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How Core Doctors Can Cash In on Medical Spas

Posted By Administration, Wednesday, May 15, 2019

core doctors

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

The medical aesthetic industry continues to boom, and core doctors—plastic surgeons, facial plastic surgeons, oculoplastic surgeons, and cosmetic dermatologists—would seem to be set to profit in this space. As physicians, they are allowed to own medical spas, and they can ideally not only profit from the medical spas themselves, but also use them to direct business to their surgical practices. After all, medical spas tend to offer non-invasive procedures that are similar to some things core doctors do, and it does stand to reason that if patients go to a medical spa looking for a Botox injection, they might eventually want a nose job or a face-lift. That being the case, the core doctor who owns the medical spa should be uniquely positioned to offer his or her services.

However, that’s not necessarily the case. I chat with core doctors all the time, and those who open medical spas intending to use them primarily as feeders for their practices tend to view them as poor investments. Their medical spas tend to fail, and the amount of business they drive to their surgical practices is insignificant.

In truth, medical spas that are designed primarily to act as feeders for surgical practices are set up to fail, and most core doctors tend to be very bad medical spa owners. They typically don’t understand the medical spa business, how much work it takes, the profit margins, the necessary volume, and numerous other factors vital to maintaining a successful medical spa. But that doesn’t mean that a medical spa can’t still be a successful business for a core doctor or help to generate surgical business—it simply means that a core doctor needs to understand the realities of the medical spa industry before he or she decides to dive headlong into it.

A Singular Paradigm

The business model core doctors typically understand is very different from the one under which medical spas operate. Surgical practices offer big-ticket procedures, such as breast augmentations and face-lifts; they do not need to deal with a large volume of patients, and they do not need to market themselves like a retail outlet—by the nature of their business, they tend to generate sufficient revenue to get by.

While medical spas must follow the same rules and regulations to which more traditional medical facilities adhere, they are unique in that their services are entirely elective and entirely cash-based. People who use medical spas do so because they want to, and treatments at medical spas are much less expensive than those available from core doctors’ surgical practices. Therefore, for a medical spa to succeed, it must have a lot of patients, its employees must master the art of selling, and it must entice patients to return. In other words, it must operate like a retail center rather than a medical office.

For this reason, medical spas need to be run with a totally different mind-set than core doctors are typically used to. Medical spas owned by core doctors who do not adapt to a more retail-oriented emphasis often end up failing. When I tell core doctors that I have medical spa clients who generate up to $6 million annually, many of them cannot wrap their minds around how that is possible.

A New Perspective

In order for a medical spa to create business for a surgical practice, it must first succeed on its own terms. To facilitate that, core doctors typically need to let others run their medical spas. Core doctors need to understand that the medical spa business is much, much different than the ones they are used to, and they need to partner with people who are experienced with marketing and sales in a retail environment.

A core doctor’s time is better spent performing highly profitable surgical procedures, which medical spas cannot do. If a core doctor can get an experienced businessperson to operate the med spa, they will have a much better chance to succeed. Giving up this control can be difficult for core doctors, since a lifetime of academic and financial success tends to make them think they can achieve anything. However, most doctors don’t go to business school—they don’t know retail and they don’t understand sales. These qualities—rather than medical knowledge or surgical skill—tend to lead to medical spa success.

In addition, medical spa team members must be provided the tools and processes to sell. A medical spa receptionist, for example, should not be someone being paid $12 an hour with no experience; he or she should be one of the highest-paid people on an administrative staff, because he or she needs to be able to sell.

A medical spa also should provide talk tracks for nurses and aestheticians so they understand that their jobs are about selling themselves and the doctor. Employees at medical spas also need to understand that selling retail products is extremely important to maintaining a healthy business. These characteristics of successful medical spas may seem distasteful to doctors, who are used to professional environments that are less aggressive, but this is the reality of the medical spa industry, and every day more and more physicians discover this to be true.

The businesspeople who enter the medical spa industry are willing to do whatever it takes to be successful. A core doctor might believe he or she doesn’t need the help, but chances are the opposite is true.

There are several resources in the AmSpa store to help you build your business and train your team to put your medical spa practice in an excellent position to succeed.

The Practice of Medicine

A medical aesthetic practice must be focused on sales, but it also is required to follow the medical rules and regulations of the state in which it is located. These laws can vary significantly depending on the state, so a med spa operator should consult an attorney familiar with the industry when setting up the practice and procedures. AmSpa members can check their state’s medical aesthetic legal summary to learn about the rules and regulations governing their practice.

Most states observe a doctrine known as the corporate practice of medicine, which decrees that a medical practice must be owned by a physician or a physician-owned corporation. As previously established, medical spas are retail outlets, but they also are unquestionably medical practices, so medical spas must be entirely owned by a doctor or his or her corporation in states where the corporate practice of medicine is observed.

This can present problems for a core doctor who wishes to partner with a businessperson to run a medical spa, because the businessperson likely is going to want some equity in the practice. However, giving any ownership stake to a non-physician is illegal if the state where the medical spa is located observes the corporate practice of medicine.

Opportunities for Ownership

There are solutions, however. If a core doctor wishes to partner with an entrepreneur to open a medical spa in a corporate-practice-of-medicine state, he or she can set up a management services organization (MSO). An MSO provides practice management services, while the doctor, for whom a separate company is created, exclusively provides medical services.

This arrangement, known as a management service agreement (MSA), allows the non-physician who owns and/or operates the MSO to supervise almost every aspect of a medical aesthetic business, including branding, marketing, owning the real estate, payroll, human resources, accounting and billing—everything except the administration of medical services.

This is akin to a lessor/lessee situation. Generally, the MSO owns and maintains the facility, while the doctor inhabits the space. The doctor pays the MSO for the right to occupy the space, and the MSO acts as a landlord, maintaining the facility and keeping the doctor as comfortable as possible.

