5 top risks faced by medical spas and how to mitigate them

June 12, 2024   |   Medical Spa

Medical spas are exploding in the United States, which makes recognizing the top risks faced by med spa owners essential. In 2022, there were 8,841 medical spas, up from 7,430 in 2021 and 5,431 in 2018. The medical spa industry was projected to garner as much as $20 billion in revenue in 2023, double from four years prior. 

Click here to read The Ultimate Guide to Starting Your Own Medical Spa

With that growth come challenges and risks. Before entering the med spa industry, it’s important to focus on understanding risks and how to mitigate them. From patient safety to compliance issues, med spas must set up the practice to ensure their success and protect patients. 

The first step in protecting your medical spa business and employees is selecting the right insurance carrier. This decision should be more than an item to check off the list. The right insurance carrier is a proactive partner in helping your med spa reduce risk, rather than just serving as a reactive partner to an incident, says Brittney Stinnett, BSN, MS, a commercial insurance advisor at HUB International. “We collaborate on providing guidance and leadership on insurance risk, as well as looking at strategic and operational risks for a company.”

With years of experience helping healthcare practice owners reduce risk and respond to those incidents that do occur, Stinnett offers five of the top risks for medical spas and how to mitigate them. Because it can be overwhelming for clinicians transitioning into business owners to address many risks simultaneously, she recommends breaking action items down into manageable steps. “We perform a thorough risk workshop with all decision-makers to help owners diagnose top priorities and address them effectively,” she says.

1. Patient safety


Ensuring patient safety is paramount to med spa success, as treatments often involve medical procedures that can have serious consequences if not performed correctly. For example, when administering Botox, it’s possible to hit a nerve, and there are burn risks in laser procedures. Unsanitary equipment and allergic reactions are also risks.

Mitigation strategies:

  • Staff training: Invest in comprehensive staff training and certification programs. Ensure all employees are well-versed in their procedures and understand the importance of maintaining a sterile environment. “Investing in staff training, onboarding and continuing education is crucial for maintaining a safe environment,” says Stinnett.
  • Review patient medical history: Conduct thorough initial patient consultations to gather detailed medical histories, including any allergies or previous adverse reactions to treatments.
  • Standardized protocols: Develop and implement standardized protocols for all procedures. Use checklists to ensure every step is followed correctly and consistently. “Nurses are used to performing checklists, so make sure that they have one for every procedure and feel confident when they are on their own,” says Stinnett.

2. Regulatory compliance


Med spas must adhere to many Federal and state regulations, which can be complex and frequently updated. Failure to comply can result in fines, legal action and even closure of the facility.

Mitigation strategies:

  • Stay informed: Regularly update your knowledge of local, state and federal regulations for med spas. This includes licensing requirements, treatment protocols and billing practices.
  • Legal partnerships: Many new med spa owners balk at the price of a business attorney, but the cost of a legal error can be far more costly. Partner with healthcare attorneys who understand med spa regulations. They can provide valuable guidance in case of a claim.
  • Internal audits: Conduct regular internal audits to identify and address any compliance issues promptly. This proactive approach helps prevent regulatory breaches.

3. Employee risk


Employees are crucial to your med spa operations, but they also represent a significant risk. This includes risks of hiring unqualified staff, mishandling patient information and harassment. “Employee risk is significant. You need to know who you’re hiring and ensure they handle patient information with high integrity,” says Stinnett.

Mitigation strategies:

  • Background checks: Conduct thorough background checks during the hiring process to ensure employees are qualified, have proper credentials and have a history of integrity.
  • Track licensure expiration: Be sure employees’ licenses stay up to date, especially as your med spa grows.
  • Cyber security training: Provide ongoing security training to staff to ensure the safe handling of patient information and prevent data breaches.

4. Treatment risk


The med spa industry continuously introduces new and innovative treatments. However, these treatments can pose risks if not performed correctly or if they have unforeseen side effects.

Mitigation strategies:

  • Certifications and training: Ensure all staff members receive proper training and certification for new treatments. This includes hands-on training and any necessary certification.
  • Monitoring outcomes: Regularly monitor treatment outcomes and maintain detailed records. Identify any recurring issues and adjust practices accordingly.

5. Unreasonable patient expectations


Patients often have high expectations for aesthetic treatments. If treatment outcomes do not meet these expectations, it can lead to dissatisfaction, negative reviews and even legal action.

Mitigation strategies:

  • Setting realistic expectations: During consultations, take the time to explain what each treatment can and cannot achieve.
  • Patient communication: Clearly communicate potential risks and side effects before administering treatments. Use informed consent forms to document that patients understand and accept these risks.
  • Follow-up care: Offer follow-up appointments to assess results and address any concerns. Ongoing care can improve patient satisfaction and loyalty.

Even when doing everything possible to mitigate risks, incidents are likely to occur in any medical spa business. It’s crucial to have proper insurance to cover your med spa and to report any potential incident to your carrier immediately.

Click here to download an incident report.

Insurance policies to consider for a med spa include the following:

  • Professional liability insurance for your entity and for employees
  • Property insurance
  • Employee practices insurance
  • Employee workers compensation
  • Cyber insurance
  • Auto insurance hired and non-owned 

Like any clinic, medical spas face risks that require careful management. By focusing on patient safety, regulatory compliance, employee management, treatment protocols and setting realistic expectations, med spas can mitigate these risks effectively. Implementing these strategies not only protects the business but also enhances the overall patient experience, fostering trust and loyalty.

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