Private Equity in Dermatology: Effect on Price, Utilization, and Spending

Among other specialties, dermatology practices have increasingly been acquired by private equity firms. Dr. Robert Tyler Braun, instructor of population health sciences; Dr. Amelia Bond, assistant professor of population health sciences; Dr. Lawrence Casalino, professor of population health sciences; Yuting Qian, research coordinator for population health sciences; and Manyao Zhang, research data analyst for population health sciences, sought to understand the potential implications of these acquisitions in a new study in Health Affairs. The researchers analyzed commercial claims from the Health Care Cost Institute, ranging from 2012-17. They found that private equity firms mainly acquired larger practices with more commercially insured patients, and these practices had 4.7 to 17.0 percent higher volume of patient by dermatologist for up to nine quarters after acquisition. By 2017, private equity–owned practices employed four advanced practitioners for every ten dermatologists compared with three for non–private equity practices. Prices paid to private equity dermatologists for routine visits were three to five percent higher than those paid to non-private equity dermatologists at one and a half years after acquisition. The researchers did not find a significant impact on dermatology spending. They suggest continued tracking of private equity acquisitions.

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