However, unlike a rental agreement that is managed by a lease that dictates the occupant pay a set amount of money for a certain term, the amount paid to the MSO fluctuates according to the amount of money the physician is paid by patients. If the medical organization treats more patients in a term than it did the previous term, the MSO will also make more money. This represents a sort of equity—in function, if not form. Read more about MSOs here.

The corporate practice of medicine also dictates the ways medical spa employees can be incentivized. In retail, salespeople are often offered commission—a percentage of the sales they make that meet certain conditions set by their employers. However, under the corporate practice of medicine, all payments for medical services must be made in full to a physician or physician-owned corporation. In these states, if a medical spa owner pays employees commission, he or she is engaging in fee-splitting, which is illegal.

This is somewhat common at medical spas. The people who own and operate these establishments generally only wish to reward the people who bring business to the practice, but if a medical spa is found to have engaged in fee-splitting in a state where it is illegal, the doctor who owns the practice could face the suspension or revocation of his or her license, as well as a significant fine. Additionally, the provider who receives the commission payment is subject to a fine. A performance-based bonus structure should be offered instead of commission. Read more about med spa compensation here.

Medical spa owners and operators who need to learn about the ownership requirements in their states should contact an experienced health care attorney to find out what is legal in their state.

Becoming a medical director for an existing medical spa, rather than opening a new practice, is another option for a core doctor. Several core doctors I have represented are doing this very successfully. They don’t need to deal with actual day-to-day operation of a retail store—they can simply lend their name to a medical spa, perform some consultations, oversee the practice’s other medical professionals, and then head back to their own practice rather than worrying about the intricacies of the business. This offers a core doctor a look at the industry without requiring him or her to make an enormous ownership commitment. It’s important, however, to understand the risks and responsibilities of med spa medical directors before committing to this course of action.

A Path to Success

The core doctors who oversee a compliant, well-run medical spa stand to gain a great deal from the arrangement. A successful medical aesthetic practice can earn a lot of money by itself, and if a med spa has a lot of patients, it makes sense that the number of referrals to an affiliated surgical practice will be higher than if it is struggling.

If a core doctor wants to enter the medical aesthetic industry, he or she cannot do it halfway. A medical spa that is created to function primarily as a compliment to a surgical practice is unlikely to find a great deal of success; one that is designed to succeed on its own terms, however, offers numerous benefits to its owners, including the possibility of increased surgical business.

Attend an AmSpa Medical Spa & Aesthetic Boot Camp to learn the legal and business best-practices you can employ to build and run a successful medical spa practice.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law  Med Spa Ownership  Med Spa Trends 

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MSOs Help Non-Physicians Own Medical Spas

Posted By Administration, Monday, May 13, 2019

contract

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

For many of the people who work in the medical aesthetics industry, the goal of owning a med spa is difficult to realize. After all, most states observe a doctrine known as the corporate practice of medicine, which dictates that only a physician or physician-owned corporation can receive payment for medical services. Since many of the treatments offered at med spas are medical in nature, this means that the ownership of such facilities is governed by this doctrine.

However, there is a path to med spa ownership that doesn’t involve you attending medical school for four years and then working as a resident for several more. It is called a management services organization (MSO), and while it still requires the participation of a physician, it allows non-physicians to play a very significant role in the day-to-day operations of a medical aesthetics business.

As its name suggests, an MSO provides management services. It partners with a physician, for whom a separate company that only provides medical services is created. This arrangement, known as a management service agreement (MSA), essentially allows a non-physician to supervise most aspects of a medical aesthetics business, including branding, marketing, owning the real estate, payroll, human resources, accounting, and billing—everything except the administration of medical services.

This can be thought of as a lessor/lessee situation. The MSO typically owns and maintains the facility, and the physician occupies the space. The physician pays the MSO for the right to occupy the space, and the MSO functions in much the same way as a landlord, maintaining the facility and keeping the physician as comfortable as possible. However, unlike an apartment rental that is governed by a lease that dictates the occupant pay a set amount of money for a certain term, the amount paid to the MSO is determined by the amount of business conducted by the physician. If the medical organization treats more patients in a period of time than it did the previous period, the MSO will also make more money. This helps to create a bond between the physician and the MSO—if one side of the business succeeds, they both succeed.

The contractual separation of the two entities also provides benefits to both parties. For example, the physician incurs very little risk when it comes to setting up the business. If the practice fails, he or she is not on the hook for the facility, its contents, and the land on which it is located—that is on the MSO. Additionally, the creation of a separate company for the physician helps to prevent any liability issue incurred at the medical spa from affecting any of the physician’s other medical pursuits. The MSO also typically covers the physician’s liability insurance. This arrangement might seem to favor the physician, but that’s why he or she pays the MSO. And should the physician incur any sort of liability claim, the MSO is in the clear. 

It is important to note that while it may seem that a properly set up MSO is in charge of its medical spa, in order for the practice to be compliant, the doctor must be in charge of medical and clinical decisions. The easiest way for an MSO to get in trouble is for it to not actually treat the practice as a medical company. The doctor must manage the medical aspects of the med spa; if he or she does not do this, they are subject to severe punishments, including license forfeiture and large fines. Furthermore, the MSO is subject to repercussions for practicing medicine without a license. As such, it is vital that all parties must understand their roles and obligations.

MSOs have been used by entrepreneurs to form management companies for medical organizations as large as hospitals and managed care facilities, so it stands to reason that creating an MSO for a medical spa would be comparatively simple. However, this is not the sort of thing that can be properly executed using forms you can download off the internet, so you should consult an attorney who has experience successfully setting up MSOs if you are considering entering into this sort of arrangement. This is especially important if a business wants to sell to a large entrepreneur or expand across state lines.

