Physicians and managers who run cosmetic procedure practices might think launching a medspa is a seamless extension of the existing practice.
That’s not the case, says Bryan Durocher, of Durocher Enterprises, which provides coaching, consulting and more for med spas worldwide.
“If you run a medspa like a doctor’s office, you’re going to fail. You have to run it like a retail business,” says Durocher, who spoke on team compensation and pay by performance at this year’s American Med Spa Association (AmSpa) show in Las Vegas.
The same goes for physician practices that venture into traditional spa services, which Durocher calls a trend.
“Right now, we’re seeing physicians are taking over the spa world, as well — not just medical aesthetics. You’ll see a practice offering lasers, Botox, fillers, IV therapy, bioidentical hormone replacement, but then they’re also going to have facials, body treatments, massage,” he says.
The appeal of owning a cash-based business in a world of dwindling reimbursements and growing regulations is obvious. But it’s what physicians don’t know about owning a medspa or spa that can get them in trouble.
For example, medspa employers cannot pay providers commissions for services. That’s illegal in every state and is considered fee splitting, according to Durocher.
“You can pay a commission on a product sold, but not on services. Providers have to be paid a wage,” he says.
And medspas cannot have a reward referral program for referring new patients. But a traditional spa can, according to Durocher.
“That, again, is fee splitting,” he says.
A medspa manager who notices a patient has referred several friends and offers an unsolicited product or service as a thank you isn’t breaking any rules. But a defined program where the medspa solicits referrals for, let’s say $100 off the person’s next Botox treatment, that’s a no-no, he says.
The aesthetician in a traditional spa, on the other hand, can have a spa referral program, if it’s spa related and only dealing with spa clients, he says.