information upon request of a patient of the departing physician. 

But what if the departing physician wants to contact patients to advise them of the departure? Can the departing physician get in trouble for “soliciting” patients from the med spa? This depends on whether the departing physician has signed an agreement with the med spa that includes a non-solicitation clause. In most cases, the physician will be required to sign a Non-Solicitation Agreement upon employment stating that he or she will not solicit the patients of the practice for his/her own benefit or induce patients to cancel their relationship with the practice and follow the departing physician to a new practice. If the physician contacts patients, even just to announce the departure, this could be construed as a method to solicit those patients and would constitute a breach of the Agreement. This holds true in the med spa setting, where the same rules and regulations of the medical practice apply. To avoid breaching the non-solicitation agreement, the departing physician should discuss an exit strategy with the med spa to determine how patients will be notified of the departure and put the agreement in writing. Read more about restrictive covenants in your med spa contracts here.

Another question that frequently arises when a physician leaves is what to do with patients’ medical records. A patient’s records may be necessary in the future for medical care, employment, insurance, or even litigation. When the physician leaves, the med spa retains the patient’s records in most cases but this should also be spelled out in a separation agreement with the departing physician to avoid confusion. 

For a departing physician, there are many key issues to resolve before leaving the med spa. In addition to the questions discussed herein, there are also questions of insurance coverage, severance pay, return of equipment or property and other financial issues. Having a separation agreement in place prior to the physician’s departure can save both the physician and the med spa time and money. The separation agreement should detail the terms of the physician’s departure and outline the answers to the important questions that affect the terms of leave. 

If you have questions regarding the proper exit strategy for physicians in med spas, it is important to consult with an attorney who can advise you on the myriad issues and craft an exit strategy. 

Renee E. Coover, JD, is an associate with ByrdAdatto, a law firm focusing on business, healthcare, and aesthetics. She has a unique background, blending litigation with healthcare law. A former litigator in high-stakes employment cases, Renee has extensive experience with counseling and representing businesses in employment matters, policies, and contract disputes, and defending business owners in state and federal trials. She has also served as General Counsel for the American Med Spa Association, advising health care professionals on regulatory and legal issues governing the medical spa industry.

 

Tags:  Business and Financials  Med Spa Ownership 

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Med Spa Law Terms You Need to Know

Posted By Kate Harper, Wednesday, September 26, 2018
Updated: Thursday, September 27, 2018

By Renee E. Coover, JD, ByrdAdatto

As revenues in the medical spa industry increase, so does the enforcement of medical spa regulations. The 2017 Medical Spa State of the Industry Report calculated that the industry was valued at nearly $4 billion with an annual growth trajectory of 8% through 2022. Legally speaking the report found that 37% of practices were not performing good faith exams, 31% were paying commission on medical treatments, and 10% were even relying on laser techs or aestheticians to perform injectable treatments. An expanding industry can present increasing risk for medical spa owners and operators. As the number of medical spas has increased, so has the number of lawsuits filed against them, and because there are few specific rules and regulations governing the administration of nonsurgical cosmetic procedures, there are limited opportunities for training and certification.

In order to protect yourself and your business from exposure to problems such as these, you should familiarize yourself with the nature of the industry and some issues that are commonly faced by medical spa owners and operators. The specific rules and regulations that govern medical spas may be a bit difficult to pin down, but ignorance is never an acceptable excuse.

The industry

The American Medical Spa Association (AmSpa) defines a medical spa as follows:

“Medical spas operate under the full-time supervision of a licensed medical professional in a spa-like setting. When visiting a medical spa, patients can be pampered with traditional spa services but also have the option of getting medical services like Botox, laser hair removal and medical-grade skin therapies. The medical professionals of the med spa are licensed, educated and trained in the medical procedures and treatments provided to ensure the highest level of care for every patient. State regulations differ as to what type of ‘medical professional’ can be an owner or medical director of a medical spa, so we recommend you contact your local attorney for your state’s laws and regulations.”

The blanket term “medical spa” covers a range of establishments, including laser clinics, free-standing medical spas and Botox bars. In addition to traditional storefronts, these businesses are turning up in hotels, shopping malls and airports as more and more physicians seek to supplement their incomes by opening medical spas.  

Despite this growth, the industry’s rules and regulations are somewhat nebulous. However, there are a few core principles that conscientious medical spa owner and operators can observe to keep themselves out of legal trouble.