If you want to learn more about MSOs, they are covered in depth at AmSpa’s Boot Camps. Click here to find out when we will be coming to a city near you and register to take part in the course.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Ownership 

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Why Your Medical Spa Will Be Investigated

Posted By Administration, Monday, May 6, 2019

sad doctor

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

Medical spa owners and operators typically don’t think their businesses are going to be investigated by the regulatory agencies in their state, and historically, this is often the case. Agencies simply can’t keep an eye on every practice under their jurisdiction, after all. However, the recent growth of the medical esthetics industry has increased the amount of scrutiny it receives from these agencies, so the odds that your medical spa is going to be investigated are improving all the time.

If you practice is investigated, the consequences can be severe. Depending on what the agency finds, the practice’s physician’s license could be suspended, which could cause the practice to be unable to operate, and heavy fines may be levied. Severe infractions can even result in criminal prosecution. Understanding why these investigations are triggered will help you avoid them, so here are the top reasons why medical spas are investigated.

Intake Procedures

Most of the procedures performed at medical spas are considered to be medical in nature by regulatory authorities. Before these treatments are administered, a physician generally must conduct a face-to-face examination, wherein he or she determines the patient’s overall health and the extent of the patient’s issue. After this exam, the physician suggests a course of treatment. However, regulatory agencies have disciplined many medical esthetics practices because they do not properly administer these exams; in fact, this is the most common reason why these investigations are initiated.

Uncertainty over the status of minimally invasive treatments, such as Botox and filler injections, tends to lead to these violations. Many seasoned nurses have been cited for administering these treatments without an exam because they think an exam is not required, since for many of them, that’s the way it has always been.

In most states, the initial exam can be delegated to certain licensed practitioners, such as a nurse practitioner or a physician assistant, but the physician still must be involved with establishing this protocol and make sure it is always followed. Medical spa employees must understand that doctors are entirely in charge of medical treatments at their practices—only they can set the protocols, only they can set the treatment plan, and only they can prescribe and delegate others to perform that treatment plan.

Physician Oversight

Along the same lines, because medical spas are medical practices, a medical professional must always be on site. While a physician can delegate most of the practice’s medical treatments to others, including non-licensed individuals, a licensed professional—a physician, nurse practitioner, physician assistant or registered nurse—should be at the practice at all times to oversee these procedures. The type of treatment provided, as well as the type of practitioner performing the treatment, are important considerations, so if you’re not sure how your state defines certain treatments, check with your local health care attorney for more information.

Some procedures, such as microneedling and dermaplaning, traditionally have not been viewed as medical treatments, but now typically are. This complicates matters at medical esthetics practices where estheticians have been performing these procedures for years. Additionally, most states require a tattooing or permanent makeup license to administer microblading, which complicates matters further.

At some medical spas, physicians don’t pay much attention to what is going on and essentially serve as medical directors in name only. Some physicians oversee more than a dozen medical spas, which should tell you that they spend very little, if any time actually working at these practices. These practices probably do not have proper oversight, unless they have a large number of nurse practitioners or physician assistants on their payroll. Regulators can easily see if a physician appears to have too much going on and use that as a reason to investigate what’s happening at his or her medical spas.

Marketing

Regulatory agents tend to spend a lot of time searching the internet for potential violations, due to the lack of funding their agencies receive. If they search for terms such as “medical aesthetician,” for example, it’s not terribly difficult for them to find violations. Additionally, they typically can get an idea of the practice’s ownership structure and if it is in contravention of the agency’s regulations. If an agent finds that a practice’s website indicates that, say, an aesthetician or nurse owns the practice—in most states, only a physician or physician-owned corporation can own a medical practice—he or she likely will not hesitate to open an investigation of it.

Additionally, Medical spa owners and operators should not present testimonials that are hyperbolic or suggest that the practice offers services it cannot actually provide. Medical advertising regulations dictate that practices must only cite skills and accomplishments that can be proven. For example, if your practice advertises “the best Botox in Boston,” it is likely to draw attention from regulators, since that is not a fact that can be verified.

Regulators also search for indications that a practice has violated patient privacy laws, such as HIPAA, on social media. Anything that can identify someone as your patient—down to simply responding to a patient’s Facebook post—can be interpreted as a violation, provided you have not obtained the patient’s consent in advance. If you’re not sure if your social media activity is violating patient privacy laws, consult with an experienced health care attorney as soon as possible. (Author’s note: AmSpa works with national law firm ByrdAdatto, which focuses on medical aesthetic legalities, and as a member, you receive a discount off of your initial consultation, along with a number of other great benefits. To learn more about the benefits of an AmSpa membership, click here.)

Drugs & Equipment

Regulators are likely to initiate an investigation if a practice is found to have purchased pharmaceuticals that claim to be cleared by the FDA—but are not—from overseas sources. Only drugs and equipment that have been totally approved can be purchased legally in the United States; importantly, this means that in addition to the actual product, the FDA has approved all packaging and inserts.

There are two aspects of this issue. On one hand are potentially dangerous counterfeit drugs—typically Botox and fillers—that typically are manufactured in and purchased from China; these should be avoided at all costs. The prevalence of these products has declined in recent years as more owners and operators have learned about how dangerous they are, but they’re still out there.

On the other hand, “parallel importation” is a practice in which legitimate products sold in countries where price controls keep the cost of prescription pharmaceuticals low are resold to practices in the U.S. for far less than they would cost if purchased domestically. Parallel importation is broadly legal for most products, but it is understood to be illegal with pharmaceuticals, and the FDA has indicated a willingness to prosecute the practice. If your medical spa is found to be engaging in parallel importation, it very well might trigger an investigation.

