How to Open a Med Spa

1. Essential medical spa laws

Medical spas have become incredibly popular, offering treatments that make you feel glamorous and pampered. In many cases, however, these procedures also fall within the realm of medicine. As a result, they must adhere to the same regulations and rules that govern medical practices in your state.

As more and more people make med spas part of their lives, attention from regulatory agencies is only increasing. High-profile cases of bad-faith businesses cutting corners and injuring patients have created huge headlines and put a spotlight on an industry that has so far operated under the radar of many enforcement agencies.

Whether you're interested in injectables like neuromodulators and fillers, energy devices such as lasers and body contouring devices, or treatments like thread lifts, microneedling, and IV therapy, it's crucial to familiarize yourself with the laws in your state to ensure compliance. 

The baseline of medical spa legal compliance focuses on these three areas:

1. Who can legally own a medical spa?
2. Who can legally diagnose med spa patients?
3. Who can legally perform medical spa treatments?
   

The answers to these questions can vary widely from state to state, but understanding the baseline behind the rules can put you on solid footing. For a deeper dive into med spa laws, read how to open a legally compliant medical spa.

Who can legally own a medical spa?

Physicians can own medical practices in throughout the country, so physicians and physician-owned corporations are able to own medical spas. After that, things can get complicated.

At issue is a doctrine called the corporate practice of medicine. States that follow this doctrine restrict who is able to own medical practices, employ physicians and receive payment for medical treatments. Many corporate practice of medicine states allow other medical professionals (in some cases NPs, PAs, or RNs) a portion of a medical practice as long as a physician holds the majority. Other state require full physician ownership.

In states that do not regulate the corporate practice of medicine, generally speaking, any licensed or unlicensed individual may own part or all of a medical spa.

However, non-physicians looking to participate in revenue from medical spas do have a legal pathway. A corporate entity known as a Management Services Organization 1) Can manage many non-medical tasks for a medical spa, 2) Can receive payment in exchange for these management services and 3) Can be owned by anyone regardless of medical license. Learn more about MSOs.

Who can legally diagnose med spa patients?

Whether it's called the Good Faith Exam, the initial exam, the initial patient consultation or any other variation, seeing a patient and decided on a treatment plan for a medical procedure is defined as the practice of medicine in every state in the country. Therefore, treatment diagnosis must be performed by a physician, or an NP or PA working in collaboration with a physician - though there are exceptions in states that allow independent practice. This examination must occur before the first time a patient begins a new line of treatment.

It is critical to understand that an RN cannot administer the Good Faith Exam without running the risk of criminal prosecution for the unauthorized practice of medicine.

Read more detail about the Good Faith Exam here.

Who can legally perform medical spa treatments?

The question of who can perform med spa treatments can be narrowed down into two buckets: who is allowed to do the procedure, and what kind of supervision does that person require.

Listen to AmSpa founder Alex Thiersch, JD discuss the challenges in finding, understanding and interpreting med spa laws across the country.

Read more on who can own a med spa here.

2. Medical spa business practices

The prospect of starting up a new med spa business can seem overwhelming. Any new venture has dozens of components that nobody learns in training as a medical professional, and even for experienced entrepreneurs there are industry-specific best-practices that can be hard to find. Luckily, there is a roadmap to success. This path has been walked before, and learning from industry experts and experienced owners and practitioners can remove a lot of the uncertainty, stress and tension from the process.

Making a med spa business plan

A business plan isn't just an idea in your head of the medical spa that you want. It is a detailed document laying out the specifics of your goals and how you are going to achieve them. How are you going to structure your business? What treatments will you have? How much money will it take to launch and carry you through the first year? How will you ensure you're not just earning revenue, but remaining profitable with every treatment?

Building a medical spa business plan involves detailed financial planning, understanding the numbers and, step-by-step, laying out how you will get there.

On the financial side you should prepare things like:

1. Pro-forma income statement;
2. Pro-forma cashflow sheet;
3. Pro-forma balance sheet;
4. Yearly projections;
5. Expense analyses;
6. Supplies, product cost and waste analyses.

Tracking medical spa KPIs

When you think about the day to day operations of your business, it's easy to get lost in the checklist mentality of completing the day's tasks. That's why, before you get mired in accomplishing what you need to get through the day, you should set KPIs and identify trackable metrics to define a picture of overall, long-term, sustainable success for your business.