Medical spas are regulated as medical facilities
Laws governing the industry vary from state to state 

A medical spa can be a profitable business venture, but it can also attract legal problems that can stifle its earning power. Following are the top legal issues that medical spa owners and operators commonly encounter:

The Legend of the “Medical Aesthetician”

Aestheticians are the fastest-growing segment of the medical spa industry. In nearly every state, aestheticians are regulated as an individual profession. However, you should be wary of anyone who refers to herself as a “medical aesthetician.” Simply using the term is enough to trigger an investigation in many states.

Why? Because in most states, aestheticians cannot perform medical procedures, and suggesting otherwise is inherently misleading. The proper term is “aesthetician in a medical spa.” Check your spa’s business cards, website and marketing materials to make sure that the term “medical aesthetician” is nowhere to be found. You may be inviting far more scrutiny than you realize simply by using an improper title. Read more on misleading med spa titles here.

The Commission Conundrum

Offering employees commissions for bringing in business may seem like a great way to incentivize performance, but in most states, it is illegal. Why? Because in states that recognize the Corporate Practice of Medicine, all medical fees generated by a medical spa must be paid only to a physician or a physician-owned corporation. Splitting fees from medical procedures with a nonmedical employee is known as “fee-splitting,” and it is prohibited by law. If you are taking or giving a commission in a state that observes The Corporate Practice of Medicine Doctrine you are exposing both yourself and your medical spa to disciplinary action.

“If a medical spa is found to have done this, the physician faces suspension or revocation of his or her license, as well as a significant fine,” says Alex Thiersch, JD, founder and director of AmSpa. “The employee who receives the commission payment also faces a significant fine, so all involved should make sure that this is avoided. States are cracking down on fee-splitting, so there’s no better time than now to make sure your house is in order.”

Instead of offering commissions, medical spa owners and operators should enact a preset bonus structure to reward employees. That way, they can show their appreciation without putting themselves in regulatory crosshairs. There are two compensation packages available in the AmSpa store (among other business-building tools) that offer ways for you to incentivize your stay while staying within the bounds of the law.

Gift Cards

You may also wish to reward employees or even patients who bring in business with gift cards, but doing so in a medical setting such as a medical spa can represent a violation of state and federal anti-kickback laws, which prohibit physicians from paying for referrals. These laws are designed to ensure that physicians cannot simply buy patient referrals. 

“Because gift cards have a cash value attached to them, they can be viewed as representing a kickback and, therefore, expose the practice to legal action,” writes Thiersch

Supervision and delegation

Medical spa physicians are busy people. For example, in many states, a physician is required to conduct an in-person initial consultation and exam on every patient who intends to undergo a medical procedure, including laser treatments and injectables. Obviously, this would require physicians to spend a large amount of time conducting these exams and far less time performing more lucrative procedures. Luckily, this task can often be delegated to mid-level practitioners—nurse practitioners or physician assistants, for example—since it is within their scope of practice.

Generally, any patient care task at a medical spa can be delegated to whoever the physician wants, provided that person has been properly trained, is experienced and is properly supervised. For example, laser technicians can perform laser treatments, because those tasks fall within their scope of practice. Aestheticians, on the other hand, typically cannot perform medical procedures, so they cannot be delegated such tasks. Make sure that your medical spa complies with these standards. Read more about supervision and delegation here.

Ownership

In states that enforce the Corporate Practice of Medicine Doctrine, only licensed physicians or physician-owned corporations may own a medical corporation. By definition, medical spas are medical corporations and thus, in states that observe the corporate practice of medicine, only physicians are legally allowed to own medical spas. 

Although this is unfortunate for aestheticians who would like to try to cash in on this growing industry at an ownership level, there are other ways for aestheticians to get a piece of the pie. Aestheticians typically can own the management company that administrates the day-to-day operations—billing, purchasing supplies and equipment, leasing space, providing support services, etc.—of the medical spa. Such a company cannot share in the profits of the medical spa, but it can be paid a fee by the medical corporation. Read more about non-physician medical spa ownership structure here.

You can attempt to find more information about topics such as these and your specific situation by conducting Internet searches for terms such as “medical practice act,” “[your state] board of regulation” and “aesthetician act.” However, such information is difficult to find, and there is little of it available in many states. AmSpa members can check their state’s medical aesthetic legal summary or take advantage of their annual complimentary compliance consultation call with ByrdAdatto.

