kfcman289

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Should I be afraid? I have heard that the hoards of cosmetologists and PA’s will soon come charging down the hills claiming to be able to cure your acne and skin conditions. Do people who are actually involved in dermatology believe that this will be a threat to salary/ patient number in the foreseeable future?


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Indebt4Life

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What I am seeing is that everyone nurses, NPs, PAs, medical aestheticians, medical assistants, Joe the Plumber are opening med spas and doing cosmetics. Cosmetics for derm bring in extra cash and defray the cost of the complex medical patients with skin conditions. We report those sham clinics to the state medical board to be investigated. Some have been arrested.
 

MOHS_01

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What I am seeing is that everyone nurses, NPs, PAs, medical aestheticians, medical assistants, Joe the Plumber are opening med spas and doing cosmetics. Cosmetics for derm bring in extra cash and defray the cost of the complex medical patients with skin conditions. We report those sham clinics to the state medical board to be investigated. Some have been arrested.
Simple, low cost, low risk cosmetic procedures will continue to slide down the ladder from trained MD to less trained MD to NP to PA to..... and the margins will trend toward zero. That is just the way it works. Complex medical derm patients will set you backward all day, every day, and twice Mon-Friday. Again, that's just the way it works. They don't pay E&M well enough to cover the cost structure to provide it plus leave a little extra for your trouble, so get used to that. I don't get the "arrested"; the license to practice medicine is unrestricted in most states -- if you have a license to practice medicine, regardless of psych or plastic surgeon, you can legally do so. Scope of practice is generally not codified into law.

Derm has a good thing, no doubt. Probably not as good as others believe it to be, not as good as many sell it as, but it beats the ever living **** out of those poor guys in rheum or ID.... our diversity of practice is our only savior.
 
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bronx43

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Derm has a good thing, no doubt. Probably not as good as others believe it to be, not as good as many sell it as, but it beats the ever living **** out of those poor guys in rheum or ID.... our diversity of practice is our only savior.
I'm not sure rheum should be lumped in with ID, neph, or any other field with tons of work and low pay. At this point, infusions are still big business, and I don't know many private practice rheumatologists that make under $300k while working more than 40 hours a week.
Obviously, derm is better in terms of pay per work hour, but rheumatology isn't that far behind.
 

MOHS_01

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I'm not sure rheum should be lumped in with ID, neph, or any other field with tons of work and low pay. At this point, infusions are still big business, and I don't know many private practice rheumatologists that make under $300k while working more than 40 hours a week.
Obviously, derm is better in terms of pay per work hour, but rheumatology isn't that far behind.
The [s=]days[/s] hours of “profiteering” from biological infusions are numbered, nothing good lasts long. I honestly don’t see how E&M driven specialties make it.
 

bronx43

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The days hours of “profiteering” from biological infusions are numbered, nothing good lasts long. I honestly don’t see how E&M driven specialties make it.
Totally agreed. Many of the previous generation of rheumatologists already rode off into the sunset after pocketing millions from it. Newer generation will be back to E&M. I’m hoping that as the age of biologics end, disease modifying osteoarthritis drugs will come out.
But I don’t see this as a E&M versus procedural dichotomy in the long run. The gravy train for all will run out before long.
 
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I see two interesting areas in cosmetics and medical derm:

Derms don't own cosmetics. The ones that think they do are silly and deluding themselves. They barely get any training in residency anyway yet act like they own cosmetics. It's laughable because it's so delusional. Yes, sure, some residencies give more training but it's not rocket science. I do a ton of cosmetics as a derm and I'm telling you it's not rocket science. The reason people do cosmetics is that it pays well but you also get a lot of other headaches to deal with and need to be prepared. I'm still not convinced that a newbie graduate is better than a nurse injector that has done hours and hours of injecting. In fact, try taking a complaint to the medical board. They literally don't care because the complications are not more. In fact, I've taken care of more complications from my fellow derms.....we see what we want to see. So yes, NPs and PAs will "encroach" this space but it was never owned by derms anyway. Derms just think they owned it.

