Some private equity firms are furious over a paper in a dermatology journal

This isn&#x27;t discussed much, but the healthcare provider industry has traditionally been a major sector of interest for private equity. Hospital companies like HCA, dental clinics, ambulatory surgery centers, etc.<p>Healthcare providers are attractive to private equity 1) because of stable, non-cyclical cash flow, 2) benefits to scale (ie better negotiating leverage with payers), 3) ability to easily increase revenue at small clinics by &quot;optimizing&quot; billing (ie use more lucrative codes for the same procedure) and practice management (optimizing procedure mix and scheduling) and 4) regulatory protection -- local monopolies enjoy durable economic advantages and often are politically entrenched as healthcare providers are major employers<p>These factors aren&#x27;t limited to private equity backed healthcare, though. Even non-profits take advantage of these things (sutter health in the bay area is an example). If you&#x27;re looking for why US healthcare is so expensive, this isn&#x27;t a bad place to start

People often wonder what the point of tenure is. Well this is it. Those authors need to not back down, and call attention to this. If they&#x27;re tenured researchers or professors, they should be able to make publications like this without fear or retaliation from the school or industry.

Can someone link to the paper? The best thing we can do to combat this sort of thuggery is to shine light on it and try to go full-on Streisand effect.<p>Edit - here it is:<p><a href="https:&#x2F;&#x2F;www.docdroid.net&#x2F;fhDjc7P&#x2F;konda-article-pe-copy.pdf" rel="nofollow">https:&#x2F;&#x2F;www.docdroid.net&#x2F;fhDjc7P&#x2F;konda-article-pe-copy.pdf</a>

It sounds to me that what is being monetized is the authority of doctors. There&#x27;s a lot of medical conditions where you rely on the doctor to tell you what to do. After all, you don&#x27;t have a degree in that.<p>Now I can buy a clinic and pressure all the doctors through an incentive scheme that they are not used to, and get them all to nudge the borderline cases into must-act cases. And chances are each individual case is somewhat defensible, and the doctor is still an authority. It&#x27;s perfect, the doctors are not even going to admit their bias. But as a whole, a lot of people will be on treatments that they wouldn&#x27;t have been on.

Paper isn’t even that bad really, just stating the obvious.<p>Academia isn’t built to cope with well funded adversaries. Journalists handle the heat much better, at least the NYT got hold of it.

What is the value that private equity and&#x2F;or VC are adding to dermatology? I guess what I&#x27;m asking is, why would the physicians be interested in sharing some portion of their income with these non-physicians?<p>Medicine, like other guild professions like law, dentistry, and accounting, is an enterprise which seems to naturally fit the partnership model instead.

I have no proof they are involved, but my wife and I both had a visit to a dermatologist last year. Both of us were then recommended for excisions. She was 29, I was 28.<p>Everything came back pretty much normal.<p>We were sent to this fern after a friend went there. He also had an excision. Also under 30.<p>Now, we feel pretty much like we were played. Maybe this is relevant to this issue.

Barbara Streisand effect in play. I never would have thought to be careful about this without this Push to silence criticism.

So I wonder if there is an opportunity to create a service that let&#x27;s you look up the center you are visiting, and seeing who the investors&#x2F; owners are. Then you can filter away any that has gotten bad stars&#x2F;reviews based on bad practices.<p>Fight vc money with vc money basically.

The core underlying issue is fee-for-service [1] which inherently incentivize overutilization of services.<p>We have been and should continue pushing for better alternatives. ACOs [2] and integrated managed care [3] are promising possibilities and there are assuredly others.<p>[1]: <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Fee-for-service" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Fee-for-service</a><p>[2]: <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Accountable_care_organization" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Accountable_care_organization</a><p>[3]: <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Kaiser_Permanente" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Kaiser_Permanente</a>

Young dermatologist here - its an interesting time for my and my derm friends. We frequently discuss if the introduction of a PE profit motive will shunt care away from the complex, comprehensive patient exam to a more &#x27;problem-focused&#x27; model.<p>The proposed changes to Medicare reimbursement - which essentially pays the same for an office visit regardless of complexity - seems to be also pushing that way.<p>Speaking only from personal perspective, helping complex patients is incredibly rewarding and I would absolutely hate for the system to steer the specialty away from that.

Discussion on reddit in &#x2F;r&#x2F;medicine, by actual medical professionals AFAICS:<p><a href="https:&#x2F;&#x2F;old.reddit.com&#x2F;r&#x2F;medicine&#x2F;comments&#x2F;9rpajq&#x2F;dermatology_article_discusses_vc_buying_up&#x2F;" rel="nofollow">https:&#x2F;&#x2F;old.reddit.com&#x2F;r&#x2F;medicine&#x2F;comments&#x2F;9rpajq&#x2F;dermatolog...</a><p>Copy of the starter comment by OP there:<p>&gt; <i>Starter comment: NYTimes discusses an article that details Venture Capital buying dermatology practices that do an unusually high proportion of high dollar procedures. The article made it through peer review and was posted as an article in press. It was suddenly pulled. The AAD’s incoming president works for an VC Owners clinic and sits on their board. Lawyers for one firm called lead authors institution to demand changes. This is a huge assault on academic freedom. More so than any nonsense from Washington. Coming on the heels of AAD telling multiple people incorrectly that they failed the board exam over the past few years, this is another major scandal that could result huge changes. Or retaliation.</i><p>From another comment there that is a tl;dr of some the problem:<p>&gt; <i>VC involvement in derm practices is a huge, huge issue. One of the bigger practices in town recently was bought by a VC firm, and, lo and behold, all their borderline melanomas now, after being read by their &quot;new&quot; pathologist, need re-resections to get more ti$$ue. I no longer refer to them. Don&#x27;t even get me started on electronic brachytherapy.</i>

After just finishing &quot;Bad Blood&quot;, the book by John Carreyrou on the Theranos fraud, this particular passage in the article had me incensed:<p>&gt; This week a lawyer for Advanced Dermatology and Cosmetic Surgery, which is backed by private equity and is the largest dermatology practice in the United States, called the general counsel at the University of Florida, where two of the authors are employed, demanding specific changes to the paper.<p>I&#x27;m disgusted by these high-powered law firms using thuggish tactics to try to silence critics. I have no problem with these lawyers responding to the article, in public, after it is published, but using the threat of expensive litigation to shut people up is just gross and morally bankrupt.

paywall source material alert...

I don&#x27;t care why because this is hacker news and I expect better article headlines than buzzfeed clickbait crap.

Conflict of interests on one side, sociopaths isolating a few words out of their context to have a rant on the other side; both are more dangerous than bad science, to be fair, but this is the spirit of the times.

The issue seems to come down as to wether or not the paper had factual inaccuracies. Many academic papers are withdrawn, just check out retractionwatch.com.