Private Equity: The Bad and the Ugly.

Private equity's (PE) presence has grown within dermatology over the last decade, creating a new landscape for dermatologists to navigate. Although dermatology PE-backed groups (DPEGs) claim to partner with physicians and improve health care delivery, their actions show that investment returns and profits are prioritized. The history of PE in medicine, the corporate practice of medicine, maturation of the dermatology market, monopolistic practices, overleveraging of nonphysician practitioners, dependence on debt, training under PE, and professional and lifestyle considerations are discussed. Dermatologists should be wary of DPEGs in order to protect the profession and patients.

Financial Health of Private Equity-Backed Groups: Perspectives From Eye Care.

BACKGROUND: In private equity (PE) buyouts of medical practices, it is common for the PE firm to raise significant levels of debt in order to finance the purchase. This debt is subsequently shouldered by the acquired practice(s). There remains a scarcity of literature quantifying the effect of PE acquisition on the subsequent financial performance of eye care practices. We aim to identify and characterize debt valuations of ophthalmology and optometry private equity-backed group (OPEG) practices, which serve as an indicator of practice financial performance. METHODS: A cross-sectional study from March 2017 to March 2022 was conducted using business development company (BDC) quarterly/annual filings to the Securities and Exchange Commission (SEC). The 2021 BDC Report was used to identify all BDCs actively filing annual reports (Form 10-Ks) and quarterly reports (Form 10-Qs) in the United States in 2021. The public filings of BDCs lending to OPEGs were searched from the inception of the OPEG's debt instrument in a BDC's portfolio and the amortized cost and fair value of each debt instrument were tabulated. A panel linear regression was used to evaluate temporal changes in OPEG valuations. RESULTS:  A total of 2,997 practice locations affiliated with 14 unique OPEGs and 17 BDCs were identified over the study period. Debt valuations of OPEGs decreased by 0.46% per quarter over the study period (95% CI: -0.88 to -0.03, P = 0.036). In the COVID-19 pre-vaccine period (March 2020 to December 2020), there was an excess (additional) 4.93% decrease in debt valuations (95% CI: -8.63 to -1.24, P = 0.010) when compared to pre-pandemic debt valuations (March 2017 to December 2019). Effects of COVID-19 on valuations stabilized during the pandemic post-vaccine period (February 2021 to March 2022), with no change in excess debt valuation compared to pre-pandemic baseline (0.60, 95% CI: -4.59 to 5.78, P = 0.822). There was an increase in practices that reported average discounted debt valuations from 20 practices (1.6%) associated with one OPEG to 1,213 practices (40.5%) associated with nine OPEGs (including 100% of newly acquired practices), despite the stabilization of COVID-19-related excess (additional) debt. CONCLUSIONS: Debt valuations of eye care practices have declined significantly post-PE investment from March 2017 to March 2022, suggesting that the financial health of these groups is volatile and vulnerable to economic contractions such as the COVID-19 pandemic. Eye care practice owners must consider long-term financial risks and impacts of subsequent patient care when selling their practice to a private equity group. Future research should assess the impact of secondary transactions of OPEGs on the financial health of practices, practitioner lifestyle, and patient outcomes.

Publication Productivity Using H-Index to Evaluate Academic Success Among Fellowship-Trained Mohs Surgeons.

BACKGROUND: The h-index is a measure of research achievement using not only the number of publications of an individual, but also the impact of the publications. OBJECTIVE: The objective of this study is to evaluate the h-indices of Mohs surgeons within a variety of practice settings. MATERIALS AND METHODS: A list of all American College of Mohs Society (ACMS) members with corresponding fellowships years were collected using the ACMS membership directory. Publicly available demographic information was obtained including fellowship year, practice setting, PhD status, practice location (region), total number of publications, and h-index. Descriptive statistics were calculated to compare h-indices among the demographic data. RESULTS: A total of 1150 ACMS members were included. The Practice setting distribution was as follows: 10.6% academic, 85.7% private practice, and 3.7% combined. H-index differed significantly based on practice setting (p < .001), with higher h-indices in academic and combined settings compared with the private practice setting. Subanalysis among academic Mohs surgeons revealed higher mean h-indices among professors (23.9) > associate professors (10.6) > assistant professors (8.6) > clinical instructors (5) (p < .001). CONCLUSION: H-indices were highest among Mohs surgeons in the academic setting with increasing values correlating with higher academic rank and time since fellowship completion.

