Podcast
Questions and Answers
What is the projected growth of the aesthetic industry from 2022 to 2028?
What is the projected growth of the aesthetic industry from 2022 to 2028?
From $23.2 billion in 2022 to $25.3 billion in 2028
What is the value of the IV Therapy, skincare, and cosmetic products market in 2022?
What is the value of the IV Therapy, skincare, and cosmetic products market in 2022?
$15 million
What type of businesses are private equity firms looking to acquire?
What type of businesses are private equity firms looking to acquire?
Successful aesthetic practices with multiple locations across multiple states
Why is protecting intellectual property crucial for a successful business?
Why is protecting intellectual property crucial for a successful business?
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What type of agreements can help protect a business?
What type of agreements can help protect a business?
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What type of laws and regulations do aesthetic practices need to comply with?
What type of laws and regulations do aesthetic practices need to comply with?
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What is required to oversee medical aesthetic treatments?
What is required to oversee medical aesthetic treatments?
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What type of enforcement actions have state attorney generals taken against non-clinicians?
What type of enforcement actions have state attorney generals taken against non-clinicians?
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What has the weight loss space faced recently?
What has the weight loss space faced recently?
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What is expected to continue in the medical aesthetic space?
What is expected to continue in the medical aesthetic space?
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What is expected in terms of legislation in the industry?
What is expected in terms of legislation in the industry?
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Why is it crucial for businesses in the industry to ensure compliance with laws and regulations?
Why is it crucial for businesses in the industry to ensure compliance with laws and regulations?
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What can franchise models offer to businesses in the industry?
What can franchise models offer to businesses in the industry?
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What is important for businesses in the industry to do to stay informed?
What is important for businesses in the industry to do to stay informed?
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What is expected to happen to the aesthetic industry in terms of regulations?
What is expected to happen to the aesthetic industry in terms of regulations?
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What type of practices will likely see targeted legislation in the medical aesthetic industry?
What type of practices will likely see targeted legislation in the medical aesthetic industry?
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What is the concern with compounding injectables in the medical aesthetic industry?
What is the concern with compounding injectables in the medical aesthetic industry?
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What is the importance of compliance in the medical aesthetic industry?
What is the importance of compliance in the medical aesthetic industry?
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Who needs to be supervised in the medical aesthetic industry?
Who needs to be supervised in the medical aesthetic industry?
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What is the importance of setting up a practice correctly in the medical aesthetic industry?
What is the importance of setting up a practice correctly in the medical aesthetic industry?
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What can result in enforcement actions in the medical aesthetic industry?
What can result in enforcement actions in the medical aesthetic industry?
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What is the importance of keeping an eye on legislation and updates in the medical aesthetic industry?
What is the importance of keeping an eye on legislation and updates in the medical aesthetic industry?
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What is the impact of Connecticut law on medical aesthetic providers?
What is the impact of Connecticut law on medical aesthetic providers?
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What may impact the use of non-competes in W2 relationships in the medical aesthetic industry?
What may impact the use of non-competes in W2 relationships in the medical aesthetic industry?
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Study Notes
Aesthetic Industry Trends and Legal Complexities
- The aesthetic industry is booming, with a projected growth from $23.2 billion in 2022 to $25.3 billion in 2028.
- The IV Therapy, skincare, and cosmetic products market was valued at $15 million in 2022, excluding laser and other treatments.
Private Equity Trends
- Private equity firms are consolidating aesthetic practices, medical spas, and weight loss clinics to gain a larger market share.
- The target sellers are successful aesthetic practices with multiple locations across multiple states.
- Private equity firms are looking to acquire businesses that can be scaled up and replicated across different regions.
Preparing for a Private Equity Sale
- Designing a business with private equity in mind can help owners build a strong, scalable, and durable business.
- Protecting intellectual property, including trademarks, copyrights, and patents, is crucial for a successful business.
- Non-solicitation and non-competition agreements with vendors and employees can also help protect a business.
Legal Complexities in the Aesthetic Industry
- Aesthetic practices are subject to state regulations and laws, including corporate practice laws.
- A medical director is required to oversee medical aesthetic treatments, and management services organizations (MSOs) can help with compliance.
- Insurance policies, including professional liability, commercial, and general umbrella liability insurance, must be aligned with the business structure.
- Malpractice coverage for employees and medical directors must also be considered.
Enforcement Actions and Investigations
- The FDA has issued warning letters about unapproved supplements and injections.
- State attorney generals have increased enforcement actions against non-clinicians providing medical procedures outside of their scope.
- Examples of enforcement actions include fines and prohibition of services for estheticians and cosmetologists providing unauthorized treatments.
Future Outlook
- The aesthetic industry is expected to become more regulated, with increased enforcement actions from state attorney generals and licensing boards.
- States may introduce legislation specifically targeting aesthetic businesses.
- Operators must understand the laws and regulations in each state and ensure compliance to avoid enforcement actions.### Medical Aesthetic Industry Regulations
- Aesthetic practices operating in a gray area within laws applicable to other medical practices will likely see targeted legislation.