Attend an AmSpa Medical Spa & Aesthetic Boot Camp for a deeper dive into medical spa legal topics, and to learn strategies to make your practice efficient and profitable.

Renee E. Coover, JD, is an associate with ByrdAdatto, a law firm focusing on business, healthcare, and aesthetics. She has a unique background, blending litigation with healthcare law. A former litigator in high-stakes employment cases, Renee has extensive experience with counseling and representing businesses in employment matters, policies, and contract disputes, and defending business owners in state and federal trials. She has also served as General Counsel for the American Med Spa Association, advising health care professionals on regulatory and legal issues governing the medical spa industry.

Tags:  Business and Financials  Med Spa Law  Med Spa Ownership 

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Putting It in Perspective

Posted By Administration, Tuesday, September 25, 2018

By Alex Thiersch, JD, founder and director of the American Med Spa Association

Every now and then, business owners should take stock of where they are in the world. What entrepreneurs do is not super complicated—they’re not curing cancer or negotiating for world peace. Medical spa owners do make people’s lives better through the use of esthetic medicine, granted, but it’s important for their own sanity that they put their business lives into perspective so that they can properly evaluate where they are and where they’re going.

Anyone who knows me knows that I am a graduate of the University of Iowa, and recently I traveled to Iowa City to watch a Hawkeyes football game. A fairly new tradition was established at Iowa games, and being a part of it live moved me a great deal. In 2017, the new University of Iowa Children’s Hospital building opened right next to Kinnick Stadium, where the Hawkeyes play football. The hospital is a tall building, and from the upper floors you can see right into the stadium. On game day, a number of the kids in the hospital go up to the top floor’s Press Box Café to watch the action; after the first quarter, everyone in the stadium—the fans, the players on both teams, and the referees—look up to the hospital and wave at the kids, and the kids wave back.

 

These kids are dealing with conditions and diseases that most of us can’t even begin to imagine. What they’re going through and what their families are going through is truly beyond what most of us can comprehend. The courage that these kids show is absolutely amazing.


When the wave happens, there’s not a dry eye in the house. Actually being at Kinnick Stadium and taking part in it is an extremely emotional experience, as these people who are going through things that are much bigger than a silly football game.

Every now and then, it’s very helpful to experience something like this. As business owners, you need to understand what you’re doing in the context of the world. When you’ve got both feet on the ground, it allows you to make better decisions. Managing employees, entering into deals, spending money, paying yourself, paying other people, and dealing with disputes and competition can feel overwhelming, and it can take over your life—believe me, I know. But when you see something like the Iowa wave and you think about what the kids at the children’s hospital are going through, you get this overwhelming sense of smallness that tells us that the things that are stressing us out in our everyday lives and with our businesses are not all that important.

Travel to a foreign country to see how people outside your culture live. Volunteer at a hospital or a dog rescue to find out what others who are less fortunate are going through. You may be surprised by how trivial the things we think are important seem, and getting some perspective will ultimately make you a better business owner and a better person.

The next time you’re struggling and feeling stressed out, come back to this page and watch the video again. Is your problem really that important? Spoiler alert: It’s probably not.

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When Do You Need a Medical Spa Business Attorney?

Posted By Administration, Friday, September 21, 2018

By Michael S. Byrd, Partner, ByrdAdatto

Compliance is cool, but do you have a compliance plan? Are you aware of any state laws that could affect your med spa ownership structure? A common problem among clients is the struggle with this common question: When do you need to hire a business attorney? Consistent with the adage “an ounce of prevention,” our most successful business clients follow the 5/50 rule.

The 5/50 rule is actually a choice we present to our clients when this very question is posed. The choice is whether the client would like to pay $5 now to proactively structure their business, set up compliance protocols, or address legal issues in their business. The alternative choice is to do nothing now and pay $50 to clean up the mess later. Though admittedly we should adjust the rule to realistic dollar comparisons, the 5/50 ratio is realistic. In making the choice more personal by drawing an analogy to one’s personal health, we ask our clients whether they would rather stick to an annual wellness treatment plan and pay the associated costs or go to the doctor and react to a stage 4 cancer diagnosis.