Filing with the State Board of Cosmetology

Medical spas have to spend a lot of time and effort complying with regulations involving the administration of medical treatments, but they also must follow the rules related to purely aesthetic offerings. Most state boards of cosmetology require businesses that provide such services to apply for a cosmetology “establishment license”; this is called different things by different states, but essentially it is a registration with the board of cosmetology declaring that aesthetic services such as facials are being performed. Medical spas understandably tend to be much more concerned with maintaining medical compliance, so they often neglect to obtain this license.

Boards of cosmetology seem to be less formidable adversaries than medical boards, but they will cause significant problems for medical spas that ignore them. If your practice offers esthetic services, make sure it is in full compliance with the state board of cosmetology.

Straight & Narrow

Ninety-nine times out of 100, an investigation into a medical spa is triggered by a report to a regulatory body, and this is more likely to happen as a practice become more successful. Competitors might report a medical spa, sometimes for good reasons and sometimes out of professional jealousy.

Also, patients who are disappointed with the way they’ve been treated—whether they’ve actually been mistreated or not—may report a practice to a regulatory agency. A patient is unlikely to grumble if they he or she has a good experience, regardless of the outcome, but medical spas should always strive to provide patients with exceptional service so that they don’t do something irrational—after all, as all medical esthetics practitioners know, medical spa patients are, let’s say… a passionate bunch.

Finally, it’s not unusual for former employees to report medical spas to regulators if their departures were not amicable. Upon hiring new employees, a medical spa should set realistic expectations, provide proper job descriptions, and make sure they understand procedures, so that if they are terminated, it won’t be seen as a surprise or viewed as unfair in any way.

Tags:  Med Spa Law  Med Spa Ownership 

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Join AmSpa at the Chicago Medical Spa & Aesthetic Boot Camp

Posted By Administration, Friday, May 3, 2019

chicago boot camp

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

Starting tomorrow, AmSpa will host its Chicago Medical Spa & Aesthetic Boot Camp at the Chicago Marriott Southwest at Burr Ridge, and we’re extremely excited for the opportunity to help medical aesthetic professionals develop their practices. There's still time to register for the event—just click here to sign up. Here’s a quick overview of the program:

Saturday, May 4

The Boot Camp begins at 8 a.m. with a continental breakfast, followed at 8:30 a.m. with my opening keynote. From there, we will move into the main program:

  • 9 – 10:30 a.m.: The Plan, presented by Bryan Durocher (Durocher Enterprises)—What are the most effective ways to develop a business plan for your medical spa? Medical Spa Consultant Bryan Durocher discusses the ins and outs of the planning process and helps determine how long it realistically takes to open a practice.
  • 11 a.m. – 12 p.m.: The Marketing Plan and Social Media, presented by Brandon and Jenny Robinson (Skin Body Soul MedSpa)—This session will help you determine how to most effectively market your medical aesthetic practice using both traditional methods and cutting-edge techniques.
  • 1 – 1:30 p.m.: Medical Aesthetic Hot Topics Panel, featuring Tim Sawyer (Crystal Clear Digital Marketing) and Nealy Skeldon (Environ Skincare)—This panel, moderated by yours truly, will feature a spirited discussion of the current issues and events that concern medical spa owners and operators.
  • 1:30 – 3:30 p.m.: The Law, presented by Alex Thiersch (AmSpa) and Renee E. Coover (ByrdAdatto)—In this presentation, we’ll discuss the long-standing and emerging legal issues that every medical spa owner needs to know about. As you can imagine, there is a lot to cover here, since new concerns seem to be arising daily lately.
  • 4:15 – 5 p.m.: The Treatments, presented by Terri Ross (Terri Ross Consulting)—Learn about the most profitable and popular treatments available to your practice, and find out how to best determine which treatments are right for you based on the state of your practice.
  • 5 – 6 p.m.: The Digital Marketing Ecosystem, presented by Tim Sawyer (Crystal Clear Digital Marketing)—Find out how to effectively spread the word about your medical aesthetic practice and how best to determine what’s working and what’s not. Your practice’s digital presence is more important than ever before, and curating it should be a top priority.

Saturday will wrap up with a cocktail reception from 6 – 7:30 p.m.

Sunday, May 5

Once again, the Boot Camp begins at 8 a.m. with a continental breakfast.

  • 8:30 – 9 a.m.: Anatomy of a $5-Million Med Spa, presented by Alex Thiersch (AmSpa)—Have you ever wondered what the difference is between your medical spa and one that’s mega-successful? It might be less significant than you think. This presentation will show what a $5-million med spa is doing right—and what you might be doing wrong.
  • 9 – 10 a.m.: The Financials, presented by Bryan Durocher (Durocher Enterprises)—At the end of the day, the money you’re bringing in is the most important measure of your practice’s success. This presentation will, among other things, demonstrate how to properly develop a budget and use metrics to determine your med spa’s strengths and weaknesses.
  • 10:45 – 11:15 a.m.: The Long-term Revenue, presented by Brandon and Jenny Robinson (Skin Body Soul MedSpa)—Simply being successful isn’t enough for a medical aesthetic practice; you have to know how to maintain and grow your success. In this session, the Robinsons will show you how to build patient loyalty and move your business forward.
  • 11:30 a.m. – 12:15 p.m.: The Consultation, presented by Terri Ross (Terri Ross Consulting)—As the old saying goes, you never get a second chance to make a first impression. Learn how to put your best foot forward with effective patient consultations—and how to turn them into consistent business.
  • 1 – 2 p.m.: The Lessons, presented by Louis Frisina—Every medical spa is different, but the successful ones share several common traits. In this session, Business Strategy Consultant Louis Frisina discusses the qualities that are typically found in practices that bring in a significant amount of revenue.
  • 2 – 3 p.m.: The Team, presented by Bryan Durocher (Durocher Enterprises)—A medical spa is only as good as its personnel, so it’s important to make sure that you hire a staff that can do everything you want it to—and more. In this session, you’ll learn about recruiting, hiring and retaining employees who can make your medical spa dreams come true.