The bread and butter of derm that people will find harder to compete with is medical and surgical dermatology. Yes NPs and PAs will encroach but they will never be as good as a derm. It doesn't pay as well so you don't see derms complaining about turf wars here. Again, there are good, bad, ugly in every specialty. Derms built this house (by employing a bunch of PAs) and now they complain? LOL to the max. The gravy train will continue to run but only for those derms that are willing to work with NPs and PAs and also willing to set appropriate boundaries as part of a healthy symbiosis. The rest will just spend their lives complaining.
 

username456789

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I see two interesting areas in cosmetics and medical derm:

Derms don't own cosmetics. The ones that think they do are silly and deluding themselves. They barely get any training in residency anyway yet act like they own cosmetics. It's laughable because it's so delusional. Yes, sure, some residencies give more training but it's not rocket science. I do a ton of cosmetics as a derm and I'm telling you it's not rocket science. The reason people do cosmetics is that it pays well but you also get a lot of other headaches to deal with and need to be prepared. I'm still not convinced that a newbie graduate is better than a nurse injector that has done hours and hours of injecting. In fact, try taking a complaint to the medical board. They literally don't care because the complications are not more. In fact, I've taken care of more complications from my fellow derms.....we see what we want to see. So yes, NPs and PAs will "encroach" this space but it was never owned by derms anyway. Derms just think they owned it.

The bread and butter of derm that people will find harder to compete with is medical and surgical dermatology. Yes NPs and PAs will encroach but they will never be as good as a derm. It doesn't pay as well so you don't see derms complaining about turf wars here. Again, there are good, bad, ugly in every specialty. Derms built this house (by employing a bunch of PAs) and now they complain? LOL to the max. The gravy train will continue to run but only for those derms that are willing to work with NPs and PAs and also willing to set appropriate boundaries as part of a healthy symbiosis. The rest will just spend their lives complaining.
Picture a Venn diagram. The “employs and trains lots of midlevels” circle and the “worries about midlevel encroachment” circles likely overlap very little.

Like many other aspects of our field, the old guard has repeatedly sold the next generations of Dermatologists up the river for a quick buck.
 
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Like many other aspects of our field, the old guard has repeatedly sold the next generations of Dermatologists up the river for a quick buck.
Very well said^, the dermatologists and now PE groups employing/training an army of midlevels are probably making millions, while the next generation of dermatologists may be lucky to find jobs and certainly not with the pay of today.

The market can only handle the flood of midlevels for so much longer before it takes a large hit. While residencies can only pump out 500 new dermatologists a year, there are literally no barriers to entry for the 1000s of graduating NPs/PAs. It's only getting worse.

I think dermatology will follow anesthesia with CRNA infiltration in the next 10-20 years. 1 derm "oversees" (signs off on) 3-4 midlevels and maybe only comes in for the complicated patients or when the midlevel is stumped. I think it's a terrible model, and the blame can be placed entirely on the older generation of dermatologists who choose to train midlevels to add a few 100k to their bottomline. Private Equity is pressing the gas on the acceleration to the bottom.
 
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The threat of midlevels is almost everywhere except in the surgical specialties where it's difficult to train them... Even so, you see them in neurosurgery, IR, surgery etc...
 

Merely

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Simple, low cost, low risk cosmetic procedures will continue to slide down the ladder from trained MD to less trained MD to NP to PA to..... and the margins will trend toward zero. That is just the way it works. Complex medical derm patients will set you backward all day, every day, and twice Mon-Friday. Again, that's just the way it works. They don't pay E&M well enough to cover the cost structure to provide it plus leave a little extra for your trouble, so get used to that. I don't get the "arrested"; the license to practice medicine is unrestricted in most states -- if you have a license to practice medicine, regardless of psych or plastic surgeon, you can legally do so. Scope of practice is generally not codified into law.

Derm has a good thing, no doubt. Probably not as good as others believe it to be, not as good as many sell it as, but it beats the ever living **** out of those poor guys in rheum or ID.... our diversity of practice is our only savior.
People keep comparing psych to derm, any thoughts on that?
 

estingray

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A fair number of my patients are folks who have been seeing the local "Derm" PAs and NPs and have been mismanaged for years. I just inherited one who probably has Reed Syndrome. Tons of leiomyomas in a strange distro. NP biopsied it, told him it was benign. Failed to mention that the strange pattern is concerning for Reed. Failed to order fumarate hydratase. In speaking with patient on the phone the other day he tells me his dad died of renal CA.

There's nothing to be afraid of because even the good ones are really, really bad at dermatology.


