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Medi-Weightloss Clinics Appeal to Physicians as Revenue Source

Physicians wary of changes prompted by healthcare reform mandates and higher overhead costs that are looking for optional revenue sources are finding the weight loss sector increasingly appealing.

Tampa-based Medi-Weightloss Clinics® leads the $60 billion weight loss market with 594 percent growth since it was established in 2007, now with 81 locations in 20 states.

Nationwide, their patients have collectively lost more than 1.5 million pounds.

“Our growth has been very organic,” said Andrew Cox, senior vice president of business development for Medi-Weightloss Clinics. “One location opens in a new market; the brand becomes strong in the area and gradually more locations open. We have owners opening multiple units. A physician will open one location, experience success, and then open more on his own, or partner with other physicians or investors.”

According to independent industry analyst Marketdata Enterprises, the 10 largest medically-supervised weight loss chains generated an estimated $709 million in revenues in 2009, up 166 percent from five years ago, thanks to the movement of OB/GYN physicians and other specialists that typically have a high number of female patients into the burgeoning market.

“Our business model is a great fit with OB/GYNs in particular,” said Cox. “They’re experiencing high malpractice costs and decreasing reimbursement. About 80 percent of our patients are women, so OB/GYNs have a patient base that’s in need of our service.”

Marketdata Enterprises reported last fall: “Many physicians who try to ‘go it alone’ and are new to the weight loss market will inevitably struggle, and ultimately realize that medical weight loss franchisors can provide the skills, structure, and advertising that they lack. We expect many of them to wind up purchasing such franchises or licenses provided by organizations, such as Medi-Weightloss Clinics.”

In franchising, 15 states require registration prior to marketing a business opportunity, Cox pointed out.

“We’re registered in all those states and we’re looking to expand nationwide,” he said, noting that the company is compliant with all laws, including HIPAA mandates and FTC advertising regulations. “Although we have protocol set in place, every physician maintains autonomy. They prescribe the best solution to each individual patient and abide by their state’s laws.”

Many doctors that discuss investment opportunities with Cox are seeking ancillary services like cosmetic procedures, especially injectables and laser procedures.

“With 68 percent of Americans being overweight or obese, physicians across the country are already recommending that their patients lose weight to achieve their health and reduce their risk of obesity-related diseases,” he said. “Physicians tell me their patients are already trying to lose weight and some are not following a safe diet or are taking unnecessary or risky diet pills. Medi-Weightloss Clinics provides our physicians a weight loss solution that they can supervise. With our cash-based service, low malpractice, and business support, physicians are free to focus on providing patient care.”

Medi-Weightloss Clinics provide a physician-supervised weight loss program designed by experts in public health, medicine, nutrition, fitness, motivation, and education. In each clinic, medical professionals guide patients on their weight loss journey with weekly patient consultations focusing on nutrition, lifestyle, and exercise, while also doling out recipes, shopping lists, and specific menu suggestions for dining out. When a patient reaches their goal weight, the Wellness Phase takes effect to help keep off unneeded pounds. The company also markets its Corporate Wellness Program to employers looking for ways to decrease insurance costs and increase employee productivity.

“Our average actual daily revenue per patient-based clinic is $3,644,” said Cox, “and the annual (average revenue) is $884,570.”

The criteria needed for physicians to become franchisees: an existing patient base, liquid assets totaling more than $350,000, net worth totaling $1 million or more, and investor partners.

Cox said that physicians who don’t opt to move forward with the franchise opportunity express reasonable concerns.

“Because of the high demand for weight loss that works, our franchises can become very busy,” he said. “Some physicians choose not to sign up because their practices are already busy and their schedules are full.”

Also, because the company offers protected territories to franchisees, along with area development agreements, Cox said “we’ve had instances where doctors are only interested in opening a location in a certain area that’s already spoken for.”

The company backs the turn-key opportunity with resources and support to franchisees, with each one assigned a dedicated field franchise consultant, said Cox.

“In addition to a successful weight loss protocol with a full line of proprietary supplements, we provide intensive business consulting and marketing programs,” he said. “Our custom built web systems include a practice management system and electronic medical records. What we offer is exceptionally valuable and the upfront costs are significant. Some physicians we speak to aren’t ready to invest their funds into a new business. The economic climate of the past few years has definitely influenced business decisions, and opening a franchise is a risk that some people cannot afford to take today.”

Edward Zbella, MD, a Clearwater gynecologist who founded the Florida Fertility Institute in 1988, opened a Medi-Weightloss Clinic “to focus on one of the major determinants of health outcomes that, as a gynecologist, I rarely had sufficient time to discuss.”

“Weight management is an incredibly important piece of the puzzle when it comes to disease management,” he said. “Patients have come into the clinic overweight and on hypertension and diabetes medicine. After they successfully lose weight, many are able to discontinue use of medications. We teach a healthy, balanced lifestyle and aim to provide the tools needed for our patients to maintain weight loss for life. ”

Tags:

Andrew Cox, Dr. Edward Zbella, Florida Fertility Institute., Marketdata Enterprises, Medi-Weightloss Clinics®

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