Also, you’ll have the chance to visit with a number of exceptional vendors throughout this event. Attend the Chicago Medical Spa Boot Camp to check out the latest and greatest from the following companies:

We hope you can join us in Chicago this weekend. This AmSpa Boot Camp is a tremendous opportunity to get your medical aesthetic business headed in the right direction and learn some tips and tricks that can take it to the next level. Click here to register!

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law  Med Spa Ownership  Med Spa Trends 

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Unsafe Practices by New Mexico Aesthetician Lead to Second HIV Infection

Posted By Administration, Wednesday, May 1, 2019

needle

By Alex R. Thiersch, JD, CEO of the American Med Spa Association (AmSpa), and Patrick O’Brien, JD, legal coordinator for the American Med Spa Association

According to the New Mexico Department of Health (NMDOH), vampire facials administered at VIP Spa in Albuquerque have caused the transmission of the HIV virus to at least two customers. The spa, which was operated by an aesthetician, was shut down in September 2018 after an inspection found that needles were being improperly handled and disposed of, creating the possibility of the transmission of bloodborne diseases. NMDOH is offering free blood testing services and counseling to the spa’s former clients.

Vampire facials involve the extraction of the patient’s blood, the centrifugal separation of plasma from the blood, and then the reinjection of the plasma into the face with microneedling equipment in order to stimulate collagen production. The procedure has gained popularity in recent years thanks to the influence of Kim Kardashian, who posted images of herself experiencing the treatment to her Instagram in 2013, but later stated that she regretted undergoing it and that it was extremely painful.

Obviously, this sort of procedure presents numerous avenues through which contamination can occur. In New Mexico, drawing blood and performing microneedling are both considered to be medical procedures and must be performed by an appropriately trained and skilled person under the supervision of a physician or nurse practitioner, including physician assistants either in collaboration with or under supervision of a physician, registered nurses, licensed practical nurses and trained medical assistants. Aestheticians, such as the person who operated VIP Spa, are not licensed to perform or provide oversight for these procedures.

The medical aesthetics industry is thriving, but this is exactly the sort of thing that could kill it. All over the country, unqualified people are doing things they shouldn't be doing, not following the rules or being safe, and potentially causing incredibly serious health issues and even deaths, such as in this recently publicized case of plastic surgery practices in South Florida that have caused the deaths of at least 13 people. Situations such as these are exposing the seamy underbelly of the industry, and while legislators struggle to catch up with the issues that are emerging, compliant providers may well get caught up in any kind of blowback that results from incidents such as these.

As we’ve discussed here before, we have to do better. AmSpa is currently working to develop a set of standards that will help the medical aesthetic industry govern itself and provide patients with reliably safe, satisfying treatment experiences. Stay tuned to this space to learn more about this effort and what you can do to participate.

Medical spa clients shouldn’t have to worry about contracting life-shortening illnesses or even dying as a result of their aesthetic treatments, but if stories such as these continue to emerge, that’s exactly what will happen. People may decide that they are more afraid of running into bad actors than they are desirous of looking and feeling their best, and if that happens, it’s the death knell of the industry. We have to prevent this at all costs, and we hope widespread adoption of these standards can help accomplish this.

Tags:  Compliance is Cool  Med Spa Law  Med Spa Ownership  Med Spa Trends 

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How to Create an Effective MSA

Posted By Administration, Thursday, April 18, 2019

By Michael S. Byrd, JD, partner, ByrdAdatto

Performance of a car may be best measured by the engine, not the outer workings. A monitor or program does not deliver performance for a computer; that is found in the hardware. One must dig beneath the surface to find the source of performance. The same may be said about the management services agreement (MSA) for the management services organization (MSO) model commonly deployed in health care arrangements. The arrangement performs by the design of the MSA.

The MSO is the tried and true model for non-physicians to own a business in the medical services market. Alex Thiersch, partner at ByrdAdatto and CEO of the American Med Spa Association, published an article about unpacking MSOs. ByrdAdatto also published an article about nuances that may impact the design of the MSO model. We’ve even written an article about the influx of private equity into the medical and dental markets and the use of the MSO model for these investments.

Yet, to truly understand the essence of the MSO model, like the engine of the car or the hardware for computer, you must understand the MSA. The MSA defines the relationship between the medical entity providing medical services and the MSO entity providing management services. The importance of the MSA can be seen by the essential components of the arrangement that are defined in the MSA:

  • The flow of funds from patient encounter to profit;
  • The economic sharing of funds between the medical practice and the MSO entity;
  • The precise services to be provided by the MSO entity to the medical entity;
  • The separation of clinical responsibility to the medical entity in a way that complies with state regulations; and
  • The role of the physician often found in a medical director agreement (123s of a Medical Director).

A well-written MSA should look approximately 80% the same as another well-written MSA in another arrangement. This 80% should define boundaries from a compliance perspective, and hopefully it’s tailored in a way to work from one arrangement to the other. The other 20% deals with the heavy details of the particular arrangement. The 20% addresses the economics between the parties, as well as the roles and responsibilities of the physician providers, the use of space, the payment of personnel and the use of equipment.

The number one mistake with MSAs is for clients to grab onto a previously used MSA or, even worse, an MSA used by a colleague to memorialize their arrangement. The risk is obvious from a business perspective if the MSA flow of funds does not match the business plan. However, if the MSA does not reflect the reality of how the arrangement is functioning, the greater risk becomes one of compliance violations and the risk of enforcement that may lead to invalid arrangements, medical board sanctions, and, in some cases, arrests and criminal prosecution.

