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Shopping for an MD

Brian Coughlan May 2006 issue of Skin Inc. magazine

New technologies and measures involving nonsurgical facial cosmetic procedures performed in the spa by physicians and nurses are popping up at every spa industry expo and conference. Physicians in all parts of the country are interested in forming partnerships with local spa owners. There still is much to be learned about what can be expected from this type of relationship.

If a spa decides not to partner with a physician, it could mean competing head-on with medical offices that already have expanded services in order to capture clients who are eager to pay large amounts for anti-aging skin care. More and more doctors are saying “bye-bye” to health insurance hassles, and “hello” to credit cards and cash.

A niche market?

For years, many spas have enjoyed mutually successful referral relationships with physicians, which is beneficial and enough of a partnership in the opinion of some industry professionals. At the Face & Body 2005 Spa & Healthy Aging Conference and Expo, Douglas Preston, of Preston, Inc., presented a strong case for making the spa profession the best it can be without any medical intervention in his class “Here Come the Medical Spas! Can My Day Spa Still Compete?”

Producing figures illustrating that medical spas account for less than 17% of total spa service sales, he called the medical spa a “niche market with an uncertain future.” Preston said that many spa clients have made the facility their escape from the pressures of work and personal life demands. “How many people find lasers or injections relaxing?” he asked. “Do you want people who need serious dermatologic treatments in the waiting room with your spa clients?”

This is a question that many spas currently are grappling with in today’s medical spa-focused industry. See Getting Down to Business for tips on easing your spa into this new area of expertise.

A focus on customer service

Echoing Preston’s take on things, Paul Grenauer, owner of Excuria Salon and Spa in Williamsville, New York, asserts, “There is a large section of the population who finds a spa much more customer service-oriented than a doctor’s office.” In fact, although he credits physicians with pioneering much of what is new in nonsurgical skin care treatments, he views the spa owner as the one who is offering big opportunities to the physician. And it is not just the chance to escape health insurance reimbursement issues. The way Grenauer sees it, any physician stands to quickly increase their visibility with prospective patients because a busy spa can have more than 100 clients coming through the door daily.

He has chosen to be an independent contractor and employs a medical director. Grenauer’s physician is a dermatologic surgeon who works two nights a week and by appointment only. According to Grenauer, “The arrangement really has been quite easy, almost like having another stylist on staff—just with a much higher service total.” As to the issue of competing with medical offices, this successful spa owner says flatly, “Our clients constantly say that they only want to see the doctor in our setting and not in a medical setting.”

The right stuff

Finding just the right physician—one with outstanding medical and patient service skills who also is compatible with the spa owner—often leads to an individual with whom the owner already is acquainted. For example, the doctor who is serving as the medical director at Grenauer’s business has his office nearby and is a client of the spa. The relationship has developed to the point that the physician even provides some training for the spa’s estheticians, and is available in his office for concerned spa clients with skin problems or for consultations to schedule cosmetic surgery.

At Yon-Ka Signature Day Spa in Carmel, California, owners Chantal and Philippe Tourtin are working with several physicians, as well as a registered nurse who also is a licensed esthetician. The Tourtins knew them all through having clients in common and providing mutual referrals. Although they spent a year interviewing, the couple finally chose the medical professionals they had worked with in the past, because they were well acquainted with their high-quality work and reputations.

Although some consultants recommend conducting surveys or focus groups with clients to discover what advanced medical services to consider offering, Chantal didn’t feel the need. “I have been listening to my clients for years. They ask me if a particular procedure would be right for them and what it might cost,” the European-trained esthetician says. She adds that it has long been her policy within her practice to keep up with the work of local physicians in order to make referrals for clients who regularly seek her advice about their skin. Attending conferences for cosmetic plastic surgeons and dermatologists helps her to keep up with developments in the field. Already secure in the role of longtime skin care adviser to her clients, Chantal is working to design facial cosmetic surgery packages to give clients one-stop shopping at her spa.

Mutually beneficial

In her view, the patient, doctor and spa all will benefit from offering medical spa services. The patient has just one point of purchase, which is the trusted spa where post-operative care, such as lymphatic drainage, will be available.

The spa will recommend clients and schedule appointments for the physician, provide space for education and consultations, and ensure professional care and customer service before and after surgery.

