Starting a healthcare-related business brings exciting opportunities and no shortage of critical decisions. One of the most important questions owners face early on is this:
Do I need a medical director for my business?
This question goes beyond legal compliance. It’s about building a sustainable foundation in a healthcare landscape that’s becoming more regulated by the day.
The short answer? It depends.
Whether you’re starting a telehealth platform, medical spa, or a healthcare tech startup, several key factors will determine whether hiring a medical director is essential, advisable, or unnecessary.
This guide walks you through eight key considerations so you can make a well-informed decision that protects your business and sets the stage for long-term growth.
What Types of Businesses Need a Medical Director in 2025?
Understanding why you need a medical director starts with recognizing which healthcare-related businesses commonly require a medical director.
- Medical spas
- IV hydration clinics
- Primary care practices
- Telemedicine companies
- Psychiatric clinics
These sectors face increasing oversight. The medical aesthetics industry, for instance, is now worth more than $17 billion (and growing by $1 billion annually), and scrutiny is rising across the board.
Even if your business doesn’t fall into a “required” category, having a qualified medical director in 2025 is quickly becoming a competitive advantage that enhances credibility and compliance.
8 Key Factors to Help You Decide
Every healthcare business is unique. These eight key factors will help you assess whether medical director oversight is required, optional, or a smart strategic move.
1. Legal and Regulatory Requirements
Some states, like Arizona or Oregon, allow nurse practitioners to operate independently. Others, such as Florida or Texas, require physician oversight even for noninvasive services.
Texas’s Jennifer’s Law, passed in 2023, mandates that medical directors be appointed for all med spas. This law is part of a broader 2025 trend toward stricter enforcement across many states.
Check our state-by-state guide to medical director laws before launching.
CMS Conditions of Participation (CoPs) and FDA guidelines add extra layers of compliance at the federal level, particularly for telehealth, device trials, and Medicare services. Telemedicine businesses, in particular, must register across multiple states, many of which require a named medical director.
2. Nature of Your Business Operations
The nature of your operations is another factor influencing whether or not your company needs a medical director.
Businesses engaged in direct patient care, such as clinics or in-home care providers, typically require physician oversight.
In other healthcare sectors, the necessity may be strategic.
- Medical Device and Pharmaceutical Companies: A medical director helps align clinical strategy, validate studies, and support FDA submissions and regulatory communication.
- Telemedicine: Managing multistate licensing and Medicare compliance requires medical director oversight to avoid regulatory missteps and inconsistent patient experiences.
- Healthcare Technology Companies: When products affect clinical decisions, medical directors validate functionality and guide responsible product development.
In each of these cases, the medical director plays a critical role in anchoring the company’s operations in clinical credibility, regulatory alignment, and ethical practice, regardless of whether the role is strictly mandated by law.
3. Risk Management and Liability
A medical director is central to managing organizational risk. Their presence can reduce exposure, strengthen oversight, and even impact how insurers assess your business.
While many think of liability solely in terms of malpractice, the risks associated with clinical leadership are broader and often overlooked. Key areas where a medical director adds risk protection include the following:
- Medical Malpractice Exposure: Unlike standard malpractice insurance, medical director coverage addresses risks tied to administrative leadership.
- Clinical Oversight: For practices owned by nurse practitioners or physician assistants, physician supervision supports safer, legally sound delegation of medical tasks.
- Quality Assurance: Medical directors lead quality improvement by developing, monitoring, and refining protocols to standardize care across clinical teams and locations.
- Insurance Incentives: Some insurers mandate or discount policies for companies with medical directors.
In short, having a medical director actively shapes a safer, more defensible clinical environment from both a legal and operational standpoint.
4. Staff Supervision and Credentialing
Supervising clinical staff involves creating a structure where safety, competence, and professional growth are continuously reinforced.
A medical director plays a vital role in ensuring that clinicians operate within the scope of their licenses while delivering high-quality care. Their presence is especially important in practices with nurse practitioners, physician assistants, or other nonphysician providers.
