Spas combine comfort, medical treatment

October 29, 2006

Ulrike Bartlett has found herself in an industry that is all about keeping up with the Joneses.
A year ago Bartlett, who owns Escape Day Spa, remodeled the former Jody Bergsma gallery on King Street to create a day spa that was five times bigger than her old location on Bay Street. Along with services such as massages, manicures and pedicures, she added a variety of perks to make sure her customers were well-pampered, including a flotation tub, hydrotherapy tub, water wall and locker rooms.

This year she is at it again, recently adding cosmetic treatments that utilize Intense Pulsed Lights (IPL) for permanent hair removal or correction of benign skin conditions, including birthmarks and broken capillaries. She also hired a board-certified physician to oversee the program and train employees.

"It wasn't long ago that day spas and medical spas were separate types of businesses, with different atmospheres. The day spas had the pampered feel, while medical spas had staff in white coats," Bartlett said. "We're combining the two in order to create a nice experience for our customers while giving them effective treatments to rejuvenate their skin."

Doctors and hospitals still handle major treatments, such as surgery, but today people have plenty of options for minor treatments.

Tom Dorr, director at Western Washington University's Small Business Development Center, said Whatcom County is following a nationwide trend where entrepreneurs are opening clinics to treat people for a variety of things, such as hair removal, skin conditions and eyesight problems.

In Washington state, the number of people licensed has seen significant increases in some industries, according to the state Department of Health.

The number of licensed massage therapists in the state rose from 9,211 in 2001 to 10,362 in 2003, while the number of licensed physical therapists rose from 3,809 in 2001 to 4,146 in 2003. Between 1991 and 2001, the number of licensed people in the overall medical industry (including physicians, nurses and dentists) rose from 159,148 to 254,285. The department did not have numbers broken down by county.

"People have more hectic schedules today, but they also want to take care of themselves and look good, so there seems to be a demand for these places that can offer quick treatments for minor problems," Dorr said.

"In the past five years I've seen a significant increase in the number of people who come here (to the SBDC) interested in opening a clinic, day spa or other type of business that helps people look and feel better. I've also seen more existing businesses come here interested in adding services, especially ones once considered medical treatments."

Dorr is concerned that there may be more clinics, day spas and other treatment centers than what Whatcom County can support.

He said there was an expectation that Canadians would cross the border to use these centers because there would be less wait time for treatments. The Fraser Institute, an independent public policy organization in Canada, recently released a study that showed Canadians wait an average of nearly 18 weeks to have surgical or therapeutic treatment. While this study included surgeries, Dorr expects there are long waits for more cosmetic treatments.

"So far, Canadians haven't been coming here in significant numbers for a lot of these types of businesses," Dorr said. "It's been the local population that has used these services. Based on what I'm hearing from people who have clinics and spas, however, the local market has become oversaturated. I would expect the number of new openings to tail off over the next year or two until demand can catch up with the supply."

COMPETING FOR THE CUSTOMER
Those who already have a center open and have found the right niche, can have a successful operation.

Many of these clinics or day spas can focus on services and treatments that people pay for out of pocket, not through insurance.

This makes it difficult for hospitals and medical groups that have to offer the "money loser" treatments; procedures that are covered by insurance but have low reimbursement rates, said Dr. Erick Laine, CEO of the Madrona Medical Group.

Typically the business model for a medical group or hospital is to balance the treatments that pay more than the procedure costs with treatments that pay less than the cost, to at least break even.

"Health care continues to work with two different market models. One rationale is to integrate everything together like a hospital does so that no section suffers, while the other model is to have sections split off to create boutique clinics, which can lead to innovations," Laine said. "It's a constant debate on how you keep innovating while making sure every aspect of health care is available."

COSTLY PROJECT
Even if companies can focus on treatments that make a profit, it is difficult to succeed in many of these industries, said Dorr. Challenges for a business like a medical day spa, compared to something like a retail store, include higher start-up costs and much higher liability insurance, in case a treatment goes wrong, he said.

"Even marketing the business is more expensive because you have to spend a lot of time educating people about what you do and how you're different from the others," Dorr said.

Bartlett said the competition is good because it can provide people with alternatives to find what's best for them.

"There are many people who are afraid to have surgery to fix a skin problem, but there are more simple procedures becoming available all the time because there is an incentive to improve," Bartlett said. "Plus, if you can have the procedure done in a day spa setting, people will feel much more comfortable about it. That's why I think medical spas and day spas will continue to blend together."

There is also a trend to combine services in other beauty service areas as well, Dorr said.

"The days of a hair salon only offering a hair cut are gone," Dorr said. "In order to compete today, a salon needs to offer a variety of services, whether it's pedicures, manicures, massages or other treatments."

That goes for day spas, too, Bartlett said.

"With women working more these days and people having less time for themselves, they want a place where they can get as much done as possible in one place," Bartlett said. "Offering more and more services will be the trend in the coming years."

Source: http://news.bellinghamherald.com/