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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 Administration, 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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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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The Importance of Reading Contracts for Medical Spa Owners and Physicians

Posted By Administration, Tuesday, September 11, 2018

By Alex Thiersch, JD, Founder and Director of the American Med Spa Association

An employment contract between a medical practice and a physician must benefit both the employer and employee; otherwise, it likely will be unsatisfactory for one or both sides. If one or both sides don’t take the time to read the contract, they could find themselves disappointed with the outcome. Here are a few things that physicians and practices should find within a mutually beneficial contract.

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

A Clearly Articulated Goal

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

The practice must clearly communicate its intentions during the recruitment process and make sure that the contract is built around that philosophy.

From the other perspective, a physician must honestly evaluate his or her goals when negotiating a contract. Physician contracts typically last for one to two years, but both sides typically expect that the relationship between the practice and the physician will continue thereafter, so a physician must consider his or her long-term plan. Is this where he or she wants to build a career? This can influence how the contract is negotiated.

The physician also needs to consider his or her “plan B”—if this arrangement does not work out, what’s next? The answer to this question heavily influences how he or she evaluates the contract. For example, if the physician wants to live in the city where the practice is located but the contract has a restrictive non-compete clause, that clause will need to be negotiated, as it severely restricts his or her options if it the relationship with the medical spa does not work out. Click here to read more on non-compete and non-solicitation clauses

A Fair Wage

A medical spa should balance the economics of the practice, the risk tolerance of the owners, and the realities of the market in terms of salary when negotiating a contract. A competitive guaranteed base salary with some form of incentive-based bonus system can make a difference when it comes to obtaining top talent who might be considering other options. There are multiple ways this can be arranged depending on what suits the physician.

The prospective employee, on the other hand, must come to terms with his or her risk tolerance. While a high base/low bonus structure might appeal to some, others might want to bet on themselves with a low base/high bonus structure. It is up to the physician to determine his or her comfort level with the contract’s salary structure and negotiate if it is not optimal.

The physician also must be sensible when determining his or her actual earning power. If there is not enough potential business in the market to justify taking a low base/high bonus salary, the physician should negotiate a different deal.

Ownership Considerations

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

The physician, meanwhile, must determine his or her goals in building the practice and figure out how the ancillary revenue streams offered by the practice compare to those offered by others. Ownership has different appearances for different entities, so the physician must think about what he or wants and what the practice can provide. What is the cost of the investment? What is the potential return? What is the risk? All these questions should be answered in the contract.

A contract is a complicated matter. Both sides must assess the value of the risks and rewards, and they must be willing to compromise on matters that may not be as important. A careful reading of a contract is absolutely imperative, however—if a physician or practice doesn’t thoroughly read the contract, they have nobody to blame for their unhappiness but themselves.

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

 

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

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Non-competes, Non-solicitations, and Medical Spa Employment Contracts

Posted By Administration, Thursday, September 6, 2018

By Alex R. Thiersch, JD, Founder and Director of the American Med Spa Association

Excellent medical spas require a commitment to building an excellent team, and once that team is in place many medical spa owners look to non-compete and non-solicitation clauses to protect their investment in time and training. Conscientious medical spa owners invest a great deal of time, effort and money toward making their employees the best they can be, and these contractual clauses, known as restrictive covenants, can prevent former employees from working for a competing medical spa and taking its clients and/or employees for a certain period of time. Implementing these clauses and enforcing them, however, are two very different things, so medical spa owners and operators must understand what they’re all about before attempting to utilize them.

Non-competition Agreements

A non-competition agreement is a part of a contract that is designed to bar an individual from working for a competing medical spa for a set period of time in a designated geographic area. If employees with non-competition clauses in their contracts choose to leave your medical spa, they would theoretically be subject to legal action if they went to work for another medical spa within the agreed-upon time span and geographic area.

This seems fairly straightforward; however, in reality, non-competition agreements are somewhat difficult to enforce to their fullest extent because American courts tend to be very reluctant to prevent people from working where they want. 

