MedSpa Market Overview
FEBRUARY 2024
FEBRUARY 2024
The field of Medical Aesthetics (or “MedSpa”) is dedicated to enhancing patients' cosmetic appearance using a variety of non-surgical methods. What differentiates MedSpas from conventional beauty services and spa treatments is the oversight of qualified medical professionals and licensed estheticians.
Fundamentally, the MedSpa industry is characterized by the availability of non-invasive cosmetic procedures.
In each specified category, a multitude of services are accessible for patient utilization, and these services are becoming increasingly prevalent.
Although pure-play MedSpa practices can administer these services independently, the industry gains added value from diverse medical professionals who integrate these core services into their existing practices.
MedSpas offer a wealth of cosmetic and mental health benefits. The most successful practices blend the confidence associated with high-level medical professionals with the convenience and wellness capabilities of a health spa.
The MedSpa market size reached $18 billion in 2023, with a projected CAGR of 18.7% through 2032. This expansion is fueled by robust consumer trends, highlighted by a heightened focus on wellness and cosmetic care.
The United States dominates the MedSpa market and continues to witness growth. The top four states with the highest concentration of MedSpa businesses are California (11.5%), New York (10.0%), Florida (8.8%) and Texas (7.6%).
Registered MedSpas in the U.S. by the end of 2021.
Registered MedSpas in the U.S. by the end of 2022.
Sources: Expert Market Research, Statistica, Medica Depot, IBISWorld
The demand for non-surgical cosmetic treatments is rapidly increasing. With consumers placing greater emphasis on overall wellness and appearance, there is a growing need for the more affordable and safer procedures that are offered by MedSpa practices.
While the typical consumer remains predominantly female, the number of males seeking aesthetic treatments has tripled since 2000.
The population of adults over 60 is growing and expected to reach 1.4 billion by 2030.
In contrast to traditional medical practices, MedSpas can be owned and operated by a variety of specialized medical professionals. This allows the industry to benefit from core doctors, such as plastic surgeons and dentists, incorporating MedSpa services into their primary business.
Sources: Mordor Intelligence, Data Bridge Market Research
Ownership:
Initial investment:
Recent Acquisitions:
1 Sept 2022
2 Feb 2023
3 Feb 2023
4 Feb 2023
5 April 2023
Ownership:
Initial investment:
Recent Acquisitions:
1 Mar 2023
2 May 2023
3 May 2023
4 Jul 2023
5 Jan 2023
Ownership:
Initial investment:
Recent Acquisitions:
1 Jan 2023
2 Jul 2023
3 Aug 2023
4 Nov 2023
5 Dec 2023
Ownership:
Initial investment:
Recent Acquisitions:
1 Jan 2023
2 Mar 2023
3 May 2023
4 Jun 2023
5 Aug 2023
In the last five years, approximately $3.1 billion in private capital has been invested in the MedSpa industry. These investments are driven by substantial growth and enduring tailwinds, making the MedSpa sector an appealing investment.
Just 8% of MedSpas are under private equity, franchise, or national chains, signaling a substantial opportunity for investors to consolidate the industry.
Strong
Growth Catalysts |
Increased demand for core services, rising consumer incomes, an expanding
target
market, technological advancements, and a diverse range of service providers
contributing to significant growth.
|
Highly
Fragmented Market |
MedSpa stands out as one of the few healthcare
industries witnessing a faster influx of single-location operators than the
consolidation of existing practices. In 2022, approximately 76% of the U.S.
