With four plastic surgeons and a medical spa, St. Louis Cosmetic Surgery has been around for more than 35 years.

Name: Dr. Herluf Gyde Lund, Jr.
Location: Chesterfield, MO
Website: stlcosmeticsurgery.com

As part of a large cosmetic practice in St. Louis that is one of the largest cosmetic breast surgery practices in the country, Dr. Lund has undoubtedly seen his share of patients and has stories to tell. In this inteview, Dr. Lund shares his clinics compensation structures for staff members, details different types of medical spa business models, and shares his thoughts on building a successful practice.

That's interesting: Dr. Lund chairs and serves on numerous committees for both the American Society of Plastic Surgeons and the American Society for Aesthetic Plastic Surgery and is a principle investigator in studies using the next generation, Cohesive Gel Implant. Every summer, Dr. Lund volunteers as the "camp doctor" for Camp Chippewa for Boys in Cass Lake, Minnesota.

How did your interest for cosmetic surgery start?

The artistic side of me wanted to be a drama major, the “big picture” part of me wanted to be a theoretical sociology major, and the medical side wanted me to be pre-med. So I did all three. I became very interested in cosmetic surgery and cosmetic medicine because it allowed my artistic side to work with my surgical side. I love surgery and I love being able to take something and sculpt and shape it into something very different yet very natural and real. Like most plastic surgeons, when I began my practice, I mostly performed breast reconstruction and other complex reconstructions. As my cosmetic patient numbers continued to increase, I realized that to be the best I could possibly be in cosmetic surgery, I needed to devote myself and my practice to focus on this very specialized area of plastic surgery. I also realized that the goals of aesthetic medicine extended beyond the boundaries of cosmetic surgery alone and into cosmetic medicine and therefore a commitment was also required to learn how to manage problems that were not part of my original training such as skin care. My training in plastic surgery with its devotion to understanding the problem from the cellular level up has made learning and adapting into new areas of cosmetic medicine and surgery part of my continuing process of learning. I owe this to my mentors in plastic surgery and particularly to Dr. Vernon Leroy Young who taught me to never stop growing and learning.

St. Louis Cosmetic Surgery is a bigger clinic with four plastic surgeons and a medical spa. How is it organized and operated?

I am part of a four partner plastic surgery group founded in 1973 by my senior partner Dr. Bruce White. Bruce serves as an inspiration for all of us with his constant quest to be on top of the newest and safest procedures, technologies, and treatments. All of the four partners share equally in the management of our practice. We as a group research and select the newer procedures and technologies. When we have completed our research, we then review the data and collectively decide whether to include the new item into our practice or not to do so. My practice with my partners performs cosmetic surgery in all of the face and body including hair restoration, facial rejuvenation, breast surgery including breast augmentation and breast reductions, body contouring including liposuction and abdominoplasty, body lifts, fat transfers, etc. Our practice also performs injectables and Botox and has a complete and full service medical spa. My patients come from a variety of backgrounds reflecting the complex makeup of the greater St. Louis area population. We are one of the largest breast augmentation providers in the country according to the industry measurements.

You've got a fair sized staff and have been in business a long time. What have you learned about compensation and managing people in a medical practice and how is your compensation structure set up?

Truly one of the hardest and most challenging areas of being a plastic surgeon is selecting your staff. Your staff is a reflection you and therefore you have to look at them as an extension of yourself. The key for my practice is to hire the best office manager possible. My first manager had a very thorough background in medical practice management but as my practice grew and the range of services we provided increased and the complexity of managing them became greater, I eventually brought in a manager with a background in running larger and very complex businesses from the consumer sector to really run the business like a business. She had no medical experience and required a bit more time to understand the medical aspects of our business but the tradeoff in the quality of management and the extra costs have been worth every penny.

Because different parts of the medical practice function differently, each component has to be managed and compensated accordingly.

The majority of the medical team is on straight salary with bonuses being based of the performance of the team as a whole. They must work together to succeed together.

The nurse injectors are compensated by a base salary and a commission system which takes into account each injectors individual performances and also the practice’s performance. If one nurse is vastly outperforming the others, in order to maximize her commission, she has to then work with the others to improve their performance numbers also. This leads to a sharing of best practices amongst the staff.

The medical spa is both salary and commission based. Each member of the medical spa shares in two bonus pools. One being specific for their level of training and service. The other for the medical spa as a whole. This encourages the medical esthetician to maximize the performance of their services and products but does not hinder their being able to gain from services performed on their clients that required the skills of a higher level employee such as a laser technician. This encourages the employees that work on the entry level services for the medical spa to refer their clients up the ladder to those that will perform the higher priced procedures and treatments.

Hiring is through the office manager who is empowered to indentify and find the right personnel who she presents to the partners for their approval. Firing of employees is also the duties of the office manager with agreement by the partners. There are certainly times when one or more of the partners is in disagreement with the others in the practice but we have stayed with the principle of discussion followed by the majority rules. If we have a tie in voting, our office manager gets to cast the deciding vote. Interestingly, we have always been able to reach an agreement and never have required a tie-breaker vote.