ETA: The NP didn't go ask her supervising derm about this because they DON'T KNOW WHAT THEY DON'T KNOW. Expecting them to go get help for the "difficult" cases is laughable because they have no idea what they are doing.
 

estingray

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Had a local, very important businessman walk into the clinic today just to tell me how happy he was. Local NP treating his tinea for 6 YEARS with topical steroids. Branded, expensive ones at that. 6 days of itraconazole and he is clear for the first time in 6 YEARS. Midlevels aren't a threat to you. They're a threat to your patients.
 

percyeye

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Sorry but Medicine selling every private practice to Private Equity or to a hospital is a much bigger threat than Mid-levels. Look at every Derm practice in the country. Usually 1 or 2 Physicians with an army of NPs/PAs under them. Medicine has done this to themselves.
 
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Agree with the general sentiments here.

1) Derms selling out to PE is a bigger threat. How big remains to be seen - many of these companies may not be as healthy as they appear - and many have overreached with acquisitions. So we'll see how the PE aspect changes as they begin to consolidate. My concern is the biggest players will survive and then merge, and then you'll basically be stuck with 1 group owning all the derm positions in a region. As soon as that competition is gone, percentages given to the physicians will go down. It'll be like private insurance companies.

2) Yes, midlevels and even just nurses will continue to come for cosmetic injections. If all you do is injectables, you're at risk. Dentists and FM docs are encroaching in this area as well. One of the most social-media-famous cosmetic injectors in the US hides the fact that s/he isn't a dermatologist or plastic surgeon very well. Some patients will care. Most will not.

3) There is still no replacement for a residency. Most of that residency training is in medical derm. Derms are shooting themselves in the foot when they graduate and start narrowing their skillset to only focus on a few things with lower barrier to entry. Keep your skillset as broad as possible. The variety is our best insurance.
 

zanzizic

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I’m a private practice dermatologist/Mohs surgeon. I happen to think that PAs are not bad for dermatology.

Let’s face it: there’s a whole heck of a lot of common non-acute diagnoses in dermatology. Warts, acne, eczema, folliculitis, psoriasis, basal cell carcinoma. There so much that general dermatologists can’t do it all. And if they don’t do it, somebody will. I happen to think that a physician assistant who is trained by a dermatologist will do better at treating those conditions than your average family doctor and definitely better than an internist.

From what I see, dermatology is in big demand. It takes weeks to get an appointment in my area and PAs are helping to fill some of the need. Are there some suboptimal PAs out there? Sure. But to be honest, most of the people who I see doing things inappropriately that make me shake my head are other dermatologists, not mid-levels. Most PAs that I know and refer to me are pretty timid about doing things above their pay grade.

Who is more of a threat to patients? The PA who biopsied a squamous cell carcinoma and refers it to the Mohs surgeon, or the general dermatologist who tries to curette that same SCC and them tries an excision on it a year later when it recurs. Those people who get in over their head with skin cancers are ALWAYS the dermatologist and not the PA. I see the dermatologists doing a lot of questionable things out of a profit motive that I don’t see the PAs doing.

I have personally have employed one PA for the last 12 years. She a really good provider and helps me see consults, follow ups, and assists me in surgery. I’ve taught her to do primary closures, flaps and grafts and will do them under my supervision in certain cases. She can now do them at a level that exceeds every single other (Non-Mohs) dermatologist in our city. I don’t hire her to make money for me, but to make my life easier. I’m booked six weeks out and I’d be booked even farther out if I didn’t have a PA. She can see my patient who is bleeding postoperatively and take care of it at 10 pm when I’m out of town.

Of course like other PAs, she cannot practice on her own. Once I’ve retired in the next 10-15 years she will likely go work for another Mohs surgeon in the area. She won’t be putting any other dermatologist out of business.

Yes I agree that Private Equity is a challenge for our specialty. I personally feel that the concern about mid-level providers is overblown.
 
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I have personally have employed one PA for the last 12 years. She a really good provider and helps me see consults, follow ups, and assists me in surgery. I’ve taught her to do primary closures, flaps and grafts and will do them under my supervision in certain cases. She can now do them at a level that exceeds every single other (Non-Mohs) dermatologist in our city. I don’t hire her to make money for me, but to make my life easier. I’m booked six weeks out and I’d be booked even farther out if I didn’t have a PA. She can see my patient who is bleeding postoperatively and take care of it at 10 pm when I’m out of town.

Of course like other PAs, she cannot practice on her own. Once I’ve retired in the next 10-15 years she will likely go work for another Mohs surgeon in the area. She won’t be putting any other dermatologist out of business.

Yes I agree that Private Equity is a challenge for our specialty. I personally feel that the concern about mid-level providers is overblown.
:clap:
 

Taurus

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I’m a private practice dermatologist/Mohs surgeon. I happen to think that PAs are not bad for dermatology.

