Building A Medical Spa Inside A Doctors Office: The Physicians Conundrum
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Everywhere, physicians are contemplating or engaged in expanding into
the "medical spa" market. Seduced by the industry buzz around this
hot new phenomenon, many doctors see the medical spa as a means to
boost their income and eliminate the grind and countless headaches of
their daily practice. They read about growth statistics, see dazzling
new equipment at trade shows, watch competitors popping up, and fear
that they may be falling behind the times. With pen in hand they're
ready to sign lease agreements, loan documents and lots of checks in
order to catch up with a crowd of savvy entrepreneurs who know where
the real action is. And the truth is that they may be right. Medical
spas are the natural evolution of cosmetic medicine, and those who
don't join the revolution will watch from the sidelines as their fate
is decided.
Medical spas are the forerunner of a revolution in cosmetic medicine.
>From Galen until now, the primary method of care has been through the
skilled hands and individual knowledge of a physician. But that's
changing. The default method of care is becoming technology-based. Just
as inn every other market, technologies are developed that replace an
individual's knowledge and skill.
Lasers, IPLs, radio frequency, infrared, personal DNA testing, Pointe
Lift™, Liposolve™, Clear², PDT, telomere clipping, recumbent DNA
technologies, bio-identical hormone balancing, anti-aging drugs, and a
smorgasbord of other technologies in development promise to change
medicine in the same way that computers, jet engines, and GPS have
changed aviation. Technology now enables a technician (under medical
supervision) to perform effective medical treatments and places the
physician in a decision making and supervisory roll instead of being
the primary practitioner. In the near future, physicians will have more
in common with Neil Armstrong than the Wright Brothers.
Changing technology poses very deep problems for physicians. Technology
allows easy replication and scalability, forces an unimaginably steep
new learning curve on overworked doctors, and eliminates many of the
barriers and protections that physicians have relied on in the past.
And it's only going to get worse.
Consider this. The combination of markets that medical spas compete in
is huge ($40 - $50 billion per year and growing), highly fragmented
(individual practitioner model), completely new (technology-based), and
up to now, is free of any meaningful national players (yet). Already
there are very deep pockets investigating ways to exploit this emerging
marketplace. The Wal-Marts and Home Depots of this new medical
marketplace are being built as you read this article.
But there's opportunity here as well. Technology opens new doors for
physicians, who can see and manage this new paradigm. That's why a
ready supply of smart and motivated physicians tired of the daily grind
of insurance patients are moving into the marketplace and successfully
competing. For the first time, physicians outside the default
specialties of plastic surgery (cutting and stitching) and dermatology
(diseases of the skin) have the potential to earn the income and
lifestyle of these two medical specialties. This new market is
inevitably giving rise to a new specialty whose focus will be
"non-surgical, cosmetic, medical technologies." You can see the
fragmentation today. Many dermatologists now label themselves as
"cosmetic" to distinguish themselves as a subspecialty.
As a physician, you can't get enough good information fast enough.
This is a new business and demands a huge investment of time to make
the right decisions. Sales reps will stream into your office armed with
charts and graphs with arrows pointed ever upward, advertisers will
drop phrases like "top of mind awareness," and you'll begin to have
a creeping suspicion that the market is getting away from you. Go slow.
There are a host of land mines in the area and there are some that will
be advising you to jump directly on them.
So, how do you build a medical spa inside your existing practice? The
good news is it can be done. Surface Medical Spas has three locations
(with three more in development), four physicians, master
aestheticians, technicians, patient coordinators, managers and office
staff. Every treatment at Surface is governed by a set of proprietary
protocols. As a business, we have advised dozens of individual
physicians, managers, and investors around the world about opening and
operating medical spas. Be advised this is not easy, but here are a few
suggestions.