Key areas of impact include:
- Oversight of Licensed Professionals: Depending on state law, NPs, PAs, and RNs may require supervision to stay within legal and ethical clinical practice boundaries.
- Training and Competency Standards: Medical directors assess staff readiness and ensure clinical protocols reflect up-to-date, evidence-based practices.
- Scope of Practice: They help align each provider’s clinical duties with licensure limits, optimizing care delivery while minimizing compliance risks or overreach.
- Addressing Performance Concerns: When issues emerge, medical directors guide remediation plans, evaluate performance, and help maintain quality care under pressure.
With effective leadership from a medical director, supervision becomes a pathway to safer care, better staff development, and stronger organizational integrity.
5. Business Size and Growth Plans
Your organization’s size and growth trajectory directly affect the kind of medical oversight you need. A forward-looking approach to medical director involvement can help you avoid missteps and build a more resilient infrastructure. Consider these factors:
- Small vs. Large Operations: Early-stage companies often need only part-time oversight, while larger organizations benefit from dedicated, full-time clinical leadership and policy development.
- Scalability: Bringing in a medical director early helps shape compliant systems and protocols, reducing future disruptions as your business grows in complexity.
- Multistate Operations: Expanding nationally? Different states may require distinct medical directors or specific credentials tied to local laws and medical board rules.
- High Patient Volume: Increased patient numbers amplify risk, making experienced oversight essential for maintaining consistency, safety, and regulatory compliance.
Whether you’re operating a small clinic or scaling a multi-state platform, strategic medical oversight scales with you, minimizing risk while reinforcing clinical excellence.
6. Cost–Benefit Analysis
Hiring a medical director is a financial commitment, but one that often pays for itself by preventing far costlier problems down the line.
Nationally, part-time medical directors earn an average of $111.72 per hour or approximately $232,369 annually; actual compensation can vary widely based on location, specialty, and responsibilities.
Many smaller organizations operate effectively with 10–20 hours of oversight per week, allowing for part-time or consulting arrangements that offer cost flexibility without compromising compliance.
The financial commitment becomes even more justifiable when weighed against the potential costs of noncompliance, malpractice exposure, or failed regulatory audits.
Fines, litigation, reputational damage, and operational disruptions can easily exceed the annual cost of a medical director. In that light, their role should be viewed not as overhead, but as strategic risk insurance and infrastructure support.
7. Accreditation and Certification Goals
The presence of a medical director can satisfy institutional requirements, open doors to reimbursement, and elevate your brand in ways that go beyond clinical supervision.
- Joint Commission Accreditation: Most accreditation pathways require physician oversight to ensure quality benchmarks are consistently maintained.
- Specialty Certifications: Clinical leadership is often mandatory for certifications in behavioral health, ambulatory surgery, and medical aesthetics.
- Client and Partner Requirements: Many payers, insurers, and institutional partners require a named medical director before forming business relationships.
- Medicare and Medicaid Access: Joint Commission “deemed status” can simplify enrollment and reimbursement with CMS by satisfying federal participation requirements.
- Market Positioning: Accreditation enhances public credibility, improves patient trust, and strengthens your brand in competitive markets and payer or partner negotiations.
8. Alternative Solutions
If you’re not ready for a full-time hire, you still have options.
- Medical Advisory Boards: A board of physicians can provide high-level strategic input without managing day-to-day operations.
- Contracted Medical Director Services: Hiring a consulting medical director gives you oversight without long-term commitment or overhead.
- Shared Medical Directors: Some organizations share one physician’s time and cost. This model offers budget flexibility while still meeting compliance needs.
- Outsourced Oversight Models: Virtual or part-time arrangements provide many of the same benefits at a fraction of the cost, especially for startups and small teams.
The decision to hire a medical director requires careful evaluation of these eight factors within your specific business context.
While regulatory requirements may dictate necessity in some cases, the value proposition extends far beyond compliance to encompass risk management, operational excellence, and competitive advantage.