Let’s face it: there’s a whole heck of a lot of common non-acute diagnoses in dermatology. Warts, acne, eczema, folliculitis, psoriasis, basal cell carcinoma. There so much that general dermatologists can’t do it all. And if they don’t do it, somebody will. I happen to think that a physician assistant who is trained by a dermatologist will do better at treating those conditions than your average family doctor and definitely better than an internist.

From what I see, dermatology is in big demand. It takes weeks to get an appointment in my area and PAs are helping to fill some of the need. Are there some suboptimal PAs out there? Sure. But to be honest, most of the people who I see doing things inappropriately that make me shake my head are other dermatologists, not mid-levels. Most PAs that I know and refer to me are pretty timid about doing things above their pay grade.

Who is more of a threat to patients? The PA who biopsied a squamous cell carcinoma and refers it to the Mohs surgeon, or the general dermatologist who tries to curette that same SCC and them tries an excision on it a year later when it recurs. Those people who get in over their head with skin cancers are ALWAYS the dermatologist and not the PA. I see the dermatologists doing a lot of questionable things out of a profit motive that I don’t see the PAs doing.

I have personally have employed one PA for the last 12 years. She a really good provider and helps me see consults, follow ups, and assists me in surgery. I’ve taught her to do primary closures, flaps and grafts and will do them under my supervision in certain cases. She can now do them at a level that exceeds every single other (Non-Mohs) dermatologist in our city. I don’t hire her to make money for me, but to make my life easier. I’m booked six weeks out and I’d be booked even farther out if I didn’t have a PA. She can see my patient who is bleeding postoperatively and take care of it at 10 pm when I’m out of town.

Of course like other PAs, she cannot practice on her own. Once I’ve retired in the next 10-15 years she will likely go work for another Mohs surgeon in the area. She won’t be putting any other dermatologist out of business.

Yes I agree that Private Equity is a challenge for our specialty. I personally feel that the concern about mid-level providers is overblown.
Good for you but if she was an NP instead of PA she could dump you and set up her own derm shop legally without any need for a supervising physician. Keep that in mind folks when you hire that midlevel help. You may be training your competition.
 

zanzizic

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I don’t know any derm NPs on their own. There’s a dermatologist in my city who has hired one and she functions like a PA.

Honestly though, a derm NP is not going to be your competition if you are a competent dermatologist. Patients are not going to gravitate to an NP except in perhaps remote rural areas.

There’s a lot of NPs out doing primary care and when that started the primary care physicians were saying the sky is falling!!!! Here we are years later and we have more of a primary care shortage than ever....
 

Taurus

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I don’t know any derm NPs on their own. There’s a dermatologist in my city who has hired one and she functions like a PA.

Honestly though, a derm NP is not going to be your competition if you are a competent dermatologist. Patients are not going to gravitate to an NP except in perhaps remote rural areas.

There’s a lot of NPs out doing primary care and when that started the primary care physicians were saying the sky is falling!!!! Here we are years later and we have more of a primary care shortage than ever....
It doesn’t matter that there are no independent derm NP currently or in any other specialty like cardiology or GI. What’s more important is that legally it’s possible. All they need is the training by yourself to feel comfortable enough after a few years to manage most cases by themselves and when to refer more complex cases to you (cherry picking). Then, they will look into the billing and insurance aspects. If they think they can get all their ducks in a row, they can strike it on their own. That’s how we have independent primary care NP’s because they followed this same game plan. So be careful of who you hire for your midlevel help.
 

MOHS_01

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I don’t know any derm NPs on their own. There’s a dermatologist in my city who has hired one and she functions like a PA.

Honestly though, a derm NP is not going to be your competition if you are a competent dermatologist. Patients are not going to gravitate to an NP except in perhaps remote rural areas.

There’s a lot of NPs out doing primary care and when that started the primary care physicians were saying the sky is falling!!!! Here we are years later and we have more of a primary care shortage than ever....
I think you may not have looked into this enough and overestimate the general public's valuation of your MD credentials. I can guarantee you it is a very small minority of people walking the street who will pay a 20% premium to see an MD for their refills, their routine stuff, etc. I'm not particularly worried about them taking my job, I'm worried about them diluting our value and driving down our compensation.
 

zanzizic

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Our compensation is being driven down, that’s for sure. By government and the insurance industry. And Private Equity may end up controlling the entire specialty seeing how our fellow derms are all selling out. I don’t see NPs having anything to do with it.

