Groupon for Botox by a Licensed PA, Asking for Trouble? Bad Idea?

Hi Marky.  The issue of Groupon and medical services is a sticky one.  According to many state's healthcare laws, including California, an organization or individual cannot be paid for referring a patient to another medical practice.  The laws were set up to avoid conflict of interest and kickbacks among physicians and healthcare organizations.  With that said, there has been no official ruling on this from our state and many others regarding the legality of what Groupon is doing.

With that said, in the business of elective healthcare, there is a cost associated with acquiring new patients - mostly in the form of advertising dollars.  What Groupon does is relieve the burden of finding a new patient for the practice and instead shares revenue from this initial treatment.  So, Groupon assumes the risk and cost of finding new patients and as compensation, the practice shares revenue on the first procedure or series of procedures.

You are correct in thinking that it is virtually impossible for the practice to make a profit on the initial set of services purchased from Groupon.  But if the practice manages to find good long term patients that are willing to pay normal prices for their services, it may indeed work out in the long run for the practice.  At the same time, the consumer gets a low "cost of entry" to test out a new practice or service that they have been considering and otherwise might not have tried if not for the reduced price.

We understand the concept behind Groupon, but question whether it is legal and also whether or not there are enough long term patients to be found to make the business model worthwhile.

My understanding is that Plastic Surgeons cannot use Groupon for Botox.  There are legitimate rebates out there.  Currently, there is a rebate that you get from the manufacturer of Botox.  Allergan is the name of the company.   They will have you sign up for the "Brillliant Distinctions" program.  This program gives loyalty points and rebates.  Beware of other coupons, and dirt cheap Botox.  Seek out an established, experienced injector.

If you pay for a certain number of units, then you are due those units and despite how they dilute the Botox, it is not volume you are paying for, it is the units, so they would have to be given.  The price quoted would not cover the administrative overhead costs of the practice sufficiently. They would be losing money. But as a marketing tool, it would help get you in the door, to learn of the practice and practioners and hopefully have you become a long-term patient returning for other procedures. My concern with Groupon, is that you are buying a procedure for which you have not yet been told by that physician you are a candidate. That decision should be made first and then you should be given the opportunity to get a discount. Physicians should not be forced into a position of telling a patient that they shouldn't have a treatment that they have paid for in advance as the patient will not be as willing to listen to the sage advice.  Furthermore, although this may be construed as an administrative cost to Groupon, it sounds more akin to fee splitting which is not legal in New York and other states.