HealthDay News — Private equity (PE) firms have a stake in an increasing number of dermatology practices throughout the United States, according to a study published online July 24 in JAMA Dermatology.

Sally Tan, M.D., M.P.H., from Brigham and Women’s Hospital in Boston, and colleagues estimated the scope of PE-backed dermatology practice acquisitions geographically over time in a cross-sectional study. Acquisition and investment data were compiled using information from five financial databases; transaction data were supplemented with publicly available information.

The researchers found that from May 1, 2012, to May 22, 2018, 17 PE-backed dermatology management groups (DMGs) acquired 184 practices. As of mid-2018, these acquisitions accounted for an estimated 381 dermatology clinics. The total number of PE-owned dermatology clinics was considerably larger, as new clinics were not included (organic growth). There was an increase in practice acquisitions (transfer of ownership of existing practices from a physician to a PE-backed DMG) each year from five in 2012 to 59 in 2017. Thirty-four acquisitions took place from Jan. 1 to May 31, 2018. Clinics associated with acquired practices were identified in at least 30 states, with 36 percent located in Texas and Florida.


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“Operational and management differences between PE-backed and physician-owned dermatology practices have not publicly been well described; thus, their effect on patients is not fully understood,” the authors write. “Future studies should investigate the effect of PE-backed practice consolidation on practice patterns, health care expenditures, and patient outcomes.”

One author disclosed financial ties to the pharmaceutical industry.

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