I live in a 1.5 million population metro area with a huge geographical catchment area around it that includes numerous smaller sized cities and towns and I don’t know a single NP doing derm out there.
 
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I’m a private practice dermatologist/Mohs surgeon. I happen to think that PAs are not bad for dermatology.

Let’s face it: there’s a whole heck of a lot of common non-acute diagnoses in dermatology. Warts, acne, eczema, folliculitis, psoriasis, basal cell carcinoma. There so much that general dermatologists can’t do it all. And if they don’t do it, somebody will. I happen to think that a physician assistant who is trained by a dermatologist will do better at treating those conditions than your average family doctor and definitely better than an internist.

From what I see, dermatology is in big demand. It takes weeks to get an appointment in my area and PAs are helping to fill some of the need. Are there some suboptimal PAs out there? Sure. But to be honest, most of the people who I see doing things inappropriately that make me shake my head are other dermatologists, not mid-levels. Most PAs that I know and refer to me are pretty timid about doing things above their pay grade.

Who is more of a threat to patients? The PA who biopsied a squamous cell carcinoma and refers it to the Mohs surgeon, or the general dermatologist who tries to curette that same SCC and them tries an excision on it a year later when it recurs. Those people who get in over their head with skin cancers are ALWAYS the dermatologist and not the PA. I see the dermatologists doing a lot of questionable things out of a profit motive that I don’t see the PAs doing.

I have personally have employed one PA for the last 12 years. She a really good provider and helps me see consults, follow ups, and assists me in surgery. I’ve taught her to do primary closures, flaps and grafts and will do them under my supervision in certain cases. She can now do them at a level that exceeds every single other (Non-Mohs) dermatologist in our city. I don’t hire her to make money for me, but to make my life easier. I’m booked six weeks out and I’d be booked even farther out if I didn’t have a PA. She can see my patient who is bleeding postoperatively and take care of it at 10 pm when I’m out of town.

Of course like other PAs, she cannot practice on her own. Once I’ve retired in the next 10-15 years she will likely go work for another Mohs surgeon in the area. She won’t be putting any other dermatologist out of business.

Yes I agree that Private Equity is a challenge for our specialty. I personally feel that the concern about mid-level providers is overblown.
I am glad that you are utilizing a single mid-level that you've trained for over a decade, and doing so responsibly, however, that is not the norm. Big PE groups are hiring fresh grads with no experience and letting them loose after 6 weeks of shadowing.

A midlevel classmate who graduated while I was in school, had a 4 week rotation in dermatology, and was hired immediately after graduation, and is now "practicing dermatology". This person has essentially no oversight, no experience, but is likely treating 100+ patients per week. Basically acting like an independent MD derm, but with no knowledge of dermatology.

A single office having a midlevel to help offset some of the work is probably okay. Having 3 midlevels operating independently with 1 MD in the office "over-seeing" and signing off on charts is dangerous, irresponsible, and will destroy any hopes of job security in the future.

The US trains <500 dermatologists per year, but we graduate 25,000+ midlevels per year. Make no mistake that if unethical practices continue to hire untrained midlevels at the rate they are doing now, there will be no job market in 20 years.
 
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zanzizic

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I’m definitely not for hiring PAs in large numbers to run patients through high-volume mills. It seems that PE firms are mostly doing this. And who is letting them in the door of our specialty? Those are our dermatology colleagues selling out. I don’t see how that is going to change.

Not many practices in my city have sold to large PE groups but a few have. I’m super busy with referral only Mohs cases now but as practices get snapped up and they all start having to refer to the bought and paid for Mohs guy who has sold out to the large group I’m going to have to adjust my practice model.

In short, what we are seeing with PAs is merely a symptom of what the derms are doing in selling out medical practices to big business.
 
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MOHS_01

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I’m definitely not for hiring PAs in large numbers to run patients through high-volume mills. It seems that PE firms are mostly doing this. And who is letting them in the door of our specialty? Those are our dermatology colleagues selling out. I don’t see how that is going to change.

Not many practices in my city have sold to large PE groups but a few have. I’m super busy with referral only Mohs cases now but as practices get snapped up and they all start having to refer to the bought and paid for Mohs guy who has sold out to the large group I’m going to have to adjust my practice model.

In short, what we are seeing with PAs is merely a symptom of what the derms are doing in selling out medical practices to big business.
I feel your pain re: referrals and the consolidation of the market. Sucks.

