For Your Consideration: Should Medical Aesthetic Practices Be Treated Differently When It Comes to Ownership?

Posted By Mike Meyer, Friday, November 20, 2020

doctor and businesswoman

By Alex R. Thiersch, JD, CEO and Founder, AmSpa

Ownership is one topic that has always been a hot-button issue in aesthetic medicine.

Some states operate under the corporate practice of medicine (CPM) (a topic that AmSpa has covered in depth on several occasions—see here and here, for example), which provides that only physicians or physician-owned companies may own businesses that practice medicine. Put differently, a strict reading of the CPM not only prohibits non-physicians from owning medical practices, but also forbids them from employing or contracting with physicians to provide medical services for their business.

As is often the case in aesthetics, every state treats ownership differently. While a handful of states employ a strict reading of the CPM—absolutely no one other than a physician may own a business that provides medical services—others have exceptions that allow other medical license-holders to own a percentage of the medical practice. California, for example, allows a host of medical license holders—registered nurses (RNs), advance practice registered nurses (APRNs), physician assistants (PAs), etc.—to own a part of a medical practice, provided that a physician owns at least 51% of the practice. Other states don't follow the corporate practice of medicine at all. Florida, for example, has no rule on the books preventing a non-physician from owning a medical practice.

With this big a variance from state to state, ownership is an incredibly confusing and often frustrating topic in medical aesthetics. In fact, I'm often asked, "Why is ownership even an issue in health care? We live in a capitalist, free-market system, after all, so why should there be any restrictions on who can own a health care practice?"

The answer comes down to two things: control of medical services and money.

Control and Money

A patient's health and well-being are the most important aspects of any medical treatment, and they should always be the main driver of medical decisions—not corporate profits.

The CPM exists because the second concern regarding ownership—money—can interfere with and overtake the first, patient care.

A great way to visualize this is to consider a scenario where a private business, owned by non-physicians, employs a physician to provide medical treatment for the business. If the business owner collects the revenue and enjoys the profit from the medical services, there's an incentive for the business owner to encourage or direct the doctor to emphasize profit for the business.

In extreme examples, the business owner could direct the physician to only provide services that make the most profit for the business, or to exclude services that aren't as profitable, regardless of the patients' need for a specific treatment. This could impact pricing, dosage, and the selection of drugs or devices available at business. Since the business owner employs the physician, the business is within its rights to terminate the physician or health care providers if they don't follow the mandate of the business owner. This scenario has played out many times in various medical fields, including in aesthetics.

The firewall to this example lies with the ethics of the physician and health care workers providing the medical treatments. They swear oaths to care for the patient and ensure that medical treatment—not corporate profit—drives patient care.

In other words, so long as the physician is in control of medical care and is serving the well-being of the patient, profits shouldn't matter. The medical treatment and ideal patient outcome should be driven by the same motives.

What Does This Mean for Medical Aesthetics?

Ownership takes on a different meaning in medical aesthetics, and the basic construct of control versus money must be viewed from a different perspective. Why? Because unlike traditional medical services, medical aesthetic practices provide voluntary medical treatment. There is no "medical necessity" to eliminate wrinkles, increase lip volume or remove unwanted hair. Yes, people want it, and there is no question that it positively impacts patient's lives, but it's a choice—not a medical necessity.

Medical aesthetic practices sell a product in a competitive, cash-based marketplace, and typical market considerations drive who wins and who loses. Customer demand drives business, not medical necessity. After all, do "the medical needs of the patient" or "the health and well-being of the patient" matter as much when the patient, not the provider, is deciding what medical treatment they receive?

Therefore, with medical aesthetic practices, the whole concept of patient well-being, medical necessity and, ultimately, corporate profit, is arguably flipped on its head.

Food for Thought

A point needs to be made here that cannot be overstated: Patient care matters in aesthetics, and every provider and medical spa owner should consider the safety and care of their patients as the single most important factor in their business. The industry must agree that patient care and safety cannot be placed below profitability.

However, because of the unique interplay in aesthetics of patient choice, lack of true medical necessity and market considerations, an argument can be made that when it comes to ownership of a medical spa, the traditional considerations of corporate profit versus medical care are not as distinct as in other areas of health care.

There are two questions that this industry needs to consider. First, should ownership matter at all in medical aesthetics? After all, the primary issue is patient care, not ownership. Why should it matter who owns the medical aesthetic practice so long as the medical care is provided in a safe, proper way? There are other laws in place to address the underlying problems, such as Stark laws, anti-kickback provisions, and laws against self-referral and fee-splitting, which are all designed to stop physicians and non-physicians from leveraging profit to their benefit and to the detriment of patient care. In other words, should medical aesthetic practices be treated differently than other medical businesses when it comes to ownership?

Second, if restrictions on ownership are appropriate in medical aesthetics, should non-physician medical providers be included in the ownership equation? After all, RNs, APRNs, PAs and other licensed medical professionals are required to be mindful of patient care as well, and state law requires the involvement of a physician at some level anyway (states with independent practice statutes notwithstanding).

These questions raise considerable ethical, legal and financial issues—in not only aesthetics, but also other areas of medicine. The CPM has been around for a very long time, and any suggestion of changing ownership laws in aesthetics will set off a firestorm of controversy in other areas of medicine. Also, it is important to not be na√Øve about the impact of money on medicine—law firms see cases every year that prove that the almighty dollar is a powerful incentive to skip steps in patient care. Given that medical aesthetics is one of the fastest growing industries in the world, with hundreds of millions of dollars at stake, it's no surprise when certain actors decide to put money first.

Until these issues are worked out, the most important thing for our industry is to comply with the laws as the currently exist. And, above all, medical spas must adhere to the highest standards of patient care. Nothing will kill this industry faster than unsafe medical aesthetic practices and providers who believe making money is more important than patient safety.

Regardless of who owns the business, know that AmSpa is here to support all medical spas, both physician-owned and non-physician owned, who comply with their state's law and put patient safety first.

What are your thoughts on this topic? I'd love to hear your comments. Please email me at

Related Tags

Subscribe to Our Email List

Medical spa news, blogs and updates sent directly to your inbox.