Risk of melanoma and nonmelanoma skin cancer with immunosuppressants, part II: Methotrexate, alkylating agents, biologics, and small molecule inhibitors.

In solid organ transplant recipients, skin cancer risk associated with posttransplant immunosuppression has been well-described, and screening practices generally reflect these risks. In addition to agents used posttransplant, other classes of immunosuppressants also have the potential to raise the risk of nonmelanoma skin cancer (NMSC) or melanoma. In the present manuscript, the evidence for melanoma and NMSC risk associated with methotrexate, cyclophosphamide, biologic cytokine inhibitors including TNF (tumor necrosis factor)-alpha and interleukin inhibitors, costimulation blockers such as abatacept, integrin inhibitors such as natalizumab, targeted B-cell, and T-cell inhibitors including CD20 (cluster of differentiate 20), CD52, and BTK (Bruton's tyrosine kinase) inhibitors, and JAK (Janus kinase) inhibitors is reviewed. Based on the available data, we recommend regular skin cancer screening for select nontransplant patients receiving immunosuppressive regimens that are shown to raise the risk of NMSC or melanoma. We also offer suggestions for conscientious use of these therapies in high-risk patients. Finally, a comprehensive summary of the relative risk associated with each immunosuppressant class and associated recommendations is presented.

Risk of melanoma and nonmelanoma skin cancer with immunosuppressants, part I: Calcineurin inhibitors, thiopurines, IMDH inhibitors, mTOR inhibitors, and corticosteroids.

Immunosuppression is a well-documented risk factor for skin cancer, as exemplified by the 65- to 250-fold higher squamous cell carcinoma risk, 10-fold higher basal cell carcinoma risk, and 0 to 8-fold higher melanoma risk in solid organ transplant recipients (SOTRs) receiving potent, prolonged courses of immunosuppressive therapies. Numerous immune system components have been shown to either suppress or promote tumor growth, and immunosuppressive drugs may have additional effects on proliferative pathways independent of the immune system. Thus, evaluation of the specific regimen by the dermatologist is key for assessing skin cancer risk in each patient. In the present manuscript, the immune-mediated mechanisms of skin cancer development and regression are first reviewed. Next, a synthesis of the evidence shows the differing effects of immunosuppressive agents commonly used in SOTRs on melanoma and nonmelanoma skin cancer risk. These include systemic calcineurin inhibitors, thiopurines, IMDH (inosine monophosphate dehydrogenase) inhibitors, mTOR (mammalian target of rapamycin) inhibitors, and systemic corticosteroids. Finally, recommendations for skin cancer screening in SOTRs are discussed. We further offer recommendations for select nontransplant patients who may benefit from routine skin cancer screening due to risks associated with specific immunosuppressant exposure, and we propose evidence-based strategies for minimizing high-risk immunosuppressant use in clinical practice.

Disparities in access for melanoma screening by region, specialty, and insurance: A cross-sectional audit study.

