Do You Have to Be a Doctor to Own a Medical Spa?

by | Sep 27, 2019 | Education Feature

Owning your own medical spa can be an excellent venture for an entrepreneur. Medical spas are popular and often lucrative, leaving you with only one important question that needs to be answered: do you have to be a doctor to own a medical spa?

The bad news

The answer to this question is complicated, and understanding it starts with knowing the law. Most states prohibit something known as the corporate practice of medicine doctrine (at least in part).

This doctrine allows non-physicians to to have control over medical procedures and accept payments. By banning the corporate practice of medicine, most states are basically saying that only licensed physicians may accept money for a medical procedure.

By their very nature, medical spas offer medical treatments, meaning that this rule will usually apply. The rules against non-physicians having control over a place that offers medical services are strictest in California, Colorado, Illinois, Iowa, New Jersey, New York, Ohio, and Texas.

The good news

The good news that other states aren’t so strict, and even the states listed above have many exceptions to the rule so long as you know where to look. The most common way to get around the issue is to set up a medical management organization, or MSO, and then partner with a physician or physician-owned group to open your medical spa.

Through your MSO, you can have control over everything that isn’t considered a medical procedure: branding and marketing, billing and accounting, human resources and payroll, any non-medical cosmetic procedures, and the real estate. The physician or physician-owned group will always have the final word over all medical procedures.

What to know

Opening a medical spa as an MSO in partnership with a physician can minimize risks for both of you. The physician doesn’t have to worry about liability for the facility or its contents, real estate, or payroll issues for the spa’s employees.

Meanwhile, your MSO makes money through offering medical services on site, receives payment from the physician (much like you would from a tenant), and bears no liability in any lawsuit or malpractice case brought against the physician.

How to start your medical spa

Be smart about equipment: Buying the wrong laser machine or sinking all your money into brand new machines when used ones will do can quickly eat away at your finances. Visit sites like to find quality equipment.

Get an attorney: The ins and outs of an MSO are complicated. The laws are sometimes unclear, and the process of setting up your MSO and entering into partnership with a physician has to be done just right if you want to succeed. Your best bet is always to hire an attorney with relevant experience.

Nail your concept: You can’t offer every treatment out there. Decide what you want to specialize in and build a solid foundation. Once you are making money and are ready to grow, you can consider adding on new services.

Don’t skip your market research: Take the time, and make the investment, to find out what people really want and how you can provide it. Consider your location carefully. Spas need to be in just the right spot to compete, but people will come voluntarily to doctors’ offices. You’re a bit of both, so do your due diligence about zoning, regulations, parking, street frontage, and signage to understand what offers you the best shot at profitability.

Work hard at integration: You don’t want a spa that just shares some building space with a medical office. You want a seamless merger of the two. This requires communication and lots of planning, right down to the details of building construction or site renovation. If you put in the effort, however, you can open a successful medical spa of your own.

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