Our clients often then ask how to know whether they are properly using legal counsel to guide their business. A great litmus test is to look at budget and spending for legal counsel for the business. If a business has budgeted or spent under $12,000 in an uneventful year for legal fees, the business is not utilizing legal counsel proactively. Most on-going businesses spend between $18,000-$30,000 per year when using counsel to advise and proactively address the legal needs of the business. Smaller businesses or single-owner physician practices may spend less, but still be in the $12,000 range on the low end.

The first step to change how and when legal counsel is used is to shift thinking in budgeting and shift thinking on utilization. Good attorneys think strategically and creatively and can be a great confidante for new business ideas or issues.  Start calling your business attorney as a sounding board to work through these ideas and issues.  It does not have to be lonely at the top.

ByrdAdatto has created a platform to ease this transition. Specifically, our Access+ monthly retainer program creates a set monthly fee for a defined scope of work suitable for the typical needs of a business. The key to this program is unlimited access by phone and email to the attorneys at ByrdAdatto. The hope is that this will incentivize proactive communication with us to help keep the business on the 5 side of the 5/50 rule.

For more ways to build and run your medical spa practice legally and profitably attend an AmSpa Medical Spa & Aesthetic Boot Camp and be the next med spa success story.

Michael S. Byrd , JD, is a partner with the law firm of ByrdAdatto. With his background as both a litigator and transactional attorney, Michael brings a comprehensive perspective to business and health care issues. He has been named to Texas Rising Stars and Texas Super Lawyers, published by Thompson Reuters, for multiple years (2009-2016) and recognized as a Best Lawyer in Dallas by D Magazine (2013, 2016).

 

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  ByrdAdatto  Med Spa Law 

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Physician Liability in Med Spas

Posted By Administration, Thursday, September 20, 2018

By Renee Elise Coover, JD, ByrdAdatto

Physicians in the medical spa industry are lured by the lucrative income and flexible nature of med spa ownership but as the popularity of this business model increases, so does the risk for liability. 

The number of med spas in this country is at a record high. Dermatologists, plastic and cosmetic surgeons are opening med spas or adding med spa services to existing practices as the demand for non-invasive cosmetic procedures rapidly grows. Additionally, non-core physicians, mid-level practitioners, and entrepreneurs are beginning to outpace core doctors in the medical spa space, according to the 2017 Medical Spa State of the Industry Report

Though med spas offer non-invasive and fairly simple medical treatments like Botox and laser hair removal, these procedures carry the same risk of litigation as any other medical procedure. Due to the aesthetic nature of the treatments and spa-like setting where most treatments are performed, there is a public perception that med spa procedures are risk-free. This misconception has contributed, in part, to the recent rise in litigation, putting med spas in the spotlight for all the wrong reasons. 

Physicians now must be especially cautious when signing on as a “medical director” of a med spa, offering med spa-like treatments or opening a med spa of their own. As the saying goes, ignorance is not an excuse; but for many physicians, ignorance of the law can also cost them their license.

There are several common patient allegations that put physicians at risk of losing their medical license. Lawsuits are often filed by patients due to allegations of lack of supervision of medical treatments, inadequately trained med spa personnel, less than optimal results, and lack of informed patient consent. 

For more information about medical malpractice lawsuits listen to the recent episode of AmSpa’s Medical Spa Insider podcast with patient advocate law firm Sukhman|Yagoda.

 

Perhaps the most problematic issue that most patients are not even aware of is improper ownership of the med spa. In many states med spas must be physician-owned in accordance with that state’s medical practice rules, but many physicians either do not know the laws or they are trying to get around them. If a physician signs on as a “medical director” of a medical spa but has no ownership and no supervision of the medical procedures, the med spa will be charged with the unauthorized practice of medicine in several states and the physician could lose his or her license.

Non-physicians interested in participating in medical spa ownership should click here to learn about MSO ownership structures.

In Illinois, the Department of Professional Regulation has put med spas on their radar and in the past few years, hundreds of physicians have been fined, suspended or lost their licenses due to allegations of improper ownership or lack of supervision in the med spa setting. 

Physicians must be very cautious when opening a med spa or offering med spa services as part of an existing practice.  To reduce the risk of liability, physicians should educate themselves and their staff regarding written protocols, relevant laws and regulations for their particular state, legal and regulatory issues associated with med spas, adequate supervision and proper delegation of medical procedures, and risk management

AmSpa members can view the legal summary of medical aesthetic regulations or schedule their complimentary annual 20-minute consultation call with an attorney from ByrdAdatto.

