A Systematic Review: Landscape of Private Equity in Dermatology From Past to Present

The primary objective of this abstract is to define the growing trend of private equity (PE) backed consolidation of dermatology practices and explore its impact on patient care. The secondary objective is to better inform dermatologists of the acquisition process as well as how practices are valued in the event of a leveraged buyout. A systematic review was conducted using PRISMA guidelines using PubMed/MEDLINE and Web of Science in July 2021. Studies included were graded using the Oxford Center for Evidence-Based Medicine 2011 Levels of Evidence.1 A total of 18 articles met the inclusion/exclusion criteria. With the current environment of low interest rates combined with increasing cost of medical operations and non-clinical administrative burdens, PE is positioned to expand exponentially in total value through leveraged buyouts of solo and small dermatology groups.2 Selling dermatologists receive payment in form of upfront cash, and equity in escrow incentivizes them to continue the growth of their clinic so that it can be consolidated into a larger portfolio of practices to be sold to another buyer in 3-7 years at a far higher valuation. Within the fragmented $8.4 billion-dollar dermatology space, PE-backed practices represent approximately 10-15% of all private practices.3-5 Dermatologists should be aware of both the risks and the rewards of acquisition by PE given the fiduciary responsibility to shareholders and their patients. J Drugs Dermatol. 2023;22(4): doi:10.36849/JDD.6892 Citation: Sung CT, Salem S, Oulee A, et al. A systematic review: Landscape of private equity in dermatology from past to present. J Drugs Dermatol. 2023;22(4):404-408. doi:10.36849/JDD.6892.