The hardest thing about dismissing an employee is that good employees make mistakes just the same as do problematic employees. The important element is do they learn from their mistakes and understand how to prevent them in the future. Some of the most engaging and skilled workers we have hired have had to be discharged because they refuse to accept that their job is a constant learning process and errors will occur. We as employers understand that but we also demand that you learn from them and also share that learning process with everyone on the staff including the physicians.

Have we tried other management systems and compensation programs? I suspect we have tried just about all there are out there. What we have developed is the result of our trial and error efforts. We are always trying to find a better way to improve the performances of our staff.

You're running a medical spa that includes a number of nonsurgical, light based technologies. What types of technology are you using and why?

We currently offer IPL treatments using the Lumenis platform systems. They have served us well. We also use their hair removal systems and the Yag-lasers. We do not own a resurfacing laser system and instead rent the ActiveFX laser when demand merits. We made this decision after looking at the St. Louis area market and concluded that resurfacing lasers in this market are very high risk and very low reward.

Our patient population is a relatively conservative one that wants to see “real” results when spending a lot of money. Since this is also a population that has for the most part only moderate sun damage, lasers also do not have a large market pool to draw from when compared to Miami, Dallas, etc. We have watched dozens of laser clinics come and go simply because they did not know the market they were working in. They over invested in expensive technologies and then struggled to meet their financial commitments. Many of these same firms also over-promised the results the patients would experience and the down-time needed for recovery.

We have looked into hundreds of other technologies including external ultrasound, Endermology, Velashape, Zerona, etc. If our research cannot justify the expense to us and our patients, then we will not buy the product. We will market and sell nothing to our patients that have not been proven to work. The medical spa world is filled with gimmicks and stuff but our reputation is built on that we if market it, it will give the results we promise.

You've got a great practice that generates a lot of new patient flow. What marketing strategies are you using and why?

We have a full time, in house marketing director who uses numerous avenues to market our practice. From traditional word of mouth to internet to social media, we use it all. We still use radio focusing on the key drive times and on the population groups we want to target. We rarely use TV since it is costly to buy and costly to keep fresh. We do have very good relationships with many media sources that use us as information resources. We have internal marketing with patient reward nights and patient events. We have an e-newsletter that we send out on a quarterly basis.

We have used print media in the past but now limit such marketing to very focused groups on a limited basis.

We invested a great deal of time and money in developing and maintaining our new website. We researched who we wanted to develop our site after reviewing hundreds of websites and web development plans. Once we had determined who we wanted, we had to then go out and get them. This was not easy to accomplish given a “Non Compete” situation but it was worth the effort and the wait. The site reflects the freshness of the partnership and out practice.

We also partner with other businesses that we believe our patients would like to experience to increase the value of their relationship with our practice. Our marketing director also is part of a larger nationwide group that frequently meets on the web to share ideas and develop new marketing strategies.

What are the most in demand treatments or services?

In the medical spa, we remind our staff of the two P’s; products and procedures. These are the keys to being profitable and successful. Too often, the staff worried that their patients would take offense to being urged to buy and use the products we sell in the medical spa. The staff had concerns that they would appear to be to “pushy” and less professional. What we, the doctors, have reminded the staff about is that if you believe in your products and you believe your procedure will help your patient, then it is your duty to tell the patient. The patient is looking for your guidance and direction in how to get the best results possible. It is important to give the patient in a professional manner the advice and information they need to make a decision.

We have partnered with an OB-GYN who specializes in hormone replacement therapy to bring in a new area of expertise in the anti-aging market. At first, we thought this would be a almost exclusively female service but as wives started having their treatments, they soon brought their husbands in for consultation. This did require a bit of rebranding and remarketing of the program and we are continuing to fine-tune this effort.

3-D imaging has been a very successful launch for us in the last 6 months. We will continue to look at noninvasive fat reduction such as cryotherapy or external ultrasound.

We discontinued hydrotherapy treatments in our medical spa based upon the limited usage of the treatments and the costs for preparing and maintaining the rooms. We also have limited our product line number and inventory. The sales reps are great at trying to get us to buy large volumes of products but that comes with the additional expense of storing and maintaining inventory control.

What have you learned about managing your practice?

I was asked once to describe what I know about on how to run a medical spa and I replied that it would be easier for me to answer what I know about how not to run a medical spa. I was far too trusting in the beginning believing that everyone was working towards the same goal.

My hardest day in the medical spa was the time we had to dismiss a long-time employee for treating patients on the side, at her home outside of the practice. This was one of the funniest, most bubbly persons I have ever known and everyone loved her. To some, she was the “face” of the medical spa. Many of the other staff members expressed the opinion that what she did on her own time was her own business and did not see the conflict of interest in play. Many of these patients told us that if we dismissed her, they would never come back but we had to do what was right for the business and did proceed with the dismissal. There were many tears and some anger but in the end and after needed discussion, the others on the staff understood what had occurred and why. Interestingly enough, almost all of the patients have returned back to our medical spa.