MedSpa space was dominated by single-location owners, presenting promising
investment opportunities.
|
Resilient
Industry |
The industry has proven to be resilient in times of
economic downturn. During the 2008 financial crisis, as well as the COVID-19
pandemic, MedSpa took a hit, but recovered well in the following years.
|
Recurring
Nature |
MedSpa practices tend to experience high rates of
returning patients, and the procedures administered are largely recurring in
nature leading to predictable cashflows.
|
Demand
Outpacing Supply |
While this issue has not manifested prominently, the
current surge in demand could outpace the supply of qualified medical
professionals. Despite the industry having a varied array of service
providers,
demand is on the rise. Any regulatory measures aimed at expanding the
certifications needed to practice within the industry could pose challenges.
|
Sources: Modern Aesthetics, PitchBook, PR Newswire, BeautyMatter
Date | Target | Acquirer | Transaction Type | |
---|---|---|---|---|
November 2023 | Was acquired by | Platform | ||
October 2023 | Was acquired by | Platform | ||
September 2023 | Was acquired by | Platform | ||
July 2023 | Was acquired by | Platform | ||
June 2023 | Was acquired by | Platform | ||
May 2023 | Was acquired by | Platform | ||
April 2023 | Was acquired by | Platform |
Date | Target | Acquirer | Transaction Type | |
---|---|---|---|---|
January 2024 | Was acquired by | Add-On | ||
January 2024 | Was acquired by | Add-On | ||
January 2024 | Was acquired by | Add-On | ||
December 2023 | Was acquired by | Add-On | ||
December 2023 | Was acquired by | Add-On | ||
November 2023 | Was acquired by | Add-On | ||
November 2023 | Was acquired by | Add-On | ||
October 2023 | Was acquired by | Add-On | ||
August 2023 | Was acquired by | Add-On |
Rising consumer demand and heightened investor interest in the MedSpa industry has brought about various federal and state regulations, presenting complexities in structuring transactions and establishing new clinics.
CPOM (Corporate Practice of Medicine) Doctrines differ by state, imposing restrictions or outright prohibitions on the ownership of medical practices or businesses by individuals without medical licenses.
As many states classify core MedSpa services as medical practice, non-physician ownership is generally restricted. Investors must consider this when structuring transactions within the MedSpa industry.
Physician and clinic advertising adhere to FTC Act regulations, with consumer information governed by HIPAA. In this visually and digitally focused industry, practitioners must carefully follow these guidelines to avoid penalties for deceptive acts or consumer rights.
in fines per violation (FTC Act)
The AKS and Stark Law bar medical providers from exchanging kickbacks for patient referrals under Medicaid/Medicare. Although most MedSpas operate on a cash basis, those providing treatments like neurotoxin injections for non-cosmetic conditions and participating in federal healthcare programs are subject to these regulations.
states have imposed their own variations (some extending to all cash transactions)
A proposed law in Texas aims to mandate the presence of an NP, PA, or MD on-site for all aesthetics businesses. Additionally, medical directors must be within 75 miles of the business they oversee, and the supervision limit for one MD over NPs and PAs is proposed to decrease from 7 to 5.
The proposed rules restrict estheticians from using blades, performing medical treatments like microdermabrasion and Botox injections, employing devices below the stratum corneum, diagnosing or treating medical conditions, and using lasers or ultrasounds.
Estheticians cannot perform cosmetic medical procedures, unless acting as unlicensed medical assistants under a physician. This restriction would limit estheticians' independent service abilities, affecting the flexibility and efficiency of med spa operations.
The proposed regulation mandates a 90-day notice to the Attorney General (AG) before any health care transactions take effect. The AG reviews based on market competition, quality of care, and access to care, with the authority to approve, conditionally consent, or deny the underlying transaction.
Sources: McGuireWoods LLP, Telos Digital Marketing, Morgan Lewis, Lengea Law, American Med Spa Association, UC Law San Francisco
While federal laws play a role in shaping the regulatory landscape of the MedSpa industry, the crux lies in the diverse regulations of individual states.
Key Considerations | California | New York | Florida | Texas |
---|---|---|---|---|
Does the state have a Corporate Practice of Medicine doctrine? | Yes | Yes | No | Yes |
Is continued education or advanced training required? | Yes | Yes | Yes | Yes |
Can you charge commission on laser treatments or injectables? | No | No | No | Yes |
Can you share profits if you’re not a licensed doctor? | No | No | No | No |
Sources: Dental & Medical Counsel, Facemedical
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