As with many things in this industry, the laws governing these arrangements vary from state to state. California, for example, has essentially established a ban on non-competition agreements. In Illinois, according to Renee Coover, JD, attorney with the law firm ByrdAdatto, “In a 2015 decision, the Third District of the Illinois Appellate Court readily followed and applied a rule established by a ground-breaking 2013 First District Appellate Court ruling. In Prairie Rheumatology Associates, S.C. v. Francis, the court reiterated that continued employment is sufficient consideration for a non-compete only where the employment is for a substantial period of time.  Citing the 2013 Fifield v. Premier Dealer Services, Inc. opinion, the court held that two or more years of continued employment amounts to adequate consideration. This means that the employee must be employed, under the terms of the non-compete agreement, for two years before the non-compete is enforceable against the employee.”

Non-solicitation Agreements

A non-solicitation agreement is a part of a contract that is designed to prevent a former employee from soliciting clients and/or other employees from your practice for a specified amount of time. In the medical spa setting, it’s not unusual for patients to become attached to the nurse practitioners, laser technicians and nurse injectors to whom physicians commonly delegate treatment. 

When one of these people decides to leave a practice, that practice needs to make sure that no effort is made to take said patients along—those are the practice’s patients, not the individual’s. If former employees make any effort to reach out to those patients and entice them to follow the employees to another practice, it is a clear violation of any non-solicitation agreement has been accepted.

Unlike non-competition agreements, non-solicitation agreements are commonly enforced, as courts are consistently willing to punish the misappropriation of a company’s assets—in this case, patients and employees. And with good cause—imagine the financial hit a medical spa could take if nurse injectors or laser techs were simply allowed to take the clients they’ve treated when they leave. However, like with non-compete agreements, you must be sure that any non-solicitation agreement you employ is carefully crafted to best protect your interests. 

Keys to Enforceable Contracts

Simply writing a non-competition or non-solicitation agreement into your employment contracts does not guarantee that they will be enforced when push comes to shove. But if these clauses adhere to the following guidelines, a medical spa’s chances of collecting damages if they are violated improve dramatically.

Adequate Consideration: In order to get something—in this case, protection for your medical spa should an employee leave—you must give something. This is known as adequate consideration, and every contract must include it in order for it to be enforceable. If you include a non-competition or non-solicitation clause in employees’ initial contract when they are hired, it is understood that employment is the consideration they are receiving in return for signing the contract.

“In the employment context, when an employee is at will, meaning he or she can be terminated at any time without cause, the employment itself constitutes adequate consideration,” says Coover. “Similarly, if a new employee signs a non-compete agreement as a condition of employment, the employment itself is also adequate consideration.”

However, if you wish to incorporate one of these restrictive covenants into an existing contract, some states require that you provide your employee with something extra in return for it—typically a pay raise or a promotion These states do not consider continued employment to be adequate consideration. If an employee does not receive something in return for this newly incorporated restriction, it is unlikely that a court will view the contract as enforceable. 

Coover adds, “For continued employment to be adequate to enforce a non-compete agreement on the existing employee, the employment must last a sufficient amount of time. For example, if a new employee signs a non-compete and the employer fires the individual the next day, it would not be fair to restrict the employee from competing for years in the future.”

Legitimate business interests: Courts typically permit the enforcement of restrictive covenants when they are utilized in the protection of confidential information, investment in specialized training and patient/client relationships. Make sure that any restrictive clause you wish to employ addresses these issues in some fashion—reach for anything more and you risk its enforceability.

Reasonableness: A restrictive covenant should not be excessively long in duration or cover a geographic area any larger than need be. Of course, both of these factors are case-specific—if a medical spa is in an urban area with a great deal of nearby competition, for example, it makes sense that the geographic restriction should cover a smaller area than if it were in a small rural community with one other medical spa in a 20-mile radius.

AmSpa members can utilize their annual complimentary compliance consultation with ByrdAdatto for any further questions regarding restrictive covenants in employment contracts.

A Crucial Decision

When delving into the world of restrictive covenants, it’s crucial to make sure that any non-competition or non-solicitation contract provided to employees be legal and binding. After all, a medical spa’s employees and clients are its lifeblood, and need to be protected. If you have existing contracts, make it a point to have a local health care attorney review them for viability. If you don’t have them in place and want to include them in your employment packet, make sure to work with a health care attorney to craft them correctly the first time.