For more guidelines on how to open and run a legally compliant and sustainably profitable medical spa practice attend one of AmSpa’s Medical Spa & Aesthetic Boot Camps

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Med Spa Law  Med Spa Ownership 

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Effectively Marketing Your Med Spa Practice

Posted By Administration, Wednesday, September 19, 2018

By Bryan Durocher, Founder and President of Durocher Enterprises

Marketing and advertising techniques for medical spas are key to bringing new patients into your practice. Since med spas are medical practices there are specific compliance concerns regarding truth in advertising, social media marketing, and your website that you need to know. Once your legal bases are covered, though, there’s still the business of getting patients into your doors. Continue reading to learn the keys to creating your med spa marketing plan.

The Web 24/7 Shopping – Are You Waking Up with Money in Your Inbox Every Morning?

Your website IS your first impression! Is it easy to navigate and can your customer or prospect easily drill down to what they are most likely to be interested in? Almost all small businesses use their own website to motivate consumers. 

We use WooCommerce and their e-commerce platform for our clients when designing in WordPress. It is a plugin that allows you to sell anything, beautifully, and it is built to integrate seamlessly with WordPress.

A typical consumer will visit your site 5-7 times before making a point of contact. If they are looking to buy a product make it easy for them. 

Think like Amazon! Why did they develop the “One Click” option? They knew people were leaving millions of dollars in their shopping carts and not coming back. Whether it’s a move of the mouse or a call to action icon or incentive, have something in place to not to lose the sale. 

Make sure your site is Mobile responsive! Mobile searches now exceed the desktop. Consumers want all the functionality on their phone just like in their home or office. 

Social Media and Cashing In

Companies are on trend to spend over 20% of their advertising budget on social media in the next few years. It’s no mystery that social media is a popular way to promote offerings.

Facebook now has 1.6 billion users and a vast number only on mobile. 66% of all shares on “i” devices are delivered via Facebook. Users on this platform are more likely to have completed college or have advanced degrees than any other social media platform, according the Pew Research, and are more likely to have higher incomes.

Pinterest gets the dollars in. Pinterest allows businesses to create pages aimed at promoting their businesses online. Such pages can serve as a “virtual storefront”. In one case study of a fashion website, users visiting from Pinterest spent $180 compared with $85 spent from users coming from Facebook. These users spent less time on the company’s website, choosing instead to browse from the company’s pinboard. People may be more attracted to pins of products and images than of people.

Have a YouTube channel and have videos on your own site. Almost 50% of online consumers look for a video of a product before visiting a store, according to digital marketing platform Hubspot, and video drives a 157% increase in organic traffic from search engines.

Are you using Instagram to buy the items pictured with the tap of a finger? It is a terrific platform for building your brand. Mobile shopping takes a few clicks, but the only thing you have to do is “heart” the photo. 

Vogue is using a platform called LIKEtoKnow:IT, a RewardStyle offshoot for Instagram, that shows users where to purchase the outfit or item they “hearted” as soon as you sign up with the platform. In the past two years since launch, LikeToKnow:IT has generated more than $100 million in revenue, with 1.5 million users subscribed to the system and more than 1,000 LTKI posts created every day. Though RewardStyle has been operating under the radar, it has grown to generate more than $1 billion in sales for its 4,000 retailers and 575,000 brands worldwide since launching in 2011.

The Reviews are In!

You don’t have to be number one organically on the page to attract the most attention. Have five star reviews show up on your Google My Business page which in turn shows up next to your Google search listing and even though you may rank number 4 for a term you will be your prospective customer’s 1st choice!

It’s impossible to overstate the importance of collecting testimonials and reviews from your patients, with companies like Demandforce making it easy to get feedback from your customers to use as a marketing tool. Be mindful though as Google likes original content and you should have your own reviews on your site and not a link or duplicated reviews from somewhere else. 

Online directories and review sites are also popular, with potential patients using portals like RealSelf to gather information on treatments and providers before making their purchasing decisions.

Community Connection

83 percent of U.S. consumers prefer dealing with human beings over digital channels to solve customer services issues, according to new research from Accenture (NYSE: ACN). 