Question -- does the state you reside in have strict scope of practice laws? Does it require a collaborating physician? Unrestrained independent practice by NPs? Granted, my state is more "liberal" re: NP autonomy, but I know of a few who do it currently and several more with eyes toward it. I've remained in their good graces and, for better or worse, they are actually rather coachable and represent a better referral source than the BC derms who have increasingly suffered from mission creep over the past several years in response to the tougher go of things now.
 

zanzizic

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Yes, my state allows them to practice more or less unrestrained.

I do see that more females in derm (from derms to PAs) means more referrals as the majority of providers are less surgically aggressive now
 

username456789

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Roy Geronemus just sold out his practice to PE. So yes the PE threat is very very real.
 

doctalaughs

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I’m definitely not for hiring PAs in large numbers to run patients through high-volume mills. It seems that PE firms are mostly doing this. And who is letting them in the door of our specialty? Those are our dermatology colleagues selling out. I don’t see how that is going to change.

Not many practices in my city have sold to large PE groups but a few have. I’m super busy with referral only Mohs cases now but as practices get snapped up and they all start having to refer to the bought and paid for Mohs guy who has sold out to the large group I’m going to have to adjust my practice model.

In short, what we are seeing with PAs is merely a symptom of what the derms are doing in selling out medical practices to big business.
If midlevels are supervised properly they can be an asset in a small segment of Derm practices - ie, “you see the acne/warts” in a very algorithmic way that I teach you. Even simple procedures can be taught.

However, they are not safe for what they are used for and the majority of our practice - skin checks, rashes/psoriasis etc. Sure, most times it will go okay but they just don’t have the experience in dermoscopy, rare presentations (like the reeds example above etc). And it leads to over or under treatment.

The PAs in my last practice generated several missed melanoma lawsuits. The other PAs I’ve watched do mole-ectomies of a ridiculous number of benign nevi, or send every tiny thing to mohs (ie cannot distinguish aggressive from indolent, don’t know what you can ed&c etc). I guess that sounds good if you are the mohs surgeon but it’s not good practice or patient care.
 
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Skindoc83

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Roy Geronemus just sold out his practice to PE. So yes the PE threat is very very real.
That’s very disheartening to hear. Zitelli and Brodland recently sold to a smaller PE backed group too. They seem to be making a concerted effort to buy practices of thought leaders. They are peaches that bring nothing tot table and I blame the Baby Boomers unending greed for what will be ruination of this field and all of the younger doctors autonomy
 

doctalaughs

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Wow, didn’t realize those Mohs surgeons had all sold out. Very discouraging
It’s simple- stop ever sending a single referral to mohs practices within PE. Tell every pcp you know that if they send to these mills their patients will likely be seen by a midlevel instead of a real specialist as they deserve.

Learn the names of the midlevels in these practices and remind every patient that said they saw X “nurse” /or “assistant” — that they actually never saw a dermatologist.

I’ve seen hundreds of patients that I literally cure of 4 tiny nodular or superficial bcc’s in 8 minutes (with a shave followed by edc) that have been in PE mills where they needed to see the PA q 2-3 months followed by mohs Q2 months and a bill of 10-20k a year - Believe me they are astounded (and become spokesmen against those practices) when they realize they have been cheated for years.
 
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zanzizic

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It’s not that simple. I’m a solo referral Mohs surgeon. My competition just sold out to PE but the other gen derms in town don’t seem to mind and he hasn’t had a drop off in referrals.

I’m busy so it doesn’t affect me....yet. Derms are selling out a little at a time. Once PE has captured most of the market where will my referrals come from? My best move at that point will be to sell out too.
 

doctalaughs

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It’s not that simple. I’m a solo referral Mohs surgeon. My competition just sold out to PE but the other gen derms in town don’t seem to mind and he hasn’t had a drop off in referrals.

I’m busy so it doesn’t affect me....yet. Derms are selling out a little at a time. Once PE has captured most of the market where will my referrals come from? My best move at that point will be to sell out too.
I know- it’s tough solo. I’m in a larger practice with an in-house mohs guy so he gets almost all the referrals from us. We’ve been approached by PE and it’s really tempting as a partner to take the buy-out but we feel it would do our patients a dis-service and (so far) there are enough youngish-partners that the salary hit over the years and liability of supervising more midlevels outweighs the offers.

We are not in a very competitive/saturated market but if there were practices around selling out to PE you better believe we’d be advertising their methods all around town and to the PCP-world. Reap what you sow.
 