The greatest risk for using a faulty engine for a car or faulty hardware for a computer is economic loss. The greatest risk for using a faulty MSA is economic loss and compliance enforcement.

For more information on setting up a compliant MSA, please contact ByrdAdatto to schedule a consult.

With his background as both a litigator and transactional attorney, Michael Byrd 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 (2009-2018) and recognized as a Best Lawyer in Dallas by D Magazine (2013, 2016, 2017, 2018). He routinely lectures at continuing medical education seminars on the various business and legal issues that medical professionals face.

Tags:  Business and Financials  Med Spa Law  Med Spa Ownership  Med Spa Trends 

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The Ins and Outs of Physician Contracts

Posted By Administration, Wednesday, April 17, 2019

contract

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

An effective employment contract between a medical practice and a physician should be a win-win for the employer and employee. If one or both sides don’t approach the negotiation in a thoughtful manner, they could find themselves disappointed with the outcome. Here are a few features that should be included in a mutually beneficial contract.

(For more information on medical spa employment contracts, view AmSpa’s webinar on the topic; it is free to AmSpa Plus members.)

Goals

A practice should consider what it wants to accomplish with a contract with a physician. Does it need to fill a position? Does it want to provide service to more patients? Is a transition of ownership part of the equation? The answer to this can dictate the type of person the practice wants to recruit (i.e., a younger doctor versus a more experienced one) and affect the way the employment agreement is designed. If a physician who has entrepreneurial aspirations is hired to simply tend to patients, for example, neither side will be particularly happy, and the relationship likely will not last very long.

The practice’s intentions must be clearly communicated during the recruitment process, and the contract must be built around that philosophy.

Along the same lines, a physician must honestly evaluate his or her goals when negotiating a contract with a medical spa. These contracts typically last for one to two years, but both sides typically expect that the relationship will continue thereafter, so a physician must come to terms with his or her long-term plan. Is this where he or she wants to forge a career? This should influence how the contract is negotiated.

The physician also needs to consider a “plan B”—if this arrangement does not work out, how does he or she continue his or her career? The answer to this question heavily influences how the contract is evaluated. For example, if the physician wants to put down roots in the city where the practice is located but the contract has a restrictive non-compete clause, it is in his or her best interest to negotiate the terms of that clause, as it would severely restrict his or her options if it the relationship with the medical spa does not work out. Click here to learn more about non-compete and non-solicitation clauses.

Compensation

A medical spa needs to balance the practice’s economics, the risk tolerance of its owners, and salary expectations in its market when negotiating a contract. A competitive guaranteed base salary with some form of incentive-based bonus system can help secure top talent who might be considering other options. There are several ways this can be arranged, depending on what the physician prefers.

The physician, on the other hand, must understand his or her risk tolerance. While a high base/low bonus structure might appeal to some, others will want to pursue a low base/high bonus structure. The physician must determine his or her comfort level with the contract’s salary structure—if it is not optimal, it must be negotiated.

The physician also must be rational when determining his or her actual earning power. If the market does not offer enough potential business to justify taking a low base/high bonus salary, the physician should seek a different deal.

Ownership

The practice must determine what it wants to accomplish in terms of ownership with the hire, as it will affect everything from scheduling and coordination to top-level decision-making. The practice’s owner(s) also must consider if the hiring should be part of their exit strategy; if so, the contract must be created with that in mind.

The physician, meanwhile, must determine how he or she would build the practice and determine how the practice’s ancillary revenue streams compare to those offered by others. Ownership offers different appearances for different entities, so the physician must establish what he or she wants and what the practice can provide. What is the investment? What is the potential return? What is the risk? The contract should answer all these questions.

Creating a mutually beneficial contract is a complicated matter. Both sides must assess the risks and rewards, and they must also be willing to compromise on less pressing matters. A careful reading of a contract is a must, however—if both sides don’t thoroughly read the contract, they have nobody to blame but themselves if it doesn’t work out.

For more information about structuring your medical spa profitably and compliantly, attend an AmSpa Medical Spa & Aesthetic Boot Camp and become the next med spa success story.

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Ownership 

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An Extra Special AmSpa Boot Camp

Posted By Administration, Monday, April 15, 2019

asheville north carolina

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

On June 1 – 3, AmSpa will present a very special Medical Spa & Aesthetic Boot Camp in Asheville, N.C., at the Omni Grove Park Inn. Like other AmSpa Boot Camps, it will feature a variety of sessions designed to help medical spa owners of all experience levels run their practices more efficiently. However, while most Boot Camps feature two days of insightful education from industry experts, the Asheville Boot Camp will include three days of training that is designed to help medical spa owners and operators optimize their businesses.

AmSpa’s Boot Camp program is devised to help medical spa professionals familiarize themselves with the issues that make the industry uniquely challenging. Over the course of two days, attendees learn about important legal compliance issues of which medical spa operators may not be aware, business strategies that help maximize profitability, and big-picture practice management information, among many other things. Click here to view the tentative agenda—more information about the presenters and sessions will be added in the near future.

In addition to the AmSpa Boot Camp program on June 1 – 2, attendees will experience Terri Ross’ “Making Money in Your Med Spa” program on the morning of June 3. Ross is an industry thought leader and business builder who is the founder and owner of Terri Ross Consulting. Her expertise in practice management has helped several clients improve their businesses, and this presentation is designed to help medical spa operators improve their profitability. Best of all, it is included at the same price as a standard AmSpa Boot Camp.

Until May 1, you can sign up to attend the Asheville Boot Camp Extra at a special discounted Early Bird rate, so click here to register today. This is a tremendous value, so don’t let this opportunity pass you by!

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law  Med Spa Ownership  Med Spa Trends 

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Do You Believe Strong Leadership Can Affect Your Medical Spa’s Profitability?