To learn more legal and business best-practices attend a Medical Spa & Aesthetic Boot Camp and be the next med spa success story.

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

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5 Principles For Recruiting and Hiring Medical Spa Employees

Posted By Administration, Wednesday, September 5, 2018

By Dori Soukup, Founder and CEO of InSPAration Management

Recruiting, and hiring medical spa employees (including physician assistants, nurse practitioners, nurses, and aestheticians) and building them into a high performing team can be difficult. Finding talented team members, training them, and keeping them is essential to success! In this article, you will discover five effective principles to help build your team and elevate your performance.  

PRINCIPLE 1: Always Be Recruiting 

You should always be on the lookout for talent. Avoid waiting until you need people to start interviewing. You want to hire people who have a position already. In sports, teams have recruiters who are always scouting and looking for talent. Your business should follow the same practice. You need to always be searching for “A Players”. If you wait until you need someone, you end up hiring out of desperation and you will most likely hire the wrong person. 

PRINCIPLE 2: In-Depth Interview Process

It all starts with the interview. Do you have a system for the interview process? If not, you must in order to avoid faux pas. The most common mistake spa and medi spa professionals make when hiring individuals is the lack of clarity in regard to expectations. 

Often, a detailed position description and a commitment agreement are missing. Both are essentials components of the CLARITI Hiring System where you write down all the expectations you want the employee to do. 

For example, if recommending retail products is mandatory, it needs to be clarified in the interview process. Or if attending training and team meetings is something you do on weekly and monthly basis. Or if doing laundry and maintaining inventory, etc. All expectations should be disclosed, clarified, agreed upon in the interview process, put in writing and signed off by both you and the new employee. This will help you avoid making costly mistakes and assist you in hiring A and B players instead of C and D players. 

The cost of team turnover and hiring mistakes is enormous. Always hire slow. Take your time and make sure everything is crystal clear prior to offering the position.  

Find the keys to implementing CLARITI in your practice in the AmSpa Store.

PRINCIPLE 3: Orientation 

Once you’ve hired the new employee, your goal is to position them for success. Begin with a professional Orientation. Your orientation manual should contain your operating guidelines, your organizational structure, your culture, your policies, procedures, your systems along with your employee manual. This can be a mini seminar they attend or it can be a video they sit and watch. Post-orientation, they should be tested to ensure they understand everything. This will provide clarity on what it means to be part of your team.  

PRINCIPLE 4: Spa & Medi Spa Training Manuals

No one is going to come to you completely trained. It’s essential to have training manuals to help you train your team. One thing I learned long ago is that for a business to succeed, you need to have effective systems in place, then keep training those systems until they are perfected. 

As a business consultant, I have the opportunity to speak to many medi spa owners and directors. The one thing I notice over and over is the lack of training structure within spas. Spa leaders must put on the trainer and coach hat more often if they want to build a dream team and reach new levels of success. 

I like to use sports analogies because they have a lot in common with business. Sports teams spend a lot of time training and sharpening their skills. Coaches are always on the floor watching and coaching  their teams. They take time-outs, watch videos, create plays and map-out game strategies. You have a TEAM and if you want to win, you need to spend time coaching and training. 

A. Business Training

Business training is almost non-existent within the industry. BIG MISTAKE! 

As leaders, it’s essential to train the team. Having training manuals by department will make your life a lot easier. Your manuals should include systems, strategies, processes, tools, forms, scripts, an approach on how to perform and deliver a great guest experience. 

Business training should include:

  • Revenue generation – Training the team on how to increase service and retail revenue (Click for more information on recommending treatment upgrades, series sales, or retail products)
  • Marketing – self and cross promoting to increase awareness  (Click for more information on building a medi spa marketing plan)
  • Guest experience – increasing retention rate
  • Promoting spa and medi spa memberships (Click for more information on developing your membership program)
  • Overall revenue generation – Increasing revenue per guest (Click for more information on compensation based on Volume Per Guest)

B. Technical Training 

Delivering a great experience is essential to your success. Your team must wow your guests with their skills, techniques and knowledge.

