Response to letter to the editor from Bennett and further thoughts on the corporatization of dermatology and private equity–backed dermatology groups

Abstract

To the Editor: We read with interest Bennett's letter suggesting that private equity–backed groups (PEGs) have entered the dermatology space to counteract expansion of university and nonuniversity medical groups.1Bennett R. Further thoughts on dermatology and equity-owned dermatology practices.J Am Acad Dermatol. 2019; 81: e11-e12Abstract Full Text Full Text PDF PubMed Scopus (5) Google Scholar We agree that many university medical groups (UMGs) have expanded with university-owned community-based satellite clinics (UCSCs), which take advantage of the UMGs' reputation and insurance contracts. In our experience, physicians who practice in distant UCSCs have fewer opportunities for professional development, teaching, and research relative to those of their colleagues at the main institutional campus. Furthermore, some UCSCs, similar to PEGs, may skirt corporate practice of medicine laws and other laws.2FindLawCalifornia Medical Association Inc v. Regents of University of California.https://caselaw.findlaw.com/ca-court-of-appeal/1403063.htmlDate accessed: March 10, 2019Google Scholar Recently, an outpatient UCSC owned by a UMG in Massachusetts came under fire for charging facility fees, including an $800 bill to treat warts. The UMG paid $175,000 to settle multiple allegations of violating Massachusetts' consumer protection law. A statement from the UMG denied any wrongdoing and pledged to improve fee disclosures to patients, but no change in policy with respect to facility fees was made.3Boston Globe Kowalczyk L. To patients' surprise, a visit to urgent care brings steep hospital bill.https://www.bostonglobe.com/metro/2018/11/27/patients-surprise-visit-urgent-care-brings-steep-hospital-bill/oGjlaiSoytJ7Z45sGI55TI/story.htmlDate accessed: March 10, 2019Google Scholar The steep nonprofessional fees charged at some UMGs are likely the brainchild of hospital executives. Like physicians at PEGs, dermatologists employed at UMGs have little to no input on the business decisions made by these administrators. Nevertheless, UMGs are generally a positive force, and some have maintained a symbiotic relationship with their local dermatologic community. UMGs promote specialization in complex medical dermatology, spearhead research, serve as a safety net for indigent patients, and train the next generation of dermatologists. Health care dollars from highly profitable departments may fund residency positions and subsidize less profitable departments within a UMG's economic ecosystem, allowing the collective UMG to support the needs of the community. UMGs are the lifeblood and backbone of dermatology. In contrast, PEGs have a primary fiduciary duty to investors, and as noted by Bennett, to paraphrase the honorable justice C.J. Goodell, no imagination is required to consider the many ways in which this can interfere with the doctor-patient relationship.4Corporations cannot practice medicine in California: opinion by Hon. C.J. Goodell, judge in the Superior Court, in and for the city and county of San Francisco.Cal West Med. 1935; 43: 460-461PubMed Google Scholar Goodell analogized this relationship to that between lawyer and client; it is a relationship that requires autonomy and professionalism and is governed by a specific code of ethics (management of lawyers by nonlawyers is illegal).5American Bar Association Rule 5.4: Professional independence of a lawyer.https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_5_4_professional_independence_of_a_lawyerDate accessed: March 10, 2019Google Scholar Bennett appears to make an inherently contradictory statement that physicians can maintain autonomy even after selling their practices to PEGs, but at the same time he also acknowledges Goodell's assertion that a doctor working for a corporation lacks true autonomy and the ability to form an unadulterated relationship with patients. We are all colleagues regardless of our chosen practice model. We should all decry the private practice outliers who are overbilling patients and other payers, the chief executive officers of PEGs who are applying lower business-like ethical standards to medicine by consolidating these outliers and amplifying their abuses, and the UMGs that are billing inappropriate facility fees and thereby increasing health care costs and their university's margins. We encourage everyone to study the facts and preserve the independent decision making that our patients expect from us. Only through unity and transparency can we resist these external forces, maintain our autonomy, and preserve the integrity of our profession. Further thoughts on dermatology and equity-owned dermatology practicesJournal of the American Academy of DermatologyVol. 81Issue 1PreviewTo the Editor: The recent article by Konda et al1 addresses an important issue in dermatology—the increasing number of equity-owned dermatology practices (EODPs). These authors speculate that this business model is disruptive and has arisen because of the availability of equity funds, high student debt, and the desire for work-life balance in younger dermatologists. I believe that there is another important force causing dermatologists to sell their practices to equity groups—university and nonuniversity medical group (UNUMG) expansion into surrounding communities. Full-Text PDF