Posted By Administration, Thursday, April 4, 2019

money

By Tim Sawyer, president & co-founder of Crystal Clear Digital Marketing

Does anyone in the med spa industry think strong leadership can affect profitability?

If you had asked me this question a week ago, I would have replied with a resounding, “Yes, of course.” After my experience this past weekend, I’m not so sure. In fact, I am more convinced that the basic concept of leadership in this community is not just undervalued, but almost deemed irrelevant. While I have given many talks on the subject at dozens of shows—including The Medical Spa Show, Vegas Cosmetic Surgery, A4M and The Aesthetic Show, to name a few—my experience this past weekend cemented my belief that now more than ever, we need to keep this topic in the forefront of our discussion through our lectures, blog posts, podcasts and national meetings.

Why? As the co-founder of two separate marketing and software businesses appearing in the Inc. 500 list of fastest-growing privately held companies, I am a firm believer in the very direct link between strong leadership and profitability. As a lifelong entrepreneur, I am constantly bombarded with books, seminars, podcasts and events touting the value and strategies for effective modern leadership. I get it. No leadership equals no sustainable growth. As a former business student, it’s one of those, “Duh, obvious,” things. For surgeons and med spa owners who have spent their lives focused on anatomy, clinical outcomes and patient safety—not so much. And I am not suggesting there is a lack of desire to be stronger leaders; I am suggesting there is diminished value and a lack of understanding.

Back to this past weekend. As I walked onstage to deliver my best 15-minute lecture on leadership, about 40% of the 150 attendees in the room—mostly surgeons—took the opportunity to use this time to take a break, get coffee and mingle. In other words, almost half of the attendees viewed this topic as somewhat irrelevant.

At this point, I know what you’re thinking: “Tim is a sore loser because people walked out of his talk.” Fair enough, and there may be some truth to that. However, it is more concerning to me that these leaders lacked the appreciation of the important role they play in their practices’ success outside of the 12-hour days spent doing treatments and procedures. In fact, I even asked the question, “How many of you want to spend the rest of your lives working 12-hour days with your primary (only) source of revenue coming from your physical labor?” Of course, that drew some intense stares, intentionally. Because this is what is at stake for many of the people in the room.

Entrepreneurs understand that you can’t scale a business if the majority of the revenue comes from the owner’s direct labor. To further explore this concept, I recommend you read The E-Myth; this would be a great investment of your time if this topic is remotely interesting to you. To get scale in your business, surrounding yourself with great people who can also make significant contributions to the business in terms of revenue is the number-one priority. The most successful entrepreneurs know they have done their job well when their businesses can function on its own with little or no direct involvement or supervision from the founders. Many of these strong leaders begin their business with the end in mind. They ask the question, “What do I need to do in this circumstance to create an entity that is either investable by others or saleable to another entity?” More simply put, if I bust my butt for 10 years, how do I exit and get paid? This is every entrepreneur’s dream.

That said, the rules are a little different in elective medicine, as the skills and training of the surgeon or provider essentially represent 100% of the value of the practice. And here’s the billion-dollar question: Is the current state a situation that can never be changed, or is there perhaps another way of looking at the role of the modern entrepreneurial surgeon leader?

I think part of the problem lies in the way we talk about, celebrate and showcase only those practices experiencing hypergrowth (for a variety of reasons, and I include myself in this group). We create this unrealistic expectation that anyone who applies this model or buys that device will immediately ascend to the elective medical elite, which is at best a bunch of B.S. When we do this, we disenfranchise the 90% of practices and med spas that could benefit the most from applying a few basic leadership principles, even if they only have a few employees.

Here are a few principles you can apply right away to increase the value of your practice and set it on a path to realistic sustainable growth. First, ask yourself, “Do I believe there is a correlation between effective leadership and increased profitability?” If the answer is no, sorry about the time you wasted reading this, and hopefully you will find my next article more valuable.

When I pose this question to live audiences, I always get a lukewarm response. But let’s assume we agree that leadership could make a 10% difference in the profit of your clinic. So, step one is to assign a dollar value to the 10%. Now, the next logical step (if we agree) is to first be realistic. Do you spend 10% of your time working on your leadership skills and strategic thinking? If the answer is no, we have already diagnosed a major problem, which is great and free.

Next, how can you put leadership to work in a small elective medical practice?

  • Lead yourself. Be mindful of the words you use, be respectful to employees and manage to your principles. Ask yourself, “What are my most important guiding principles that I will not compromise?” Are you walking that out daily?
  • Share skills. Employee turnover hurts when you have invested time and energy into training. Get over it. Things could be worse, like if you don’t train them and they never leave… yikes. Don’t forget—if you’re not training someone up to replace you, you will never be replaced. (Cue the surgeon-working-in-a-coffin music.)
  • Train and practice together. It’s a team and you’re the leader. Lead. This requires time. If you make it a priority and then a habit, you will improve the culture in your practice.
  • Hold your team accountable.
  • Have a plan, set goals and manage to the plan. You can’t manage what you can’t measure.
  • Share your vision and passion often. People love to feel like they are a part of something special.
  • Incentivize the right behaviors and address the wrong ones.
  • Be inspired. These simple universal truths can apply to any business of any size. You don’t need more consultants, more devices or more marketing. You just need some time to reflect in front of the mirror. Look past the outside and the comparative narrative and focus on the incredible leader inside of you. This is truly one of those scenarios where size doesn’t matter. Crystal Clear started with three employees, and now we have 80. Remember, if we agree that improved leadership skills could make just a 10% difference in the profitability of the business, that’s 10% more time and money you have to do the things that mean the most.

