Spa movement grows in size, scope

August 1, 2005

National report — Fueled by consumer demand, equipment availability and operators' entrepreneurial spirits, the medical spa movement has taken off during the past decade.

"The medical spa industry has doubled in size in the last four or five years, and will double again in the next two years," says Eric Light, president of the International Medical Spa Association and president of Strawberry Hill Group, a consulting firm that specializes in medical spas. "It should break the $1 billion barrier by the end of 2005 or early 2006. It now represents approximately 10 percent of the overall spa industry" if one combines pure medical spas, laser hair removal facilities, spas that are attached to doctors' offices and those now being built into resorts.

"As American medicine became more scientific," he says, "doctors were told they could not be in the spa business."

Physicians enter market

Over the past 10 to 15 years, a growing number of physicians also have entered the fray, drawn largely by the promise of managed-care-free profits.

"From a doctor's perspective," Mr. Light says, "this is a cash business. There are no insurance companies, no delays in payment. For a doctor, it's a much more manageable practice. In terms of revenue and time spent, the return on investment for a doctor is tremendous." He estimates the average spa-owning doctor can earn between $250,000 and $350,000 yearly - much more in major metropolitan markets - while working in a social rather than critical-care setting.

Commercial concerns

According to David H. McDaniel, M.D., director of the Laser Skin & Vein Center of Virginia in Virginia Beach, Va., when properly supervised and executed, "The medical spa concept is a great idea. However, while some view a medical spa as a specialized staff and venue to deliver innovative medical services cost-effectively in a comfortable environment, others view a medical spa as simply a business venture or a source of new patients to 'feed' their plastic surgery practice."

He expresses similar concerns about the small but growing number of franchisers that have entered the medical spa market in recent years.