Background: Early detection of melanoma is critical for positive outcomes. However, access for the diagnosis of melanoma remains problematic for segments of the general population. Objective: To compare the rates of dermatology and family medicine practitioner acceptances for a public insurance (Medicaid) versus private insurance (Anthem Blue Cross) and clinic wait times for an appointment for a changing pigmented skin lesion concerning melanoma in rural and urban regions in California. Methods: Cross-sectional audit study between June 2017 and March 2019; scripted phone calls were made to dermatology and family medicine practices (FMPs). Results: Family medicine and dermatology practices in both regions had significantly decreased acceptance of Medicaid. Dermatology practices had 11.3% to 13.0% Medicaid acceptance rates that were less than FMP rates of 28% to 36%. In both regions, FMP wait times were 2.4- to 3.2-fold longer for public versus private insurance; there were little differences in wait times for the 2 insurance types in dermatology practices, in both regions. Limitations: Assessment of only 2 regions in the state of California. Conclusion: Delays at FMPs and insurance types limit access to melanoma screening in California for underserved segments of the general population, which has implications for melanoma outcomes and health policy.

A Retrospective Review of Histopathologic Features Associated with Increased Risk of Recurrence of Non-melanoma Skin Cancer After Mohs Micrographic Surgery.

Objective: Mohs micrographic surgery (MMS) is the gold standard treatment for non-melanoma skin cancer (NMSC). However, NMSC recurrence may occur in a small proportion of patients. The aim of this study was to identify histopathologic features seen on the final stage of previous MMS, which may increase the risk of NMSC recurrence. Methods: This was a single-institution retrospective study of 39 recurrent basal cell carcinomas (BCCs) and squamous cell carcinomas (SCCs), which were treated with MMS. Slides from the final stage of previous MMS were reviewed by two board-certified dermatopathologists for the following histopathologic features: perineural inflammation, dense inflammation, mucin, ruptured follicle, actinic keratosis, and missing tissue. Results: Twenty recurrent BCCs and 19 recurrent SCCs were included. Histopathologic features identified on the final stage of previous MMS included missing tissue from the epidermis, dermis, and/or subcutis (69%), actinic keratosis (51%), perineural inflammation (10%), and dense inflammation (8%). Ruptured follicle was present in one BCC case, and mucin was not identified in any cases. Limitations: Limitations include retrospective study design, small number of recurrent cases, single institution, and lack of a control group consisting of NMSC cases which did not recur after MMS. Conclusion: Mohs surgeons should carefully evaluate NMSC frozen sections for the presence of missing tissue, actinic keratosis, perineural inflammation, and dense inflammation as these histopathologic features may be associated with tumor recurrence. It is of paramount importance to acquire high quality frozen sections for thorough margin evaluation.

Trends in Debt Valuations of Private Equity-Backed Dermatology Groups Before and During the COVID-19 Pandemic.

Importance: Private equity (PE) firms have invested in and consolidated dermatology practices. Private equity firms typically operate by conducting leveraged buyouts, which occur when target companies are acquired with capital from PE firms and a combination of debt, which may include debt instruments held in business development corporations (BDCs). Objective: To investigate the valuations of dermatology PE-backed group (DPEG) debt instruments in BDCs' portfolios both before and during the COVID-19 pandemic. Design, Setting, and Participants: This cross-sectional study, conducted from August 1, 2016, to August 31, 2021, examined public financial statements filed by BDCs lending to DPEGs. The public filings of BDCs were searched from inception of the DPEG's debt instrument in a BDC's portfolio, and the amortized cost and fair value of each debt instrument were tabulated. Main Outcomes and Measures: The premium or discount at which each debt instrument was valued at a given time was calculated by dividing the difference between the fair value and the amortized cost by the amortized cost. Different testing methods were conducted for normal or nonnormal data to test differences in debt valuations across all DPEGs between 2 consecutive or nonconsecutive quarters. Results: The search of the public filings found 10 BDCs containing data on 9 unique DPEGs. Overall, there were 15 trackable DPEG debt instruments because multiple BDCs can hold debt instruments for a given DPEG. Data were available from August 2016 through August 2021. During the study time frame, the amortized cost of the loans for an individual DPEG ranged from a low of $1.7 million to a high of $100 million. The valuation of debt instruments was stable for many DPEGs until some were discounted starting in May 2018, with a significant decrease from May 2019 to August 2019 (-1.4%; 95% CI, not applicable; P = .04), prior to the COVID-19 pandemic. Another significant decrease occurred during the pandemic from February to June 2020 (-9.0%; 95% CI, -13.6% to -4.4%; P = .002). US Dermatology Partners decreased to the lowest valuation (Golub BDC, -39.7%; TCG BDC Inc, -48.8%; TCG BDC II, -48.8%) of the DPEGs examined in November 2020 even after receiving a $10 million forgivable Small Business Administration Paycheck Protection Program loan in May 2020. After pharmaceutical companies announced effective COVID-19 vaccine candidates in November 2020, there was a modest and significant improvement in debt valuations (2.3%; 95% CI, 0.2%-0.4%; P = .03); however, they remained discounted. Only PhyNet Dermatology's debt instruments improved to a premium valuation by August 2021. Conclusions and Relevance: Debt valuations of some DPEGs found in this cross-sectional study suggest a lower probability that their loans will be repaid in full. This could be a signal that some DPEGs are not performing well financially.

