The Struggle to Expose Private Equity’s Role in Dermatology

On October 5, the Journal of the American Academy of Dermatology published a paper on its website that highlighted the increasingly popular practice of private equity firms acquiring dermatology clinics that conduct astonishingly high numbers of expensive procedures and bill large amounts to Medicare. In a highly unusual move for the organization, the paper was removed eight days later after receiving numerous complaints from people possibly associated with the behavior described in the article.

Like all articles published in the journal, it went through customary revisions and received feedback from reviewers. According to co-author Joseph Francis, MD, a Florida-based dermatologist, “It was interesting when we ran the numbers and we were counting how many practices with billing outliers were being acquired by private equity. With every revision of the paper, that number kept increasing,” he told The New York Times. “So it didn’t seem like an anomaly.”

In additional to private equity firms purchasing unusually financially successful dermatology practices, they’re also opening or acquiring labs to “process pathology specimens,” which is considered to be another possible money-making scheme.

Although the journal gave no explanation for pulling the article, Dirk Elston, MD, the editor, said that authors could either correct the “factual errors” in the paper or retract it. The authors assert that there are no factual discrepancies, and demands for corrections were voiced to protect the names associated with the American Academy of Dermatology. However, the following Wednesday, the authors issued some revisions.

For Sailesh Konda, MD, the paper’s lead author, the idea to write about the topic derived from his first-hand experience watching many of his trainees go work for private equity-backed practices. They told him that the leaders valued profits at the expense of patient care.