Since this has occurred, we spend more time working on team building and being very clear about the goals and directions we want for our medical spa and practice. We also use this example to demonstrate that while this employee was “stealing” patients from our practice, she was also “stealing” from her fellow employees by taking patients out of their bonus pool and diminishing their personal rewards. Peer pressure seems to work if everyone is aware of the team goal and that everyone benefits if we achieve it. Still, ultimately it is your business and your money and you have to be involved and willing to encourage and discipline when needed.

What do you think physicians need to know about starting or running a medical spa?

Determine first if you really need a medical spa. If you just want to provide some products and skin care, then you may not need to add a great deal of staffing and services. You may be able to train your nursing staff to provide many of the treatments and the product manufacturers are usually very willing to help train you staff on how to market and sell their product lines. This does not require a big investment in inventory and office space and also lets you “try the water” first.

Once you have made the decision to open a medical spa, then you need to decide what you want your medical spa to do. Once you have decided what you want to do, then you need to examine your patient practice mix and the surrounding competition to determine if the goals you have set are achievable given the environment you practice in.

For example, there are essentially four types of medical spa models to choose from when setting up a medical spa. There is the “Spare Room” model which is essentially what I described in the above paragraph. It is a service you want to offer your patients but it will not be a major focus of your practice or your staff. The opposite is the “Franchise” model with the goal being to develop a medical spa template and then open multiple copies of the template in your community or even outside your community. This requires a lot of capital and a great deal of time and effort both on the part of your staff and yourself to get up and running. You will probably need outside financing and also outside consultants and management to be successful. Many of these franchise model based medical spas went out of business when the economy soured and the usage of spas decreased and price-cutting became the norm.

The two most common models are the “Patient Magnet” model and the “Patient Retention” model. In the “Patient Magnet” model, your goal is to use the medical spa to attract new clients into the medical spa who then become patients of the plastic surgical practice. Because you are using the medical spa to bring in a constant flow of new patients into the practice, the medical spa marketing will have to be aggressive and extensive. New patients will come to you because they have seen the ads, heard the ads, or learned about your medical spa from other marketing programs. Because this model also requires having the “newest” product or technology, there also tends to be more equipment costs which also require more marketing. Also, your staffing costs will be higher since your medical spa will need to be able to get the first time buyer or the impulsive shopper in right away meaning you need to have someone available at the time they want to be treated. Again, the entire goal of this model is to attract a steady stream of new patients into the medical spa that then acts as a feeder to the surgical side of the practice.

The last model is the “Patient Retention” model where you use the medical spa to keep the patients you have in your practice. In a plastic surgical practice, most patients obtain a consult for the procedure they are interested in, then have the surgery, and then have the required follow-up. After the patient completes their post-operative follow up care, they are usually discharged from the surgery practice. While some of these patients may return to the practice for future procedures, they also may go to another practice simply because they have lost contact with your practice. In the “Patient Retainer” medical spa model, instead of discharging the patient from your practice after completing their post-operative course, your patient stays tied to the practice by continuing to have treatments to enhance their results or for other cosmetic concerns. For example, having a facelift patient continue to obtain skincare treatment after healing from her facelift or having a liposuction patient obtain massage to maximize her liposuction results. Since these patients have never “left” the practice, they will be more likely to return to the practice if they choose to proceed with another procedure. They also will continue to be exposed to the procedures and services you offer and any other new services you add. They are also likely to recommend your services to their friends and family. This model requires less marketing costs since these patients are already familiar with your practice. They are also more willing to wait for time in the schedule when booking their appointment than a “cold call” patient. Lastly, these patients do not need to be attracted by the latest and newest toys and so there may be less equipment costs also.

Whatever model you choose for your practice, you will need to do your homework to truly understand your costs and the time requirements both from you and your staff necessary to achieve your goals. Too many practices simply decide to “open a medical spa” without any real idea of the true costs which is why so many medical spas fail.

About Dr Lund: I am a Board-Certified plastic surgeon in a group practice serving the greater St. Louis area. I attended Washington University School of Medicine in St. Louis followed by a residency in general surgery at the University of Texas-Houston and then a plastic surgery residency at Washington University. I began my practice at first in a solo practice and then later merged my practice with St. Louis Cosmetic Surgery, the oldest practice in St. Louis devoted to the performance of cosmetic surgery and medicine. I have remained active in aesthetic surgery research and also serve in numerous capacities in both the American Society of Plastic Surgeons and the American Society for Aesthetic Plastic Surgery. I am currently a member of the Board of Directors of ASAPS.

This interview is part of a series of interviews of physicians running medical spas, laser clinics and cosmetic surgery centers. If you'd like to be interviewed, just contact us.