Insurers, underwriters try to relax with medispas

In a world where one-stop shopping is the norm, it makes sense that consumers now demand cosmetic and medical services be blended and offered in one location. With no extra travel and no extra hassle, a one-stop, beauty overhaul the medispa has been born. Whether the customer is seeking a massage, a botox treatment or a chemical skin peel, all can services be performed in one medispa location.

The integration of medicine, therapeutics and cosmetics has become increasingly popular in the past five years. There are 7,000 spas nationwide, although the exact number of specifically deemed “medispas” is uncertain.
The trend presents challenges for insurance underwriters who say medispas need specialized medical professional liability coverage.

Medispas do not look like typical doctors’ offices, but many are run and owned by physicians. Others have non-medical owners.

The variances among medispas and their offerings make writing coverage challenging. The gamut of services include aromatherapy, body wax and oxygen bars. Some medispas use cutting-edge Western medical techniques along with Eastern healing and relaxation practices.

Because both medical and non-medical personnel administer treatments, lines can blur as to who and what is covered by insurance. Most medispa accounts are written by specialty insurance companies that write medical, medical malpractice or professional liability insurance.

While medispas vary in the services offered, the most popular are botox injections and laser hair removal. “Botox injections and hair removal therapies are very affordable, and therefore very popular,” noted Leslie Snider, vice president of American Underwriting Managers, based in Southlake, Texas.

Writing a liability package for a beauty shop offering hair and nail services is very different from writing a medispa owned and operated by a dermatologist who performs some procedures but has nurse practitioners or physician assistants doing other services, Snider says.

In some states, lawmakers have stepped in to set rules for medispas, a development that is making underwriting easier.

“Legislation passed in some states has been helpful in defining coverages,” Snider explained. “It is good to know that someone cannot just hang a shingle outside of storefront and begin to perform medical services.”

Shand Morahan, a wholesale-dedicated surplus lines underwriting company, agreed that legislative oversight is useful.

“States are all over the place with regulation of medispas,” said Pamela Robertson, associate product manager for Shand Morahan in Deerfield, Ill. “In Ohio, you have to be a physician to perform any type of laser treatment, but that legislative mandate doesn’t necessarily exist in other states.”
Medispa industry representatives are not as fond of regulation.

“Although we believe training and supervision of certain services is important, we don’t want the industry over-regulated,” said Gina Meyer, membership chair of the advisory board of The International Medical Spa Association, based in New Jersey.

John Buckingham, founder and CEO of Solana MediSpas in Newport Beach, Calif., which operates 40 medispas in the United States, believes regulation reflects physicians’ attempts to protect their interests.

“A lot of the procedures in medispas are non-invasive and can be safely handled by trained and accredited professionals who are not physicians,” Buckingham said. “The real issue is setting up good accreditation standards for the industry. Right now, dermatologists and internal medicine specialists are backing legislation that requires that only doctors perform the procedures or that a physician be onsite to oversee the procedure.”

Nevertheless, Buckingham agreed that laws governing safety and training for consumers need to be updated.

“The risk of a procedure is definitely connected to the level of training of the person who is administering the service,” Snider said. Snider agreed training and accreditation is important, but believed the “safety net” of defining legislation in the states remains important to protect operators, as well as the consumers flocking to medispas every year.

Topics Carriers Legislation Underwriting Training Development