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zanzizic

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For now I’ll stay solo. Soon I’ll have to decide whether to sell ou to PE or perhaps start hiring gen derms and build my own referral base. I don’t want to compete with general derms but if they all start selling out l may have to
 

Solodyn

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The selling price of a practice range from 3-10x EBITA depending on how badly they want you. This can translate to ~7-15 million dollars on a general derm practice or 10-25 million dollars on a Mohs practice with army of PAs feeding the Mohs.

Another option is to sell the practice to a newly graduated BC Derm at the valuation of $1Million good will plus 500K of equipment for 1.5 million. I don't know how anyone can not sell the practice to PE when they retire at this price disparity. There is no new BC Derm who can buy the practice at PE valuation. It is no surprise that many of the AAD leadership sold themselves to PE and become PE spokespersons. You cannot fight that kind of economic forces.
 
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KeikoTanaka

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I don't understand why reimbursement codes are the same value for MD/DOs and Midlevles. If they just made the midlevel codes reimburse less, that would de-incentivize the rampant use of midlevels and make them used for their original purpose. Plus im sure insurance companies would love that.
 
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KeikoTanaka

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Generally speaking, Midlevel Reimbursement is around 85%-90% of MD/DO
That's not a big difference considering their salaries are typically 33%-50% of what physicians make. Also, didn't Washington state just pass a bill like 2-3 years ago stating that NPs and PAs who bill the same code deserve the same pay/reimbursement for the same level of work? So this may be changing if that catches on nationally.

Makes no sense they can bill 85-90% of what a physician would, meanwhile their malpractice, debt, and knowledge/training is a fraction of what a physician goes through.

If anything, an improperly supervised (or independent midlevel completely) deserves to have a higher malpractice (proportionally) than a physician doing the same level of work. If you were an insurance company, wouldn't you make the 30-year-old dare-devil stunt man pay more for life insurance than the 20 year old bank clerk? The midlevels in this case are the 30 year old stunt man, who is arguably more dangerous with higher liability.
 
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zanzizic

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The selling price of a practice range from 3-10x EBITA depending on how badly they want you. This can translate to ~7-15 million dollars on a general derm practice or 10-25 million dollars on a Mohs practice with army of PAs feeding the Mohs.

Another option is to sell the practice to a newly graduated BC Derm at the valuation of $1Million good will plus 500K of equipment for 1.5 million. I don't know how anyone can not sell the practice to PE when they retire at this price disparity. There is no new BC Derm who can buy the practice at PE valuation. It is no surprise that many of the AAD leadership sold themselves to PE and become PE spokespersons. You cannot fight that kind of economic forces.
Wait, there’s no way PE is paying solo gen derms 7-15 million dollars for their practices
 

doctalaughs

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Wait, there’s no way PE is paying solo gen derms 7-15 million dollars for their practices
I’m also not quite sure where those numbers are coming from having seen several offers - or if there is an error in that post. I certainly was never offered even close to 7-15 million (even I couldn’t refuse that - as it would far outweigh the earnings drop even for a 20 year career).

In addition I’ve seen dermatologists try to ask a 1-1.5 mill for their solo practice... but generally this is wishful thinking and I’ve never seen anyone actually sell for that, unless they really have a ton of equipment.
 

reno911

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Wait, there’s no way PE is paying solo gen derms 7-15 million dollars for their practices
Yeah, that's not happening.

I've heard of a single dermatologist getting that amount in a PE sale, but it's never a solo derm. It's generally a partner in a large derm group with a lot of midlevels and a good numbef of of non-partner, employed derms.

If you're in that situation, you could get paid quite a bit.

All this talk about selling out the specialty is noble and all, but I'm pretty sure every single person posting something like that would "sell out the specialty" if the price is right. If someone offers you multiple millions, those principles are going to be are going to be harder to cling to than a lot of you think.

I'm an employed doc, so I'll never be in a position to sell out, but if I were, I'm sure there is some amount of money I couldn't say no to. Especially if I'm late career. So while I wish that people weren't selling out, I definitely understand.
 
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Solodyn

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It is really not an unreasonable amount of offer. We are assuming a single general derm physician practice with 3 PAs. That can reasonably bring in 2.5 Million dollars a year. Let us say it is sold at 5x EBITA, it will get you conservatively 10 million. If PE really wants your practice because you corner the market, or if you are an AAD leader, or if you are particularly famous, they may increase the multiplier.