The report also found that 52% of consumers have switched provider in the past year due to poor customer service, with banks, retailers, and cable and satellite television providers being the worst offenders. This is striking because new patient acquisition can cost 3-5 times as much as current patient retention, and in the U.S., the estimated cost of customers switching due to poor service is $1.6 trillion. 

An increasing number of consumers are seeking premium products and services with a connection to a group/community to discuss the information, uses, and satisfaction around them. People want to feel a sense of community and be connected to your brand. Facebook is great platform for connection, and a forum or comments section on your website creates a place for your customers to ask questions, post reviews and be part of your community.

Forget the Competition

“You compete with Your Client’s Lifestyle Choices.” Many times it’s not the guy down the street you have to worry about. It’s about convincing your customer to choose your service to bring them personal happiness and satisfaction over a vacation or other lifestyle investment.

Selling Points Matter

What are your USPs? It’s your “Unique” approach or offerings of products and services. They can be simpler than you think. Do you have late hours for busy working professionals? Do you have ample and available parking so your clients don’t have to drive around for 30 minutes like a vulture eyeing for the elusive parking spot? Do you customize a unique experience just for them? Perhaps you are the only one to retail a certain product in your geographic zone. These are selling points and should be highlighted in all of your detailed marketing materials.

It’s all About the Bennies

People only buy for two reasons: You are offering a solution to their problem or you are providing the opportunity for good feelings. If it isn’t one of these they are not going to buy. 

What are your business’ features and benefits? Remember the features and sell by the benefits!

Loyalty rewards programs are used by some of the most successful businesses including GNC, American Airlines, and others. We do not have to reinvent the wheel when it comes to these programs. Offer clients acknowledgement and value added incentives for being your best clients and they are more likely to keep doing business with you.

VIP Programs not only create client loyalty they can be an excellent source of cash flow. Gift card companies can custom make VIP cards with your business name and logo which you then can retail to your clients.

Why Clients Consider Your Products or Services

Why are clients considering you? Is it Ageing, A Self Esteem Boost, A Special Occasion, Lifestyle Change, or Work Related? Key in to their need and plan a strategy with them to win. Include the timeline and steps it will take to get them to their finish line. This is also very helpful if they have their own deadline date. Be their coach!

Communication Fast or Slow? You Will Market Better by Understanding Who You Know

One size fits all communication doesn’t work! Some people buy into the latest products and services immediately others take their time to see the results from the early adopters. You need to know how to communicate effectively to your potential consumer to close the deal.

Have you ever talked with a friend, client, co-worker, or your boss and felt what you were saying was going right over their heads? You are not alone. Some of our biggest frustrations communicating with others is not being heard correctly or misinterpreting someone else’s message. This is the classic example of relating vs. relatedness, which means moving from simply observing someone’s communication to truly walking beside them and understanding their perspective.

Being an effective communicator takes more than just listening. We have to listen contextually and hear between the lines of our communication partner to understand where they are coming from. This can be a great challenge unless we know what to look for.

It’s about people, communication and the four natural styles. When we understand and recognize another person’s natural style of communicating, we can mirror their style and produce a more positive result, avoiding the barriers that breakdown communication, cause frustration, and take away from your personal and professional quality of life.

Consultation Closer

Tell the client what to expect. If there isn’t a magic wand handy give them the idea of the real results they can achieve. Provide before and after and or testimonials to show your prospective client all the happy people who have enjoyed the results of what you have provided.

Quote the investment and be confident about it! People with a lack of confidence or people who truly don’t believe in your products or services don’t close sales! If your staff member thinks it’s too expensive for example they are going to “mind your client’s wallets” and not make a recommendation in the first place. 

All team members need to believe in the quality and experience of your service and products and that they enhance your client’s lifestyle. Provide a lot of training and feedback with this aspect of your business. Spot check with secret shoppers and record calls with programs like CallHub, RingCentral, InContact. Follow up! It may take more than four follow ups via phone, mail, or e-mail before a client makes a buying decision.

Let’s review how you can take your business to the next level:

  1. Create or tweak your website so it works for the user
  2. Establish your presence on social media because that is where you customers are talking about you
  3. Get your reviews on your Google My Business page so they show up in search results
  4. Use social media and your website to create an interactive community for your present and future customers
  5. Position your services and products as a lifestyle investment
  6. Write a USP (unique selling proposition) that all your staff knows and when anyone asks why your services and products, the USP is the official answer
  7. When writing your USP, mention the features but put the focus on the benefits
  8. Identify your customers by their needs and cater to them
  9. Learn your communication style and how to communicate more effectively with clients and staff
  10. Train everyone to sell everything

For more information on systems and best-practices to build your medical spa profitably and legally, attend one of AmSpa’s Medical Spa & Aesthetic Boot Camps.