Getting a lot of patients in the door and completing daily tasks doesn't necessarily mean you will end the day with more money than you started with. Efficiency and profitability are key, so prioritize them by tracking things like:

• Net profit per treatment;
• Revenue per hour (per room and/or per provider);
• Conversion rates from marketing channels.
  

Read more on how to create your medical spa business plan and what KPIs you should be tracking in your practice.

Hiring and setting compensation in a medical spa practice

Hiring and compensation are two of the most important aspects of opening a medical spa. Building the right team is essential to providing great results to your patients, boosting retention and generating consistent revenue. How you structure your compensation and incentives, however, will determine your sustainability and growth, and can even affect your level of legal compliance.

Remember to be intentional when bringing on new team members. Try not to hire out of panic, desperation or dire need. Even if you are in a situation where a team member leaves and you need to fill a position immediately, hurrying to make the wrong hire can have a worse effect on your business than hiring nobody at all.

As you build out your job description and job posting have a clear idea of what you need out of the position, and specifically how that position contributes to the overall goal and vision you have for your practice. This includes both job duties and personality. What kind of person fits into the culture that you want to foster in your practice?

With compensation structures, it's important to incentivize your team, allowing them to share in the growth of the business. If you do this right you will be able to tie this figure to the overall success of the business, so you don't get into the position of paying more than your practice can afford.  It's vital to understand, however, that most medical spa treatments are viewed as the practice of medicine, and paying commission on medical treatments can be seen as fee-splitting by regulatory bodies.

Read more about hiring and compensation in medical spas, and dig deeper into the business strategies and metrics you need to open a medical spa.

3. Resources for opening a medical spa

For more help navigating the medical spa legal landscape, see AmSpa's online resources.

Med spa webinars

The AmSpa recorded webinar library is free for AmSpa Plus members, while AmSpa Basic members save 50% on all recordings. Stay tuned as we continually add new content regarding medical spa law, business and clinical best-practices.

View webinars like:

• Where Does Telemedicine Stand in 2024?
  
• Supervision and Delegation in Your Medical Spa
• The Basics of Medical Director Contracts
• Lessons and Examples from Health Care Patient Privacy Breaches and Fines
  

Medical Spa Insider podcast

Take an in-depth look at today's med spa entrepreneurs and what makes them successful. Listen to weekly stories from medical spa owners and professionals just like you, and get and insider's look at how some of the biggest brands in the industry approach the unique challenges of the medical spa space. Subscribe to Medical Spa Insider everywhere you listen to podcasts.

• How to Transition Your Marketing Strategy as Your Medical Spa Grows
• The Timelines and Considerations for Medical Spa Real Estate
• HIPAA: Steps to Compliance for Patient Comfortability and Profitability
• Solving Financial Mysteries with Data in Your Practice

Medical spa forms, SOPs and more

Find templates to standardize your med spa practices. AmSpa's form packages were made in partnership with the law firm ByrdAdatto.

These packages include:

• 24 Treatment Standard Operating Procedure Templates
• 19 Informed Consent Forms
• 16 Policies
• 11 Intake Forms
• 11 OSHA Forms
• 3 Safety and Cleaning Plans

AmSpa Plus members save 50% on all form template packages.

Maegen Kennedy's Journey to Med Spa Success

Maegen Kennedy, PA-C and owner of Windermere Medical Spa & Laser Institute charted her path to opening her practice, from a bare lot to the final build-out. See what it was like for her as she turned her vision into reality.

4. Medical spa business and legal training

For more in-person and in-depth coaching on how to open a medical spa, attend one of AmSpa's Medical Spa Boot Camps. Learn from experts who with years of experience in the industry, connect with owners and professionals who have walked your path before, build a network of med spa hopefuls just like you and get face time with some of the leading treatment, device and service companies in the space.

These two-day medical spa trainings can help you:

• Protect your business by teaching industry-specific, time-tested business strategies;
• Protect your license and the licenses of your practitioners by outlining the basics of medical spa legal compliance;
• Protect your peace of mind by connecting you with a network that is enthusiastic to support your growth;
• Protect your patients by setting you up to provide safe, legally compliant, responsible treatments every single day.