Private Equity in Dermatology: Should You Sell, Merge, or Stay Independent?
- Nate Jones, CPCU, ARM, CLCS, AU
- 1 hour ago
- 3 min read
Private equity (PE) investment in dermatology has accelerated rapidly over the past decade. Many dermatology practice owners are now facing a critical question: Should you sell to private equity, merge with another group, or remain independent?
Each path offers unique opportunities—and risks. This guide breaks down the key considerations dermatologists should evaluate when deciding how to position their practice for the future.
Why Private Equity Is Targeting Dermatology
Dermatology is attractive to private equity firms because of:
High patient demand and recurring visits
Strong cash flow and procedure mix
Opportunities to scale multi-location platforms
Growing cosmetic and elective service revenue
Read More: Dermatology consolidation trends at Dermatology Times
Understanding why investors are interested helps you negotiate from a position of strength.
Option 1: Selling to Private Equity
Selling to a private equity-backed platform typically involves selling a majority stake in your practice.
Potential Advantages
Immediate liquidity and exit opportunity
Reduced administrative burden
Access to capital for expansion, technology, and marketing
Potential Drawbacks
Loss of clinical and operational control
Pressure to meet growth and profitability targets
Cultural changes that may impact staff and patients
Find Out: How healthcare PE deals are structured at Becker’s Healthcare
Selling can make sense for owners nearing retirement or seeking a partial exit—but it’s not the right move for everyone.
Option 2: Merging With Another Dermatology Practice
A merger allows two or more practices to combine resources while maintaining more autonomy than a PE sale.
Benefits of Merging
Shared overhead and administrative efficiencies
Stronger negotiating power with vendors
Ability to expand service offerings and locations
Challenges
Aligning leadership styles and practice cultures
Complex legal and financial integration
Shared decision-making
Read More: Medical practice mergers explained at Medical Group Management Association (MGMA)
Mergers work best when practices share values, vision, and growth goals.
Option 3: Staying Independent
Many dermatologists choose to remain independent—and thrive.
Why Independence Still Works
Full control over patient care and clinical decisions
Flexibility in pricing, services, and growth pace
Strong local brand loyalty
However, independent practices must invest strategically in:
Marketing and patient experience
Operational efficiency
Risk management and compliance
Check Now: Independent practice sustainability insights at AMA – Private Practice Resources
Independence rewards owners who are proactive and business-minded.
Key Questions to Ask Before Deciding
Before choosing a path, consider:
What are your long-term personal and financial goals?
How involved do you want to be in daily operations?
Are you prepared for growth—or an exit?
How will each option impact your staff and patients?
There is no universal “right” answer—only the right answer for your practice.
Protecting Your Practice During Transition or Growth
Whether you sell, merge, or stay independent, risk exposure increases during periods of change. Proper insurance coverage is essential.
Key insurance for dermatology practices includes:
Wexford Insurance helps dermatology practices nationwide navigate growth, consolidation, and ownership transitions with tailored insurance solutions.
Final Thoughts
Private equity has reshaped the dermatology landscape—but it doesn’t define your only path forward. Whether you choose to sell, merge, or stay independent, success depends on aligning your business decisions with your long-term goals and protecting your practice from risk.
With the right strategy—and the right insurance partner—you can move forward confidently in an evolving dermatology market.
Contact us today.
FAQs
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