Conference Coverage

Opinions clash over private equity’s effect on dermatology


 

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 may 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. The debate on this topic was presented during a forum on dermatoethics at the meeting, structured as a pro and con conversation. The organizers, including Dr. Perlis and Jane Grant-Kels, MD., chose the topics and assigned positions to each presenter, which do not necessarily represent their personal views.*

Dr. Clifford Perlis, a dermatologist in King of Prussia, Pa. Mitchel L. Zoler/MDedge News

Dr. Clifford Perlis

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 Rejection of private equity investment “clings to an outdated image of how medicine is practiced” that had already been disappearing for several decades before entry of private equity into dermatology began, he noted.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.

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