Bryan Durocher is the author of Wakeup 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. He has published many articles and has provided business education internationally at a variety of national and international industry events including AmSpa’s Medical Spa & Aesthetic Boot Camps and The Medical Spa Show.

 

Tags:  Business and Financials  Med Spa Ownership 

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Tennessee Law Aims to Make Medical Spas Transparent

Posted By Administration, Tuesday, September 18, 2018

By Alex Thiersch, Founder and Director of the American Med Spa Association (AmSpa)

Tennessee medical spas are, for the most part, governed by laws that are very similar to the laws that regulate such practices in other states. (AmSpa members can check their medical aesthetic legal summary to find the laws governing their practice.) However, as part of a bill that was passed in 2015, Tennessee has taken the extremely unusual added step of defining “medical spa”. 

The Definition

According to the law, which can be read here, a medical spa is “any entity, however named or organized, which offers or performs ‘cosmetic medical services.’” The law also requires all medical spas, and medical spa medical directors, to register with the state’s health professional boards. Lawmakers hope that this regulation will help practitioners in the Volunteer State become more transparent.

Registration

For example, if you are the medical director or supervising physician of a medical spa in Tennessee, you are required to fill out a form to register with the state. Likewise, if you are running a medical facility that offers cosmetic medical services primarily, you must register with the state of Tennessee.

Other requirements in the law lay out what must be disclosed in this registration, and in the practice’s advertising. For example, if the medical director is not board-certified as a plastic surgeon or a dermatologist, that fact must be divulged. This is a laudable step, as it ensures the public has a significant amount of information available to it. It tells consumers right up front that a practice is a medical spa, and it allows them to know, in no uncertain terms, which doctors are affiliated with the practice. Click here to read about general best practices to make sure your medical spa advertising is legally compliant.

Treatments

Aside from the registry, Tennessee’s regulations are fairly similar to those of other states, in that some are very specific and can be defined narrowly, while others are more vague and present some grey areas. Generally speaking, though, all treatments that are offered at a typical medical spa—light-emitting devices, laser treatments, Botox, etc.—are considered to be medical treatments. Click here to read more about medical vs non-medical treatments in med spas.

Delegation

Tennessee has a fairly broad, yet restrictive delegation statute, which appears to say that a physician is authorized to delegate treatments only to LPNs, RNs, NPs, PAs, and, oddly enough, pharmacists. However, this statute does not provide any direction when it comes to delegation to unlicensed individuals. Therefore, it must be assumed that in Tennessee, you must be a licensed practitioner to fire a laser, for example. This is unlike similar delegation statutes in other states, such as Texas and Illinois, which allow physicians to essentially delegate to whoever they want, provided that person is operating within his or her scope of practice. Click here to see AmSpa’s webinar on the basics of medical spa delegation, free to AmSpa Plus members.

Ownership

Tennessee does not allow anyone other than a physician to own a medical spa, although in some instances, PAs and NPs can own practices and can enter into contracts with physicians. If you are a PA or NP who wishes to look into medical spa ownership, you should reach out to ByrdAdatto to discuss how to structure it. A consultation is free to AmSpa members. Of course, an MSO is a possible solution that permits a certain amount of ownership to a non-physician, but as we don’t want anyone to be a test case, the prudent and conservative approach in Tennessee is to make sure a physician owns the facility.

See the Tennessee medical aesthetic legal summary for more information about laws governing medical spa practices in the Volunteer State.

We’ll be discussing these regulations and many others at our Medical Spa & Aesthetic Boot Camp at the Doubletree Nashville Downtown in Nashville on Oct. 15 and 16. Join us there to learn all about how to run a compliant, successful medical spa in Tennessee and throughout the country. Click here to learn more and register, and click here to see the full schedule of Boot Camp dates.