Technical training should include:

  • Treatment protocols
  • Product knowledge – services and retail
  • Contraindications
  • Ingredients and their benefits 
  • The spa and medi spa menu
  • Treatment room up keep
  • Inventory management
  • Monitoring product cost per treatment

C. Guest Relations Training – Reception Team 

Your client relations department can make you or break you.

Training manual should include:

  • Call management
  • Check-In
  • Check-Out
  • Retail sales
  • Future appointments
  • Membership sales
  • Scripts and strategies
  • Targets and goals

Click here to learn how to transform your guest relations department.

To be successful, a big emphasis must be placed on initial training and continual training.

PRINCIPLE 5: Develop Healthy Training Habits 

Training Schedule

Develop a training calendar and publish it. A training session can be as short as 30 minutes. Getting the team into a training habit is essential to your success. Schedule training sessions for the same day and time on a regular basis.

Training Agenda

Be prepared with an agenda and a purpose. Portray a professional image to your team and keep them engaged.

Evaluating Your Training

It is wise to evaluate your training to ensure productive sessions and obtain valuable feedback.

Assistant Coach

As in sports, the head coach has assistant coaches to assist them. Who are your assistant coaches? If you don’t have them, it’s time for you to develop some key players to assist you.

Setting Goals

Establish targets and goals for each department. Break them down into daily goals.

Measuring Results

Not measuring results is like getting on the playing field with a bunch of people running around and not keeping score of the game. Setting goals and measuring results is the only way to run a successful business.

Success requires planning, self-discipline, motivation, dedication and consistency. When you invest in your team’s technical/business training and development, your spa business will thrive and produce great results. 

Dori Soukup is the Founder and CEO of InSPAration Management, a firm specializing in medical spa and salon business development, advanced education, and business tools. Throughout the past 15 years, Soukup has contributed to the success of spa companies worldwide. Her passion is developing innovative, effective educational programs and business strategies leading to exponential growth and profits. She is the recipient of the American Spa Preferred Educator award and is a sought-after global speaker within the spa and medical spa industries.

 

Tags:  Business and Financials  Med Spa Ownership 

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Improving Your Med Spa Business: Always Close For Something

Posted By Administration, Wednesday, August 22, 2018

Rebecca Gelber, MD, Tahoe Aesthetic Medicine

A successful medical spa requires two things: 1) A patient-first focus on results and service and 2) tightly buttoned-up business practices. As clinicians opening a new aesthetic practice we are often already trained in the first, but we are rarely armed with the second.

Medical aesthetic practitioners have extensive training in performing procedures, but most of us have close to zero experience with the business side of aesthetic medicine. Practices rarely run into trouble because they can’t perform treatments properly. They run into trouble because they don’t know how to sell those treatments. 

You can have the best equipment and skills, but if you never get patients to sign up to sit in your treatment chair it's all for naught. Even when we do have a patient coming into our practice it’s all too common for them to leave without taking full advantage of the services we offer.

There are missed opportunities in our path each day. Every patient encounter is a chance to add value to their life and strengthen their relationship with your office. If someone comes in for Botox, ask if there is anything else they would like help with. This may be the time for them to learn about fillers, lasers or even a skincare product.

If you’re unsure where to start, learn from people who know how to sell. When sales reps come into your office, study what they are doing - especially the ones who have been around a long time. There is a mantra in the sales world: “Always close for something.” In other words, always move the process forward, even if it’s a baby step. Bad sales reps make you feel uncomfortable when they do it; good sales reps make it natural and non-threatening. They might ask, “Is there anything else that’s bothering you?” or “May we call in a couple of months to check in?” A good sales rep moves the process forward without making you feel pressured.

Believe it or not, dental offices are fantastic at selling. They “always close for something”. They have methods perfected for getting people to sign up for their next appointment before they leave, and ensure that the patient shows up six months later. Try incorporating something like this in your practice. Even if they aren’t ready or able to block out their next appointment, you can get permission to call or send them a reminder card.

