What if a Dermatologist-owner could realize some of the value he or she has built with the practice—while still retaining decision-making power over its clinical operations, guiding values, and future?
Myth #3: Private Equity Is a Threat to the Independent Practice of Dermatology
This myth is more a trick of perspective than anything else. If you asked the owner of a Dermatology practice “what’s the biggest threat to your practice?” you’d likely hear about the stress of working two full-time, high pressure jobs—being both a full-time Dermatologist and a full-time small business owner. Other threats might include complex regulatory reporting; coding, billing, and collecting; hiring and retaining staff; and just about everything associated with the EHR. The increasing difficulty in negotiating contracts with insurance companies would probably come up, as would the challenge of maintaining referral sources.
After naming these threats, Dermatologist-owners might remind themselves that they enjoy complete autonomy in all matters. They don’t have to answer to layers of hospital administration or vie with other specialties for resources. They also get to exercise their entrepreneurial side, not just their clinical skills, every day.
But what if they could have these things without the additional administrative burden?
This is exactly what private equity can offer single specialty dermatology groups when the proper governing structure is put in place: not a threat to the independent practice of Dermatology, but a solution to those threats.
While some might argue this last point, it is a fact that independent practitioners have faced daunting regulatory and market challenges since well before PE entered the field. (No one would trace complex compliance requirements to PE, for instance, or the push to implement EHRs.) In part to avoid these stresses, more Dermatologists are choosing to work in hospital and academic settings rather than in their own practices or in single-specialty groups.
To me, though, the notion of practicing “independently” doesn’t apply to a setting where the decision-makers are non-Dermatologists, or non-physicians. To me, working with Dermatologist peers in a physician-led, PE-backed group practice gives me the best of the clinical world—consulting with esteemed colleagues to provide superior patient care and exerting complete autonomy in how I treat those patients—as well as the best of the entrepreneurial world—where I have the capital to invest in new clinics and new treatments (both of which feed back, rightly, into patient care).
Forefront was started with the dream of preserving the independent, single-specialty practice of Dermatology, and treating PE as a bank has helped us realize that dream.