 

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Med Spa Law 

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CareCredit Establishes New Partnership with American Med Spa Association to Help Drive Growth Among Spa Providers

Posted By Administration, Monday, September 17, 2018

Sponsored Content: CareCredit

CareCredit has partnered with the American Med Spa Association to help spa and med spa industry professionals bring the benefits of CareCredit to their practices. Providers can now offer clients access to more treatments and services while also expanding their potential client base to CareCredit’s 11 million cardholders. Participating spas and med spas will also become a part of the CareCredit network of qualified providers, which receives more than 850,000 searches per month.

The partnership was developed in conjunction with CareCredit’s recent expansion into the day and medical spa markets—helping spa providers drive growth by providing an additional payment option for consumers. Day and medical spas are an attractive growth segment for CareCredit. According to the Global Wellness Institute Global Economy Monitor, wellness is a growing trend showing no sign of slowing down, having become a $3.4 trillion-dollar global industry as of January 2017. Over the next five years, the medical spa market opportunity is expected to grow at a rate of 8% year over year through 2022.  

Working with more than 200,000 providers across a broad range of specialties including medical care, beauty, dental and veterinary services, CareCredit helps people care for themselves and focus on their overall wellbeing, while also helping small business owners offer more payment options.  In turn, small business owners can enjoy peace of mind while using CareCredit to grow their business and clientele.

All AmSpa Members receive 20% off merchant fees on purchases over $200. Click here to learn more about CareCredit.

 

Tags:  Business and Financials  Sponsored Content 

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Connecticut Allows Private Cause of Action for HIPAA Violations

Posted By Administration, Friday, September 14, 2018

Jay Reyero, JD, Partner, ByrdAdatto

As a medical facility, any med spa must be HIPAA compliant. While HIPAA does not contain a rule or regulation providing an individual a remedy for a breach nor are violations of HIPAA a specific cause of action, HIPAA is increasingly being accepted as the standard of care with respect to handling confidential patient information. 

In a recent Supreme Court decision, Connecticut joined the list of other states recognizing a private cause of action against health care providers for HIPAA violations.

In the case, a healthcare provider received a subpoena requesting production of all the medical records of one of its patient involved in a paternity suit. In response to the subpoena the healthcare provider mailed a copy of the medical records to the court. As a result, the other party of the paternity suit obtained access to the medical records and began harassing the patient. The patient sued on multiple negligence counts and breach of contract.

In its opinion, the Connecticut Supreme Court concluded that “a duty of confidentiality arises from the physician-patient relationship and that unauthorized disclosure of confidential information obtained in the course of that relationship gives rise to a cause of action sounding in tort against the health care provider, unless the disclosure is otherwise allowed by law.” To determine whether disclosure was allowed by law, the Supreme Court pointed to the requirements under HIPAA for responding to a subpoena because:

“to the extent it has become the common practice for Connecticut health care providers to follow the procedures required under HIPAA in rendering services to their patients, HIPAA and its implementing regulations may be utilized to inform the standard of care applicable to such claims arising from allegations of negligence in the disclosure of patients’ medical records pursuant to a subpoena.”

While most healthcare providers think of HIPAA as only an enforcement tool utilized by the Federal Government, this case further demonstrates the increasing use of HIPAA as the standard of care when it comes to common-law causes of action. Regardless of whether HIPAA is applicable to a particular healthcare provider, all healthcare providers need to be cognizant of its rules and regulations, as they may be held to such standards and rules. 

HIPAA isn’t the only standard that could come into play as typically there are other standards such as state law, licensing board rules, and ethical rules. Healthcare providers would be wise to reevaluate their policies and procedures and ensure they are in line with the applicable rules and standards to ensure the proper handling of confidential patient information within their organization. AmSpa members can check their state’s medical aesthetic legal summary to find the laws governing their practice.

For more information on patient privacy requirements in medical spas sign up for AmSpa’s live webinar on the topic, free to AmSpa members.

Jay Reyero, JD, is a partner at the business, healthcare, and aesthetic law firm of ByrdAdatto. He has a background as both a litigator and transactional attorney, bringing a unique and balanced perspective to the firm’s clients. His health care and regulatory expertise involves the counseling and advising of physicians, physician groups, other medical service providers and non-professionals. Specific areas of expertise include Federal and State health care regulations and how they impact investments, transactions and various contractual arrangements, particularly in the areas of Federal and State anti-referral, anti-kickback and HIPAA compliance.

 

Tags:  ByrdAdatto  Med Spa Law 

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