Should your primary care practice add Botox and other cosmetic services?

Cosmetic dermatology is a growing market, one that some primary care physicians can use as an ancillary revenue stream to boost their income. But before adding these services, experts say, it’s vital to first take a hard look at your practice and patient mix to see if the fit is right. Entering the highly competitive cosmetic dermatology market means training, upfront costs, and dealing with a different kind of patient.

The prospect of boosting a primary care practice’s income by catering to baby boomers’ quest to look more youthful is alluring.    

But experts advise primary care physicians (PCPs) to weigh a number of factors-such as fit with your practice and how much training you would be willing to take on-in deciding whether to offer cosmetic dermatology in their practices.

Americans spent nearly $11 billion on cosmetic procedures in 2012, ranging from injections to skin rejuvenation and laser hair removal or treatment of leg veins. Botulinum toxin type A injections (including Botox and Dysport) ranked as the most popular nonsurgical procedure, according to the latest statistics from the American Society for Aesthetic Plastic Surgery.

“Yes, cosmetic procedures are a potential additional line of revenue,” says Neil Alan Fenske, MD, FACP, founder and director of “Derm for Non-Derms,” an annual dermatology course for non-dermatologists. “Let me tell you, however, that it’s an extraordinarily competitive business with enormous overhead.

“Cosmetic patients have very different expectations than patients who are ill,” adds Fenske, who is also professor and chairman of the department of dermatology and cutaneous surgery at the University of South Florida’s College of Medicine in Tampa. “See if you can deal with those kinds of patients, because they are challenging. Don’t buy a bunch of lasers and go in over your head because you will go bankrupt.”

Determining the financial viability

So how do you determine if adding cosmetic procedures will be financially viable in your practice? Reed Tinsley, CPA,  a Houston, Texas-based medical practice adviser, suggests starting with the following questions:

• Is there a demand for the procedure?

• Is someone else in the community providing the procedure?

• Can I perform the procedure better than the competition?

• How will it affect my current patients and staff?

• How will it affect my time?

• How much will I be reimbursed?

• Where is my break-even point?

Fenske advises starting small, by selecting one procedure, such as Botox injections, and determining if you can handle the demands of cash-paying patients who may expect perfect results.

If the procedure you’re considering will require adding equipment, you need to figure out how whether the additional revenue will pay for the equipment, and in how long.  (See “Equipment cost analysis,” page 63.)

Buying lasers poses the most significant risk, because they can cost $100,000 or more, and cost up to $10,000 per year to maintain,  Fenske says.

Typical Prices for Common Cosmetic procedures

Physicians generally charge $300 to $600 for a Botox treatment ($10 to $15 per unit), averaging 30 to 50 units per session. They tend to collect about $500 to $700 per dermal filler treatment. Cosmetic laser sessions range from $300 to $1,000 each, depending on the size of the area being treated, says John P. Bryan, CPA, a partner in the White Plains, New York, office of Citrin Cooperman, an accounting, tax and consulting firm.

“A practice that is committed to adding the services and appropriate marketing could add $50,000 to $100,000 in revenues without too much trouble,” Bryan says.

Remember, though, that the return on your investment is a key component.

The marketing component

Next, you’ll need to make sure potential customers know about your new service. Marketing to existing patients has the best chance of success, says Joshua A. Teplitzky, JD, CPA, MBA, an accountant in Woodbridge, Connecticut, with healthcare expertise. This approach could consist of e-mail blasts announcing the new services with discounts and introductory programs, mailed advertising included with a patient’s regular bill, and promotional posters displayed in the office.

Depending on the extent of the promotions, the cost could range anywhere from a few thousand dollars to $25,000, while a campaign that includes print media, television, and radio advertising “could run into the hundreds of thousands of dollars,” Teplitzky says.

A better sales plan may reside within the staff, displays, and a provider making suggestions to patients, says Owen J. Dahl, MBA, FACHE, a Houston-area healthcare consultant specializing in the business of medicine. “Word of mouth is the key,” he says. “It would be beneficial to include these products on the website and track the sales that might come from that.”

Seek training opportunities

For those inclined to take the risk, proper training is key. Practitioners will need more than one course spanning a few days and a demonstration or tutorial from the product’s manufacturer. And be sure to inquire with your state’s licensing board about the laws governing cosmetic procedures, says Tamella Buss Cassis, MD, FAAD, a  dermatologist in Louisville, Kentucky, and a member of the Women’s Dermatologic Society.

“If you feel that you can offer great quality cosmetic procedures, and there is demand in your area, then always take procedures very slowly,” says Cassis, who also serves on the American Academy of Dermatology’s safety committee. “Cosmetics companies really try to lure primary care physicians to the land of cosmetics with the idea that they will make money. Buyer beware.”

The real challenge is figuring out how to obtain the additional education and how to determine if it’s adequate. That answer “has to reside within the conscience of the individual,” Fenske says. “They have to search their soul, ‘Have I had enough training or will I harm anybody?’ ”

Does cosmetic dermatology suit your practice?

Patients may question why the scope of a doctor’s practice has widened beyond medically necessary procedures. That’s why practitioners should ask themselves, “Is it something that truly complements their practice, or is it something that’s inconsistent with what they’re doing?” says Hayden S. Wool, a healthcare compliance lawyer at Garfunkel Wild P.C. in Great Neck, New York “A patient may find it odd that his cardiologist is now doing cosmetics, so a physician should think long and hard before adding unrelated ancillaries to their practice.”

Says Dahl: “The other ‘cost’ is whether or not the patient population served by the practice would look at this as a service, or if it is just the doctor trying to make a few more dollars.”

The economics of medicine may be driving some practitioners to pursue ways of generating income outside the traditional realm. Amid declining reimbursement rates and rising malpractice insurance costs, physicians often express a desire to expand their practices, Wool observes, while cautioning, “There is a broad array of compliance issues that need to be looked at when adding any specialties or activities in a practice.”

Federal and state laws may limit a physician’s ability to provide certain ancillary services.

It may be more feasible to hire other health professionals to perform ancillary services in your office while you’re busy seeing patients. “You can have other people working for you, and presumably, at a profit,” Wool says, after accounting for the initial costs and maintenance of equipment, wages of qualified personnel, and advertising to draw new patients.

A sound business model may entail PCPs joining forces in a clinic with dermatologists, keeping referrals “in house” for everyone’s financial benefit, says Mary P. Lupo, MD, a board-certified dermatologist in New Orleans, Louisiana, and a clinical professor of dermatology at Tulane University School of Medicine.

“This would be the most ethical model, as long as they refer to the qualified plastic surgeon nearby when the situation and clinical presentation warrants,” says Lupo, founding co-director of the Cosmetic Boot Camp, a continuing medical education course aimed at the “core” aesthetics specialists.

The vast majority of complications that Lupo retreats are from “non-core” practitioners. Injectable fillers and laser procedures pose the greatest likelihood of serious complications.

Lupo recommends that PCPs interested in providing cosmetic procedures take a sabbatical to pursue residency training.