- State Pharmacy boards have issued warnings about compounding drugs and those not in full supply.
- Compounding injectables requires awareness of restrictions, especially in IV hydration infusion and regenerative medicine spaces.
Crackdown on Medical Aesthetic Practices
- State Regulators, such as Pharmacy boards, are cracking down on non-compliant practices, e.g., physical plant requirements, air space, and hood size.
- Examples of complex regulations:
- PRP (Platelet Rich Plasma) treatments require registration as an exempted practice or meeting specific state requirements.
- Blood fluid storage makes aesthetic practices subject to regulations.
Importance of Compliance
- Businesses must ensure compliance with rules and regulations in their jurisdiction, especially when adding new service lines.
- Enforcement actions can lead to business shutdowns, as seen in cases involving unapproved fat reduction injections.
Scope of Practice and Registration Requirements
- Know who can provide services and who needs to be supervised.
- Understand scope of practice rules, registration requirements, and supervision restrictions.
- Examples of complex regulations:
- RNs may perform services but require supervision by an MD, DO, or NP.
- Limitations on the number of RNs that can be supervised by an MD, DO, or NP.
Setting Up a Practice
- Set up the practice correctly, considering corporate practice of medicine, scope of practice rules, and structural requirements.
- Utilize an MSO (Management Services Organization) model to separate medical and non-medical entities.
- Ensure compliance with state-specific rules and regulations.
Enforcement Actions
- Enforcement actions can result from structural issues, scope of practice violations, and supervision requirements.
- Examples of enforcement actions:
- State Attorney General involvement in shutting down non-compliant practices.
- Fee-splitting laws and regulations governing management fees.
Examples of State-Specific Regulations
- New York State prohibits management fees based on a percentage of income or receipts from a medical practice.
- New Jersey regulations:
- Only MDs and DOs can technically use lasers.
- Laser use is a widespread violation of scope of practice.
- Connecticut's medical spa law:
- Requires higher-level providers (MD, DO, PA, or NP) on site or employed by the medical spa.
- Requires an initial physical examination by a higher-level provider before treatment.
Importance of Legislation and Updates
-
Keep an eye on legislation and updates in the medical aesthetic industry.
-
Examples of proposed legislation:
- Expanding scope of practice for laser use in New Jersey.
- Connecticut's medical spa law.### Medical Aesthetics Industry Regulations
-
Connecticut law requires medical aesthetic providers to undergo an initial physical exam by a licensed healthcare provider, highlighting the importance of compliance with state-specific laws.
Non-Competition Agreements
- The Biden Administration has instructed the FTC to propose a rule banning non-competition agreements in most employment contexts, which may impact the use of non-competes in W2 relationships to protect brands and patient bases.
- Existing non-compete agreements may be required to be rescinded, and businesses will need to find alternative ways to protect themselves, such as using employment policies and IP protection.
Weight Loss Space Controversy
- The weight loss space has faced controversy, including shortages of certain drugs, compound pharmacy issues, and off-label prescribing warnings.
- Insurers and manufacturers have issued warning letters, and state boards of pharmacy have reminded pharmacies about proper compounding requirements.
- New telehealth models are being developed to address prescribing requirements, and a deeper dive into this topic is planned for a future webinar.
Industry Trends and Expectations
- Private equity interest and startup growth in the medical aesthetic space are expected to continue.
- Increased state attorney general and FDA actions on drug usage, scope of practice, and business structure are anticipated.
- More legislation aimed at regulating the industry is expected, particularly at the state level.
- State boards, including medical examiners, cosmetology boards, and nursing boards, are increasing enforcement actions.
Compliance and Staying Informed
- Ensuring compliance with laws and regulations is crucial, and staying informed about changes in the industry is essential.
- Regulations can be difficult to find and interpret, and AI tools are not yet reliable sources of information.
- Consulting with a knowledgeable attorney can help businesses navigate the complex legal landscape.
- Franchise models may offer resources and support, but it's essential to carefully evaluate the franchise and ensure it's compliant with healthcare laws.
Aesthetic Industry Trends and Legal Complexities
- The aesthetic industry is projected to grow from $23.2 billion in 2022 to $25.3 billion in 2028.
- The IV Therapy, skincare, and cosmetic products market was valued at $15 million in 2022, excluding laser and other treatments.
Private Equity Trends
- Private equity firms are consolidating aesthetic practices, medical spas, and weight loss clinics to gain a larger market share.
- Target sellers are successful aesthetic practices with multiple locations across multiple states.
- Private equity firms aim to acquire businesses that can be scaled up and replicated across different regions.
Preparing for a Private Equity Sale
- Designing a business with private equity in mind helps build a strong, scalable, and durable business.
- Protecting intellectual property, including trademarks, copyrights, and patents, is crucial for a successful business.
- Non-solicitation and non-competition agreements with vendors and employees can also help protect a business.
Legal Complexities in the Aesthetic Industry
- Aesthetic practices are subject to state regulations and laws, including corporate practice laws.
- A medical director is required to oversee medical aesthetic treatments, and management services organizations (MSOs) can help with compliance.