Squamous Cell Carcinoma in Situ: Review of Therapeutic Options with Emphasis on Treatment of Tumors of the Lower Extremity.

Squamous cell carcinoma in situ (SCCis), also known as Bowen's disease, is a common superficial malignancy of the skin. Treatment of SCCis is important to prevent invasion into the dermis as well as metastases. Treatment of SCCis may be challenging based on the location of the tumor, advanced age, immunosuppression, medical comorbidities, or desire for noninvasive treatment. SCCis on the lower leg can be particularly challenging to treat due to poor wound healing in the setting of suboptimal circulation. This report reviews the evidence for various treatment options of SCCis, including their advantages, disadvantages, and efficacy, with an emphasis on treatment of SCCis of the lower extremity. Treatment options discussed in this contribution include wide local excision, Mohs micrographic surgery, cryotherapy, curettage, imiqimod, 5-fluorouracil, 5-fluorouracil and calcipotriol, ingenol mebutate, tazarotene, photodynamic therapy, acitretin, laser therapy, and radiotherapy.

Opioid Prescribing Recommendations After Mohs Micrographic Surgery and Reconstruction: A Delphi Consensus.

BACKGROUND: Prescription opioids play a large role in the opioid epidemic. Even short-term prescriptions provided postoperatively can lead to dependence. OBJECTIVE: To provide opioid prescription recommendations after Mohs micrographic surgery (MMS) and reconstruction. METHODS: This was a multi-institutional Delphi consensus study consisting of a panel of members of the American College of Mohs Surgery from various practice settings. Participants were first asked to describe scenarios in which they prescribe opioids at various frequencies. These scenarios then underwent 2 Delphi ratings rounds that aimed to identify situations in which opioid prescriptions should, or should not, be routinely prescribed. Consensus was set at ≥80% agreement. Prescription recommendations were then distributed to the panelists for feedback and approval. RESULTS: Twenty-three Mohs surgeons participated in the study. There was no scenario in which consensus was met to routinely provide an opioid prescription. However, there were several scenarios in which consensus were met to not routinely prescribe an opioid. CONCLUSION: Opioids should not be routinely prescribed to every patient undergoing MMS. Prescription recommendations for opioids after MMS and reconstruction may decrease the exposure to these drugs and help combat the opioid epidemic.

The evolution of private equity in dermatology.

The first known entry of private equity (PE) in the clinical dermatology space was over a decade ago. There are now in excess of 30 PE-backed dermatology groups (PEGs) with a vision for dermatology. Many use the management services organization, which allows PE firms to circumvent corporate practice of medicine laws, align cooperative physicians, and set the foundation for PEG evolution. PEGs may have different characteristics depending on their stage of evolution; however, as they mature through the stages, they become increasingly similar to each other. This contribution will discuss the stages of PEG evolution in detail. Dermatologists should be aware of these stages so that they can understand a PEG's past and anticipate a PEG's future.