I am currently in the process of purchasing/partnership of an existing medical spa, but there is a lingering problem. I am a business woman and the owner is a doctor, I would like to know if this circumstance in having a non-doctor/doctor owned medical spa will be hindered by any legal issues? In short will there be more legal obstacles to deal with in partnering with a doctor to open up a medical spa as opposed to having it all non-doctor affiliated?? Your inputs are welcomed.

thanks,
Mary

First of all you need to know that the law if different in every state for ownership of a medical spa by a non-physician.

Most do not allow it. It will be very possible that if you partenr with a doctor and the doctor chooses to cut relations with you for any reason, he/she could take his patients and client list and leave you hanging. He can do this becasue he has the medical degree to practice medicine. An a medical spa is a medical practice.

Your function in this spa would be to manage the place and sell services/products. The fact that you are investing into it does not mean much. If the doctor leaves and takes his patients with him (he can do that) and decides he no longer want to be your partner, it is over for you. He will most likely have to pay you the amount that you put into the business if he keeps the name and the equipment etc.

Your role will be a limited partner. This physician can go out and hire a medical office manager and start the medical spa himself.

You would be better off starting a day spa where you have 100% control.

MD is right... mostly.

You will probably not want to open a regular day spa. The average margins are around 6% which is horrible for any business and especially when looked at from a physicians view with margins of 50-60%. (That's why your looking at a medical spa in the first place.)

You should also know that the doctor holds all the cards and that you can not 'partner' with him. All medical law is designed to prevent physicians from having to answer to any 'business entity'. So even if you have some powerful contract, it's generally uninforcable when dealing with a physician. It does not matter at all that the doctor agrees or accepts the conditions. He can't be bound even if he agrees.

You can not own a medical practice or 'hire' a physician. That's called, "practicing medicine without a license."

I'd carefully read all of the posts on this site about partering with docs, legal, starting up, etc. They're spot on.

Hopefully, that "how to build a legal medical spa page" is going to be up soon. Good luck.

Dear MD, LurkerDoc,


Thanks for your inputs. I appreciate it. I am aware that most med spa's that are owned by a non-doctor,are hiring med-directors and therefore have build a legal corporate structure that allows a physician (med-director) & non-physician to work together in a medical spa.

The current Med-spa is owned by a doctor, but he is not practicng in that spa. He is playing the role of a med-director. We are planning to keep it same. As MD said, i will manage/run the place.

Don't all the doctors (medical directors) in current med-spas that are owned by non-physicians hold all the cards anyway?

Thanks again,
Mary

Mary,
You should check out the Medical Board of CA report that recently was posted. It is NOT legal for a non doctor to own a medical practice of any kind (medi-spa or otherwise). Although you think that everybody is doing it it IS ILLEGAL. The fact that your MD won't work there and is just a name on the door is practicing medicine without a medical license. Also not legal. Check out the July 2006 Action Report on the Ca board website

http://www.medbd.ca.gov/Pubs_Actionrept_2006_07.pdf

You might think twice before buying in to the medical business

I was just recently directed to this site and have been reading it closely. I'm Boarded in Emergency Medicine and own my own medi-spa (so no conflict), but I'm confused about the lingo about fee-splitting and being employed by a corporation as in my practice of Emergency Medicine, I >>am<< employed by a corporation and directed by them what to do. How is being employed by a medi-spa as a medical director different? To clarify, how would working for someone, like say, Kaiser Permanente be different from working for Radiance MediSpa?

Hi VirginiaMD,
This is how it was explained to me by a lawyer who practices specifically in this area.

"He who has the gold, makes the rules."

It seems that if the corporation is large enough they lobby for loopholes. As an individual doc it's illegal. If your having dinner at the governer's mansion... you get a pass. It's that simple.

However, (according to the lawyers again) there is no legal way for you to do the same thing. None.

Also, if you're working for one of the franchises, they set it up so that you're an independant contractor, not an employee. That's my two cents.

In Florida, our corporation is the med spa, an independent contractor the doctor. Florida is a corporate practice of medicine state so this is okay.

In CA, what I have seen others do is establish a corporation that sets up, runs and maganages medical practices for a fee for the doctor. The corporation is employed by the doctor. However, the corporation's fee is generally huge leaving the doctor with a typical director's cut.

As for who holds the power, it depends on the circumstances. If the doctor is an independent contractor the corporation is free to fire/hire at will. If the doctor is the main person doing the procedure she can easily take the clients with her if they are loyal to her. Legally,patient charts belong to the doctor.

Sounds like your best bet is to simply get a fee from the current MD owner to be the management company. Why purchase the equipment, assume the lease, bills, etc. if the doctor still owns it?