In addition to a world-class digital marketing and software platform, Crystal Clear offers a full-service consulting team to help you get the most out of your people, your processes and the tools you use to grow your clinic in 2019 and beyond. We get it. You can’t do everything by yourself. Fortunately, you don’t have to. Our world-class training team is here to help. They have been in your shoes in real life, long before becoming trainers. To learn more about Crystal Clear, visit www.crystalcleardm.com or call 888.611.8279.

Tags:  Business and Financials  Guest Post  Med Spa Ownership  Med Spa Trends 

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Join AmSpa at the L.A. Medical Spa & Aesthetic Boot Camp

Posted By Administration, Wednesday, April 3, 2019

la boot camp

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

We are just a few days away from AmSpa’s Los Angeles Medical Spa & Aesthetic Boot Camp at the Sofitel Los Angeles at Beverly Hills, and we’re extremely excited for the opportunity to help medical aesthetic professionals develop their practices. There's still time to register for the event—just click here to sign up. Here’s a quick overview of the program:

Friday, April 5

Prior to the Boot Camp, AmSpa will present a special after-hours tour of the Lasky Aesthetics & Laser Center, one of the most successful medical spas in the United States. This event, which is sponsored by BTL Aesthetics, takes place from 5:30 – 7:30 p.m. PST and will show attendees how this well-appointed practice makes its clients comfortable while providing a high standard of service. Space for this exciting event is limited, so click here to register.

Saturday, April 6

The Boot Camp begins at 8 a.m. with a breakfast, followed at 8:30 a.m. with my opening keynote. From there, we will move into the main program:

  • 9 – 10:30 a.m.: The Plan, presented by Bryan Durocher (Durocher Enterprises)—What are the most effective ways to develop a business plan for your medical spa? Medical Spa Consultant Bryan Durocher discusses the ins and outs of the planning process and helps determine how long it realistically takes to open a practice.
  • 11 a.m. – 12 p.m.: The Marketing Plan and Social Media, presented by Brandon and Jenny Robinson (Skin Body Soul MedSpa)—This session will help you determine how to most effectively market your medical aesthetic practice using both traditional methods and cutting-edge techniques.
  • 1 – 1:30 p.m.: Medical Aesthetic Hot Topics Panel, featuring Toni Lee Roldan-Ortiz (Environ Skincare) and Tim Sawyer (Crystal Clear Digital Marketing)—This panel, moderated by yours truly, will feature a spirited discussion of the current issues and events that concern medical spa owners and operators.
  • 1:30 – 3:30 p.m.: The Law, presented by Alex Thiersch (AmSpa) and Michael Byrd (ByrdAdatto)—In this presentation, we’ll discuss the long-standing and emerging legal issues that every medical spa owner needs to know about. As you can imagine, there is a lot to cover here, since new concerns seem to be arising daily lately.
  • 4:15 – 5 p.m.: The Treatments, presented by Terri Ross (Lasky Aesthetics)—Learn about the most profitable and popular treatments available to your practice, and find out how to best determine which treatments are right for you based on the state of your practice.
  • 5 – 6 p.m.: The Digital Marketing Ecosystem, presented by Tim Sawyer (Crystal Clear Digital Marketing)—Find out how to effectively spread the word about your medical aesthetic practice and how best to determine what’s working and what’s not. Your practice’s digital presence is more important than ever before, and curating it should be a top priority.

Saturday will wrap up with a cocktail reception from 6 – 7:30 p.m.

Sunday, April 7

Once again, the Boot Camp begins at 8 a.m. with a breakfast.

  • 8:30 – 9 a.m.: Anatomy of a $5-Million Med Spa, presented by Alex Thiersch (AmSpa)—Have you ever wondered what the difference is between your medical spa and one that’s mega-successful? It might be less significant than you think. This presentation will show what a $5-million med spa is doing right—and what you might be doing wrong.
  • 9 – 10 a.m.: The Financials, presented by Bryan Durocher (Durocher Enterprises)—At the end of the day, the money you’re bringing in is the most important measure of your practice’s success. This presentation will, among other things, demonstrate how to properly develop a budget and use metrics to determine your med spa’s strengths and weaknesses.
  • 10:30 – 11:30 a.m.: The Long-term Revenue, presented by Brandon and Jenny Robinson (Skin Body Soul MedSpa)—Simply being successful isn’t enough for a medical aesthetic practice; you have to know how to maintain and grow your success. In this session, the Robinsons will show you how to build patient loyalty and move your business forward.
  • 11:30 a.m. – 12:15 p.m.: The Consultation, presented by Terri Ross (Lasky Aesthetics)—As the old saying goes, you never get a second chance to make a first impression. Learn how to put your best foot forward with effective patient consultations—and how to turn them into consistent business.
  • 1 – 2 p.m.: The Lessons, presented by Louis Frisina—Every medical spa is different, but the successful ones share several common traits. In this session, Business Strategy Consultant Louis Frisina discusses the qualities that are typically found in practices that bring in a significant amount of revenue.
  • 2 – 3 p.m.: The Team, presented by Bryan Durocher (Durocher Enterprises)—A medical spa is only as good as its personnel, so it’s important to make sure that you hire a staff that can do everything you want it to—and more. In this session, you’ll learn about recruiting, hiring and retaining employees who can make your medical spa dreams come true.

Also, you’ll have the chance to visit with a number of exceptional vendors throughout this event. Attend the L.A. Medical Spa Boot Camp to check out the latest and greatest from the following companies:

We hope you can join us in Los Angeles this weekend. This AmSpa Boot Camp is a tremendous opportunity to get your medical aesthetic business headed in the right direction and learn some tips and tricks that can take it to the next level. Click here to register!

Tags:  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Law  Med Spa Ownership  Med Spa Trends 

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AmSpa provides legal, compliance, and business resources for medical spas and medical aesthetic practices.

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