In real life with all the people I spoke to, the multiplier of the EBITA is tied to the number of years of the contract you are required to stick around. Therefore, if you get a 5x EBITA offer, you have to stick around as an employee for 5 years. So in a sense, you are paying for your own buyout. If you are relatively early in your career, the sale will not make sense since you can buy yourself out in 5 years anyway. You could have simply keep working for 5 more years and have all the revenue and still own your practice. However, if you are retiring and sailing off into the sunset, this will be a great deal for you. You get 10 million as opposed to 1.5 million selling to a new BCD derm.

In addition, I heard that the PE doesn't even pay you in cash when you sell. They pay you in "shares of the company" so the performance of the PE firm will determine the value of your shares thus the return. The goal is for the "second bite of the apple" where the shares will either go public or go for a resale and you get paid more than what you buy in the shares. Therefore, after you sell, you will work hard at the clinic for the remaining 5 years and tell all your friends (or constituents if you are an AAD leader) how wonderful PE is and everyone should sell because the value of your shares depends on it.

I agree with reno911 that everyone has a price. If I build a practice where someone will pay me $10 million, then that will be the market price. It is really worth that much because someone will pay for it. Why would I short myself 8.5 million by selling it to BCD? You can argue that it is unethical to short yourself that kind of money you work so hard for by building a successful practice.
 

MOHS_01

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It’s not that simple. I’m a solo referral Mohs surgeon. My competition just sold out to PE but the other gen derms in town don’t seem to mind and he hasn’t had a drop off in referrals.

I’m busy so it doesn’t affect me....yet. Derms are selling out a little at a time. Once PE has captured most of the market where will my referrals come from? My best move at that point will be to sell out too.
There's the old bitter, nasty reality setting in. Sucks, doesn't it.
 

MOHS_01

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It is really not an unreasonable amount of offer. We are assuming a single general derm physician practice with 3 PAs. That can reasonably bring in 2.5 Million dollars a year. Let us say it is sold at 5x EBITA, it will get you conservatively 10 million. If PE really wants your practice because you corner the market, or if you are an AAD leader, or if you are particularly famous, they may increase the multiplier.

In real life with all the people I spoke to, the multiplier of the EBITA is tied to the number of years of the contract you are required to stick around. Therefore, if you get a 5x EBITA offer, you have to stick around as an employee for 5 years. So in a sense, you are paying for your own buyout. If you are relatively early in your career, the sale will not make sense since you can buy yourself out in 5 years anyway. You could have simply keep working for 5 more years and have all the revenue and still own your practice. However, if you are retiring and sailing off into the sunset, this will be a great deal for you. You get 10 million as opposed to 1.5 million selling to a new BCD derm.

In addition, I heard that the PE doesn't even pay you in cash when you sell. They pay you in "shares of the company" so the performance of the PE firm will determine the value of your shares thus the return. The goal is for the "second bite of the apple" where the shares will either go public or go for a resale and you get paid more than what you buy in the shares. Therefore, after you sell, you will work hard at the clinic for the remaining 5 years and tell all your friends (or constituents if you are an AAD leader) how wonderful PE is and everyone should sell because the value of your shares depends on it.

I agree with reno911 that everyone has a price. If I build a practice where someone will pay me $10 million, then that will be the market price. It is really worth that much because someone will pay for it. Why would I short myself 8.5 million by selling it to BCD? You can argue that it is unethical to short yourself that kind of money you work so hard for by building a successful practice.
Almost, but not quite -- EBITDA is calculated after paying market based salaries for the physicians, so the number is significantly lower than that. Everything else is spot on, though; you are selling out your colleagues, juniors, etc, or self funding your own buyout. It's a raw deal for those who trusted you to hold the umbrella.
 
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doctalaughs

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Not quite -- EBITDA is calculated after paying market based salaries for the physicians, so the number is significantly lower than that.
This is exactly correct and why these offers are not for anything close to 10 million. In addition, most practices aren’t “one dermatologist and 4 PAs.” There are just not enough patients that are willing (or appropriate) to fill the midlevel schedules. Usually you’ll have 1 Derm per PA (if that). To get EBITA of 2.5 million it’s likely not a solo practice for the exact reason mohs01 pointed out. So that 5-10 million you are referring to is likely split between 2-3 partners.

In my case (5 partners, 3 non-partners, 4 midlevels) we never got very far with PE negotiations but it was likely going to be 1.5-2 million per partner. Nothing to sneeze at but if you look at the likely drop in yearly income, likely increase supervision ratio and possible patient load (as well as concerns of decline in patient care, plus screwing over the junior docs) it’s certainly not all roses.

That being said if I were offered 12 million personally I would be asking where to sign. Everyone does have a price.