Industry consolidation continues to make headlines in the healthcare world. A recent Health Affairs report showed consolidation of both commercial payors and physician practices significantly impacts reimbursement rates.

According to the report, reimbursement rates for office visits are reduced by almost 20% when a payor’s market share increases. The study also found that physicians who are part of a larger provider group get paid more than their small-practice counterparts.

The implications of industry consolidation go beyond reimbursement rates. Patient access, recruitment and even supply purchasing are also affected. The bottom line is that diminishing leverage erodes small practices’ ability to be profitable.

Dermatology is still in the beginning stages of industry consolidation. However, there is strong evidence that these industry trends will also hold true for the practice of dermatology.

Case-in-point: QualDerm leveraged our larger provider network to:

• Negotiate a 7% reimbursement rate increase with the market’s largest commercial payor
• Reduce group medical malpractice rates with an industry-leading carrier by 42%
• Reduce the annual cost of physician-preferred supplies by 10%

Many physicians wonder how patients factor in to the consolidation equation.  Quality-of-care is a top concern. Under QualDerm’s partnership model, affiliated dermatologists maintain their clinical autonomy to ensure patient care remains at the highest level. What’s more, after affiliating with QualDerm, The Skin Surgery Center expanded its services to reach additional patients, many in under-served regions.

Dermatologists’ shift away from solo practices was discussed in a March, 2016, Dermatology Times article, titled Predicting the Future of Dermatology. The article referenced an American Academy of Dermatology (AAD) practice survey that found 35% of dermatologists practiced solo in 2014, down from 44% in 2007.

Once consolidation gains momentum within an industry, early adapters benefit financially and have greater control over the direction of their careers.

Contact us to learn more about how partnering with QualDerm can help you position your practice for sustainable profitability.

You can also learn more about the impact of consolidation at the 2017 AAD Annual Meeting. QualDerm CEO, Bill Southwick, will present Consolidation in the Market – What Does it Mean to You on Saturday, March 4 at 1:00 p.m. at the Orange County Convention Center in Orlando.