The paper’s authors stand by their research and claim “requested corrections” were to protect reputations and not correct inaccuracies

Private equity companies have invested in and acquired clinical laboratories and anatomic pathology groups for the past 25 years. It’s not unusual to find private equity firms buying other medical specialty practices as well. But questioning the reasons behind such acquisitions by private corporations, or physicians’ participation in such practices is, apparently, a no go.

At least that’s what the Journal of the American Academy of Dermatology (JAAD) experienced when it published a peer-reviewed article authored by four dermatologists who wrote, “…junior dermatologists are increasingly seeking employment without ownership in private equity-backed corporate groups whose primary fiscal responsibility lies with their investors.” The authors further suggested that, “Dermatologists should be aware of this history, given the ability of corporations and private equity groups to shape the present and future of our field.”

Some of the views presented in the paper did not sit well with George Hruza, MD, among others. Hruza is an Adjunct Professor of Dermatology at St. Louis University, and the Director of the Laser and Dermatologic Surgery Center in St. Louis, Mo., At that time he was slated to be the next president of the American Academy of Dermatology (AAD) and is now ending his one-year tenure as President-elect. Hruza is also an assistant-editor at the JAAD and wrote for the New England Journal of Medicine (NEJM) Journal Watch Dermatology.

Hruza expressed his “concerns” to the JAAD’s editor, Dirk Elston, MD, Professor and Chairman of the Department of Dermatology and Dermatologic Surgery at the Medical University of South Carolina in Charleston. Elston temporarily removed the article from consideration for publication while the article’s authors had a chance to address so-called “factual errors,” according to The New York Times.

The paper has since been restored and is available for download from multiple scientific publication sites, as well as the JAAD site.

It should be noted that Hruza was not the only person who expressed concerns over the voracity of the claims made by the paper’s authors. Conversely, some dermatologists openly supported the authors’ claims on Facebook and condemned the JAAD’s removal of the paper, the NYT reported.

Creating a Controversy

Following positive response to a presentation titled, “Corporatization and the Rise of Private Equity in Dermatology,” four dermatologists formed an organization called the Group for Research of Corporatization and Private Equity in Dermatology and published their analysis of the increasing trend of private equity firms to acquire and operate “outlier” dermatology practices.

The NYT described outlier practices as “those that perform an unusually high number of often rare, well-reimbursed medical procedures, and bill high amounts to Medicare.” NYT also noted that “many practices backed by private equity firms have opened or acquired labs to process pathology specimens, potentially another source of profit.”

The paper hypothesized that the increasing number of equity-owned businesses in the field of dermatology is disruptive to that profession. The authors provided evidence that the trend has emerged due to the availability of equity funds, high student debt, and the desire for work/life balance in younger dermatologists. 

“It was interesting when we ran the numbers and we were counting how many practices with billing outliers were being acquired by private equity,” co-author Joseph Francis, MD, a dermatologist and Adjunct Clinical Professor of Dermatology, Department of Dermatology, University of Florida College of Medicine, told the NYT. “With every revision of the paper, that number kept increasing. So, it didn’t seem like an anomaly.

“It wasn’t clear whether these investors realized that the high billing might point to anything irregular,” Francis added. “They might have just seen that this was a practice with booming business.”

Sailesh Konda, MD, co-author of the paper, a board-certified dermatologist and Assistant Clinical Professor of Dermatology in the Department of Dermatology, University of Florida College of Medicine, stated that he and his co-authors spent a year researching and writing the paper. After the article was submitted for review, they received constructive feedback, mostly suggesting they maintain a neutral tone.  

“We strived to not use any polemic words, which could be interpreted as bias,” Konda told the NYT. “We decided to just deal with the facts, which would speak for themselves.”


Two of the authors of the paper, Sailesh Konda, MD (above left), and Joseph Francis, MD (above right), were informed by the editor of the JAAD that they could either correct the “factual errors” contained in the paper or retract the article. However, according to the NYT, the authors stood by their facts and “claimed the requested corrections had to do solely with protecting the reputation of the dermatology profession and certain individuals within the American Academy of Dermatology, the association that publishes the journal.” (Photo copyright: The New York Times.)

The Complainers

The complaints, which primarily came from private equity executives and dermatologists associated with private equity firms, included legal threats, the NYT noted. Hruza, MD, was among those individuals who had reservations about the article. He specifically objected to the conclusion that “influential dermatology leaders are being recruited to work for and promote dermatology practices backed by private-equity firms” and stressed that “implying motivation is a stretch,” the NYT reported.

Hruza also felt that, even though he was not specifically named in the paper, he was easily identifiable by references made by the authors within the article. One of the revisions requested by the journal editor was to remove any indirect references to influential dermatologists, including Hruza.

Research Continues

Konda said he intends to continue his research into private equity and how it is affecting the field of dermatology. “I am passionate about this topic,” he stated. “I realize we live in a capitalist society and money is a driving force behind many decisions regardless of the industry. However, I believe there has to be a balance between profit and patient care.”

The fact that the paper was removed from the journal’s website is a notable development in the field of peer-reviewed medical journals. Such journals are widely considered to be an important tool for researchers and scientists to receive feedback regarding their work. In this case, an article that was unflattering to private equity and dermatology was removed from public view and access.

The experience of the dermatology profession with private equity is compelling; one those in pathology and clinical laboratory medicine should study. Private equity companies have been investing in and acquiring clinical laboratory companies and anatomic pathology groups for decades and will likely continue to do so.

—JP Schlingman

Related Information:

Why Private Equity Is Furious Over a Paper in a Dermatology Journal

Corporatization and the Rise of Private Equity in Dermatology, Pt. 1

Corporatization and the Rise of Private Equity in Dermatology, Pt. 2

Future Considerations for Clinical Dermatology in the Setting of 21st Century American Policy Reform: Corporatization and the Rise of Private Equity in Dermatology

Dermatology Journal Removes Paper after Outcry from Private Equity Firms

Legal Threats Force Retraction of Peer-reviewed Article about the Problems with Private-equity-backed Dermatologists

Six Concerns about Practice Consolidation