Physician heal thyself: This is your business. Consultants make their
money by telling others how to run businesses that they don't or
can't run themselves. Believe me, any medical spa consultant worth
hiring would be running their own medical spa. Many of these so-called
consultants will tell you that you need to offer massage, retail should
be 30%-40% of your gross sales, and you'll need hydrotherapy,
aromatherapy, and maybe a juice bar. Wrong. The day that retail is 30%
of our gross sales I'll eat my left foot. Our retail is around 3%
because retail is the least effective and profitable thing we do. If it
ever gets to 5% we'll cut back. If this is going to be your business,
make your own decisions.
Find someone smarter than you: The most important step is good
management. Without that, people can, and have, lost everything. If you
don't have good management skills, hire someone from outside the
medical world. We get calls from interested physicians, investors and
businesses around the world and we take the time to talk to them all
for free. Successful businesses will be happy to talk to you and give
you some advice.
Franchises: "Turn key solutions." That's how almost everything is
marketed to physicians. Buy this technology, hire this personnel, run
these ad slicks, and everything will fall into place. Sorry. It
doesn't work that way. Most of these franchises are sold as a
"we've already worked out the kinks" deal. It's a lie.
Franchises focus on the treatments that everybody else will be able to
replicate with ease. It's more a case of, "In the kingdom of the
blind, the one-eyed man is king." You don't need any of the current
franchises.
All technology is not created equal: Despite what company reps will
tell you, choosing the right technology will create big differences at
the end of the year. Efficacy, cost per treatment, initial costs,
usage, and a long list of other considerations should go into
technology decisions. Many physicians all too quickly jump and then end
up with $80,000 towel racks that they still have to make payments on
every month. Used medical devices are readily available from the
constant stream of bankruptcies and failed medical practices. Choose
your technology carefully.
Understand the marketplace: Medical spas are a luxury business. For
most physicians, it comes as an unwelcome surprise that their new
patients are more demanding. Long waits, shabby offices, poor
communication, and ambivalent staff, are all in the past. If you're
touting yourself as a luxury service, you better act like one. Hire
top-notch people that are service-oriented, friendly and courteous.
Protocols can be taught easier than attitude.
Rein in your ego: This is business. It's not personal. If you feel
you must charge twice as much as your competitors because you
"deserve it," get used to empty appointment book.
Do not use "advanced" or "laser" in your name: The number of
"advanced" laser clinics is staggering. Don't do it. It's
inane, overused, and bland. I actually had a physician ask me if
changing his name from Advanced Laser Centers to Advanced Laser Group
would get him more business.
Network with successful medical spas: Successful business owners are
happy to help newcomers to the industry. We have constant dialogue with
physicians and investors who are investigating the marketplace and have
advised clinics on four continents. Successful medical spas will be
happy to build bridges with smart businesses.
Don't look to day spas to solve your problems: Physicians hear
"spa" and immediately think that day spas have the answers
they're looking for. Wrong. Most day spas can't run themselves. The
average net margins for day spas are around 8%. The average
physician's is around 60%. Physicians running day spas are entering a
business that they; know nothing about, doesn't make any money, is
highly competitive, has no barriers to entry, and is rife with employee
and other problems. Don't do it.
Don't base your pay on commission: Commissions sound like a great
solution. You save overhead and motivate your staff to grow the
business. False. Commissions are used in spas to keep overhead low. But
guess what? Staff members working for commission aren't working for
you. Commissions lead to overly aggressive staff, constant drama, and
high employee turnover that can hurt your reputation.
Don't gild the Lily: You may have heard that you have to spend a
fortune to "build out" your clinic. Nope. You don't have to start
with treatment tables that have your clinics name embossed on them.
Spend all your money before you open and you won't be able to spend it
where you'll really need it... getting patients in the seats.
Stay lean: Physicians practice medicine based on science. You don't
need to offer pedicures and you don't know anything about them anyway.
Stick to the basics.
If you're already in the market of just investigating the
possibilities, I hope I've been of some help. Good luck in you new
endeavor.
More information and before and after pictures are available online at
wwww.surface-med.com