- Insurance policies, including professional liability, commercial, and general umbrella liability insurance, must be aligned with the business structure.
- Malpractice coverage for employees and medical directors must also be considered.
Enforcement Actions and Investigations
- The FDA has issued warning letters about unapproved supplements and injections.
- State attorney generals have increased enforcement actions against non-clinicians providing medical procedures outside of their scope.
- Examples of enforcement actions include fines and prohibition of services for estheticians and cosmetologists providing unauthorized treatments.
Future Outlook
- The aesthetic industry is expected to become more regulated, with increased enforcement actions from state attorney generals and licensing boards.
- States may introduce legislation specifically targeting aesthetic businesses.
- Operators must understand the laws and regulations in each state and ensure compliance to avoid enforcement actions.
Medical Aesthetic Industry Regulations
- Aesthetic practices operating in a gray area within laws applicable to other medical practices will likely see targeted legislation.
- State Pharmacy boards have issued warnings about compounding drugs and those not in full supply.
- Compounding injectables requires awareness of restrictions, especially in IV hydration infusion and regenerative medicine spaces.
Crackdown on Medical Aesthetic Practices
- State Regulators, such as Pharmacy boards, are cracking down on non-compliant practices, e.g., physical plant requirements, air space, and hood size.
- Examples of complex regulations:
- PRP (Platelet Rich Plasma) treatments require registration as an exempted practice or meeting specific state requirements.
- Blood fluid storage makes aesthetic practices subject to regulations.
Importance of Compliance
- Businesses must ensure compliance with rules and regulations in their jurisdiction, especially when adding new service lines.
- Enforcement actions can lead to business shutdowns, as seen in cases involving unapproved fat reduction injections.
Scope of Practice and Registration Requirements
- Know who can provide services and who needs to be supervised.
- Understand scope of practice rules, registration requirements, and supervision restrictions.
- Examples of complex regulations:
- RNs may perform services but require supervision by an MD, DO, or NP.
- Limitations on the number of RNs that can be supervised by an MD, DO, or NP.
Setting Up a Practice
- Set up the practice correctly, considering corporate practice of medicine, scope of practice rules, and structural requirements.
- Utilize an MSO (Management Services Organization) model to separate medical and non-medical entities.
- Ensure compliance with state-specific rules and regulations.
Enforcement Actions
- Enforcement actions can result from structural issues, scope of practice violations, and supervision requirements.
- Examples of enforcement actions:
- State Attorney General involvement in shutting down non-compliant practices.
- Fee-splitting laws and regulations governing management fees.
Examples of State-Specific Regulations
- New York State prohibits management fees based on a percentage of income or receipts from a medical practice.
- New Jersey regulations:
- Only MDs and DOs can technically use lasers.
- Laser use is a widespread violation of scope of practice.
- Connecticut's medical spa law:
- Requires higher-level providers (MD, DO, PA, or NP) on site or employed by the medical spa.
- Requires an initial physical examination by a higher-level provider before treatment.
Importance of Legislation and Updates
- Keep an eye on legislation and updates in the medical aesthetic industry.
- Examples of proposed legislation:
- Expanding scope of practice for laser use in New Jersey.
- Connecticut's medical spa law.
Medical Aesthetics Industry Regulations
- Connecticut law requires medical aesthetic providers to undergo an initial physical exam by a licensed healthcare provider, highlighting the importance of compliance with state-specific laws.
Non-Competition Agreements
- The Biden Administration has instructed the FTC to propose a rule banning non-competition agreements in most employment contexts, which may impact the use of non-competes in W2 relationships to protect brands and patient bases.
- Existing non-compete agreements may be required to be rescinded, and businesses will need to find alternative ways to protect themselves, such as using employment policies and IP protection.
Weight Loss Space Controversy
- The weight loss space has faced controversy, including shortages of certain drugs, compound pharmacy issues, and off-label prescribing warnings.
- Insurers and manufacturers have issued warning letters, and state boards of pharmacy have reminded pharmacies about proper compounding requirements.
- New telehealth models are being developed to address prescribing requirements, and a deeper dive into this topic is planned for a future webinar.
Industry Trends and Expectations
- Private equity interest and startup growth in the medical aesthetic space are expected to continue.
- Increased state attorney general and FDA actions on drug usage, scope of practice, and business structure are anticipated.
- More legislation aimed at regulating the industry is expected, particularly at the state level.
- State boards, including medical examiners, cosmetology boards, and nursing boards, are increasing enforcement actions.
Compliance and Staying Informed
- Ensuring compliance with laws and regulations is crucial, and staying informed about changes in the industry is essential.
- Regulations can be difficult to find and interpret, and AI tools are not yet reliable sources of information.
- Consulting with a knowledgeable attorney can help businesses navigate the complex legal landscape.
- Franchise models may offer resources and support, but it's essential to carefully evaluate the franchise and ensure it's compliant with healthcare laws.
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Description
Explore the growing aesthetic industry, including market trends and private equity firms' consolidation strategies. Learn about the projected growth and valuation of the industry segments.