Consider starting with alternative solutions if full-time medical director employment isn’t immediately feasible, but ensure any arrangement provides adequate oversight for your specific operational requirements and growth ambitions.
How to Hire a Medical Director for a Med Spa
Hiring the right medical director starts with clearly defining what your business needs, not just today, but as you grow.
- Define the role. Outline responsibilities, expected hours, specialties required, and relevant state licensure. Consider whether your medical director will be hands-on clinically or focused on compliance and strategy.
- Structure compensation. Use regional benchmarks to stay competitive. Determine if you’ll offer consulting, part-time, or full-time arrangements based on your operational needs.
- Source candidates. Tap into professional networks, specialty societies, staffing agencies, and referral networks. Use platforms that specialize in healthcare placements to widen your reach.
- Verify clinical and regulatory expertise. Confirm licensing, certifications, and experience relevant to your niche, especially for aesthetics, IV therapy, or behavioral health.
- Assess leadership and communication style: Your medical director should align with your team’s values and communicate clearly with both staff and patients.
- Finalize legal agreements. Work with a healthcare attorney to draft a compliant, clearly defined agreement that covers compensation, responsibilities, termination terms, and liability.
Most hiring processes take 60–90 days. Taking the time to find the right match will pay off in stronger oversight and better business outcomes.
Find the Right Fit with Medical Director Co.
Finding the right medical director can transform your healthcare business, but navigating the complexities of healthcare leadership requires expert guidance. From understanding regulatory requirements to structuring compliant arrangements, the path to successful medical director partnerships demands specialized knowledge and careful planning.
Medical Director Co. helps connect NPs, PAs, and RNs with qualified medical directors and collaborative physicians with no upfront fees.
Contact us today, and let us help you jumpstart your business.
Frequently Asked Questions
Q: Do all healthcare businesses legally need a medical director?
A: No. Requirements depend on your state, service type, and staffing model.
Q: Can a nurse practitioner act as a medical director?
A: In states granting full practice authority, yes. Always check state laws.
Q: How much does it cost to hire one?
A: Part-time rates range from $111 to $179 per hour. Full-time salaries range from $220K to $320K.
Q: Can I use a part-time or virtual director?
A: Yes. Many startups use virtual or shared directors to save costs while staying compliant.
Q: Do I need a separate director for each state I operate in?
A: Sometimes. Multistate operations may require local licensure or separate contracts.
Q: Do you need an MD to become a medical director?
A: In most states, yes. You typically need to be a licensed medical doctor (MD) or doctor of osteopathy (DO) to serve as a medical director, especially in businesses that involve direct patient care. Always check your state’s laws, as requirements vary widely.
Blaz Korosec is the CEO and co-founder of Medical Director Co., a nationwide platform that connects aesthetic and wellness professionals with licensed physicians for medical oversight, supervision, and compliance support. With a background that bridges healthcare operations, regulatory compliance, and entrepreneurial growth, Blaz has worked closely with hundreds of nurses, physician assistants, and clinic owners to help them legally launch and scale medical spas, telehealth weight loss clinics, IV hydration businesses, and aesthetic practices.
Blaz holds a degree in finance from Southern Methodist University (SMU) and has built a diverse portfolio of businesses ranging from healthcare to hospitality, including a national network of RV parks and medical clinics. Through MedicalDirector.CO, he’s developed a deep understanding of the state-by-state rules that govern collaborative agreements, PC/MSO structures, telemedicine protocols, and injectable treatments—translating complex legal frameworks into easy-to-implement solutions for clinicians and business owners.
Blaz is particularly passionate about helping nurses and mid-level providers unlock business ownership opportunities, and he’s known for designing systems that streamline operations, boost revenue, and ensure long-term legal protection. His team includes former prosecutors, senior RNs, and physicians who together support a growing number of clinics across all 50 states.
When he’s not working, Blaz enjoys mountain biking, restoring properties, and exploring the outdoors with his wife. He’s based in Texas but works with clients nationwide.
