EXPERT ANALYSIS FROM AAD 18
SAN DIEGO – Although the intrusion of private equity in the ownership and operation of U.S. dermatology practices that has been snowballing for a little under a decade is often bemoaned by dermatologists, at least some physicians in the field see it as a positive development.
“I think private equity investment is good for dermatology,” Clifford Perlis, MD, said at the annual meeting of the American Academy of Dermatology. “Dermatologists should be thrilled that private equity is here.” Investment by private equity companies into dermatology practices “adds value to practices, creates more practice options, enhances advocacy, and better manages the complexity” of practices, claimed Dr. Perlis , a dermatologist and Mohs surgeon who practices in King of Prussia, Pa.
Moreover, concerns about the entry of private equity into dermatology are misguided, he maintained. It does not lower the quality of dermatology, nor does it threaten solo practices or young dermatologists.
“The challenges to solo practice have nothing to do with private equity investment. It’s narrower insurance networks” that are squeezing out solo practices. He also expressed skepticism that private equity creates a barrier that interferes with the physician-patient relationship.
“Insurers and administrators already do that,” Dr. Perlis said in an interview. It’s “misguided” to place the blame on the financing. Rejection of private equity investment “clings to an outdated image of how medicine is practiced” that had already been disappearing for several decades before entry of private equity into dermatology began, he noted.
But other dermatologists have voiced concern about the changes brought by private equity investment.
“I’m frightened for the future of dermatology,” Jane M. Grant-Kels, MD , said at the meeting. “It shifts control [of patient care] away from dermatologists and into the hands of business and investors who are only interested in profit and not in quality of care,” she added.
She suggested that private equity ownership of practices results in loss of physician autonomy in making clinical decisions such as where patients are referred for Mohs surgery, where specimens go for pathology assessment, and how the office is staffed and what equipment is purchased. Financial interest can also push for increased patient volume, more procedures, and greater focus on the cosmetic side. Private equity “commodifies dermatology and lowers the quality of care,” said Dr. Grant-Kels, professor of dermatology, pathology, and pediatrics at the University of Connecticut in Farmington.
“Have we learned nothing from dermatopathology, which has been ruined” by private equity, she asked. “The only ones who benefit are those making the private equity investments.” She cited similar, recently published views from other dermatologists, such as a recently published viewpoint article written by Jack S. Resneck Jr., MD , professor of dermatology, University of California, San Francisco ( JAMA Dermatol. 2018 Jan 1;154:13-4 ).
Dr. Perlis and Dr. Grant-Kels had no disclosures. They spoke during a session on dermatoethics at the AAD annual meeting.