Advantages for the spa owner are many, including higher service and product sales, additional work for team members, satisfaction for present clients and the acquisition of new ones, and the addition of business that otherwise might be lost. The point of this service effort is to provide clients with good results and a comfortable experience.

Challenges and missteps

This evolving business model seems wise now, but Grenauer warns that every advanced service added to a spa menu cannot be expected to immediately take off. “It took seven to eight months before our intense pulsed light (IPL) hair removal found the clientele we expected,” he recalls. “It required some marketing and word of mouth.”

Of course, getting things just right is the challenge, and potential missteps are lurking everywhere. Cindy M. Chang, owner of CMC Medi-Spa in Aiea, Hawaii, and a licensed acupuncturist, as well as a licensed cosmetologist, has opted not to partner with a physician. Although she refers clients to doctors, she doesn’t believe that they have the time to be truly present at a spa after tending to their medical practices. “The bottom line is that physicians often want to make the additional income without giving their time,” Chang asserts. She believes that a spa’s medical director potentially could become a “rent-a-doc” who lends their name and license without adequate commitment.

Andre Berger, MD, a Beverly Hills, California, physician and the owner of Rejuvalife Vitality Institute, shares Chang’s emphasis on holistic and wellness medicine, as well as her suspicion that some doctors are looking to spas only as additional revenue streams. He believes that this can mean a lack of sufficient supervision due to definitions of supervision requirements that vary from state to state. For example, a medical spa could have a physician lend his name to the business without actively being involved with it. This possibly could lead to serious liability problems for the physician and the spa.

Whatever the business model—whether it be an independent contractor or a corporation created for the new venture—Berger maintains that spa owners should align themselves with a physician who truly will be involved. The doctor should provide guidance to ensure that the new medical spa services will be in accordance with all of the legal and regulatory conditions mandated by the state in which the facility is located.

Florida spa owner Sanda Gane advises, “Learn all you can about the laws in your state governing this type of arrangement.” But because this convergence between licensed medical doctors and licensed cosmetologists and estheticians is so new, Gane is finding her time drained away by speaking with regulatory officials and searching Web sites that don’t yield answers that are dependable enough on which to base business decisions. To seek this information, start by logging on to for a complete list of each state cosmetology board’s contact information.

The big wave

These obstacles haven’t deterred Gane, owner of day spas in Jupiter and Wellington, Florida, as well as a future location in Marietta, Georgia, that will have two rooms and a waiting area designated exclusively for medical procedures. The plastic surgeon who serves as medical director for the Florida spas pays Gane’s rent when he is in the facility to perform such procedures as injectable fillers.

With what she has learned, Gane believes that setting up a management corporation probably will turn out to be the best business model financially and legally. It will make some of the confusing loose ends go away and ensure that her spas will receive a better share of the total income.

“The big wave is moving to our industry,” Gane says. And it is surging with physicians and healthy people who are willing to pay cash for a younger-looking appearance. The demand for these new services is becoming more and more of an issue for spa owners. Will you continue to refer out to a physician’s office whenever your clients request treatments that are beyond your scope of practice? Can you afford to turn away from this consumer-driven trend in the spa industry?



Getting Down to Business

Create a business plan.

Will this work? Your first job is to complete some revenue and expense projections to see if prospering in this new arena is in the cards for you. You certainly do not want to ruin your already successful business by adding a focus that isn’t supported by your clientele.

Read up on state laws and regulations.

In addition to keeping up with laws and regulations governing esthetic licenses, you must find out whether physicians in your state are legally permitted to perform certain procedures in your spa.

Become familiar with the terms of your lease.

Chances are good that the description of your business that appears in your lease does not anticipate physicians or other medical personnel working in your spa. Landlords can be difficult on this point, and you may need to seek an amendment to your original agreement.

Research liability insurance.

Your insurance broker may recommend an increase in the liability insurance you are carrying. You and your landlord also should consider obtaining the added protection of your spa being named as an additional insured on your physician’s insurance.

Consider various forms of ownership.

Spa owners who have integrated additional services provided by physicians have, for the most part, maintained their independence. However, your research may turn up advantages of creating a new partnership or corporation with a doctor or other investors. If so, it is crucial that you seek out specific financial and legal advice from trustworthy professionals.

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