In our office, we have a sheet of paper for every patient. If they come in during May and say that they would like to do a laser treatment in September when they can be out of the sun, we ask if they would like a call in August to make sure they get the best appointment slot. If they say yes, we make a note of that and then put that paper in a folder marked August. We have a folder for every month and keep each page with an action item in the appropriate month. That way, when anyone in the office has a free moment, they can pull out the current month's folder and follow up with someone.

This one little thing can keep your calendar full without having to resort to expensive marketing and specials. It keeps patients coming in regularly, greatly improving your revenue stream and also the results and service you provide.

“Sell” is a four-letter word, but in your medical aesthetic practice it doesn’t have to be a bad one. By taking every opportunity to educate your patients on the services that you offer you can improve the quality of their results while also increasing the profitability of your business.

(Editor’s note: attend an AmSpa Medical Spa & Aesthetic Boot Camp to learn legal and business best practices that are key to medical spa success.)

Dr. Rebecca Gelber graduated from the Johns Hopkins School of Medicine in 1993 and completed her residency training at the University of Pittsburgh Medical Center. Since that time, she has completed a preceptorship in aesthetics, liposculpture and stem cell therapies, as well as specialized training with luminaries across the country in BBL and laser therapies, Botox, dermal fillers, and thread lifts. She founded and owns Tahoe Aesthetic Medicine and also offers specialized training to other providers.

 

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

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4 Ways to Increase Med Spa Retail Sales

Posted By Administration, Tuesday, August 21, 2018

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

Increasing medical spa retail product sales can be one of the fastest ways to boost the profitability of your medical aesthetic practice.

Focusing on product sales can benefit your medical spa in a number of key ways, and according to the AmSpa 2017 Medical Spa State of the Industry Report retail products account for 18% of total revenue at the average medical spa. Once you’ve decided that you want to make this a larger part of your business, where do you get started?

A Product to Fit Your Business

When choosing product you want to make sure that what you are bringing in not only fits in with the brand direction of your business, but also that the products match the services you offer since proper use of a skin care program can produce better treatment results for your patients. You don’t necessarily have to stop at treatment products, however. A few on-brand retail pieces that don’t require a recommendation to buy can help create a more full experience for your customers. Are you a luxury brand? A wellness brand? You might consider dedicating some shelf space to items that reinforce this message. 

Tyranny of Choice

Though it’s good to have some selection of product in your medical spa, offering too many options at the same level of product treatment can be a detriment. Too many choices that aren’t differentiated can leave customers confused and less likely to purchase. Choosing a few lines that each have multiple levels of treatment will often serve you better.

As medical spa industry expert Bryan Durocher of Durocher Enterprises states, “While selection is important, sometimes it is better to go an inch wide and a mile deep.”

Make Sense of Senses

Major retailers know that engaging customers through multiple senses can yield benefits in retail sales. Visually interesting displays combined with calming music, or scents that match the scents of some of your products provide subtle boosts for retail sales.

Small changes to the layout of your space can also make a difference. Do you keep the lion’s share of your product behind a counter or in a locked case? This will impact your sales since people like to look at and hold things as they consider buying it. Does your retail area overlap with your waiting room? Think about separating them, because as Durocher states, “People that sit don’t shop.”

Your Team

Of all the possible points of improvement in retail sales you can possibly see in your business, training your team will give you the biggest benefit, bar none. When talking about retail sales Dori Soukup, of InSPAration Management says, “How can you expect to improve performance and achieve new results if the team is not held accountable for their actions or performance?” 

She emphasizes concrete expectations, measureable goals, sales systems, and team coaching when setting up a business for retail success. 

As Durocher states, “Have a defined client experience that incorporates retail products during the consultation, during service, and at the close of the visit.”

It’s also important to incentivize your team. While, in most states, you generally cannot pay staff commission for services in a medical spa because of fee splitting laws, you are generally allowed to pay percent commission on retail product sales.

Selling product is one of the keys to increased profitability in medical spas, and if you’re looking to get into the industry it’s a core principle you need to be familiar with. 

For more information on ways to build and run a successful, profitable, and legally compliant medical spa attend one of AmSpa’s Medical Spa & Aesthetic Boot Camps and be the next med spa success story.

 

Tags:  AmSpa's 2017 Med Spa Statistical Survey  AmSpa's Med Spa & Aesthetic Boot Camps  Business and Financials  Med Spa Ownership 

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Potential Legal Issues With Your Med Spa Website

Posted By Administration, Thursday, August 9, 2018

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

Does your med spa website meet all your local laws and regulations? According to the 2017 Medical Spa State of the Industry Report, a website is the most frequently used marketing tool for med spa practices. If you don’t have one, you’re losing out. A very common mistake being made by med spas across the country, however, is the failure to create and maintain a website that accurately reflects and realistically represents the business structure and ownership of the med spa.

Due to recent substantial growth in the med spa industry, regulatory authorities in several states are cracking down on med spas that are, or appear to be, operating illegally. But just how are these state regulatory agencies obtaining information on the business operations and workings of med spas? And what information is leading investigators to believe a med spa is operating illegally?

Websites. Technology and social media has driven businesses, big and small, to use the Internet as a tool to provide information to their clients. Med spas are no exception. A majority of med spas across the county operate websites with information about their “team” of professionals, the services provided, specials and discounts offered and even explanations of the different treatments and procedures clients can purchase.

Many of these websites provide bios of the professionals that own and operate the med spa and perform medical procedures. But, unfortunately, in several instances those individuals are not licensed to practice medicine and thus, cannot perform medical procedures or own a medical practice. State regulatory authorities have caught onto this- and now they are enlisting investigators to examine med spa websites looking for signs of illegal ownership or the unauthorized practice of medicine.

For instance, in Illinois, the Department of Financial and Professional Regulation (“IDFPR”) has begun launching investigations against med spas based solely on their website content. (AmSpa members: check your state’s medical aesthetic legal summary for more information on medical advertising in your state.) The IDFPR, much like other state regulatory agencies, has an enormous case load and it is impossible for investigators to personally visit every med spa to investigate and determine whether the spa is in compliance with state laws. Instead, to save time and effort, investigators are tasked with reviewing the websites of med spas to obtain information on ownership, business structure, fee structure, staff qualifications, and services.

If the med spa website does not realistically reflect its business practices or falsely depicts a non-physician as an owner or co-owner of the med spa, it will quickly be on the IDFPR’S “radar” and the owners and employees associated with the med spa can face suspension of licenses, fines and penalties. Click here to read more about non-physicians owning med spas.

Although not all states have prohibitions against non-physician ownership of medical spas, most states prohibit fee-splitting between physicians and non-physicians. If a website advertises ownership by a non-physician and highlights a physician as a “medical director” for the med spa, it is likely that the non-physician owner is receiving patient fees and then splitting these fees with the physician on staff. This constitutes fee-splitting between the physician and the non-physician owner of the med spa and it is illegal.

To ensure that your med spa website is in compliance with state and federal laws and to avoid the widening “radar” of investigating state agencies, it is important to perform a careful review your website for any terms or titles that may be red flags. Although there is no script to follow in creating a flawless med spa website, here are a few essential pieces of advice:

  1. List the physician owner prominently on the website to show the physician’s involvement in the business;
  2. If you employ an advanced practice nurse or licensed nurse practitioner to consult with and treat patients under the supervision of the physician owner, include this individual prominently on the website to inform clients and potential clients of that individual’s involvement in patient care;
  3. Importantly, if employing a registered nurse or aesthetician as the med spa’s “go to” coordinator or office manager, bestow upon the individual a title that properly reflects his/her duties, responsibilities, and limitations.

As technology grows, websites and other forms of social media become increasingly important for med spas looking to grow their business and compete in the marketplace. Now is the time to reevaluate your med spa’s online presence and ensure that if you have a website, or plan to establish one that you are conforming to the law and using the website to help, not hurt your business.

To learn more about how to build and run a legal and successful medical spa practice attend an AmSpa Medical Spa & Aesthetic Boot Camp and be the next med spa success story.

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

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