The threat of private equity to dermatology

[allseasons]

I constantly hear about the threat of private equity groups taking over older medical practices and decreasing wage for new doctors. I can see why this would be a threat for Ortho, Optho, Plastics, as the start up costs are very high for a private practice, but I often hear that PE groups will doom derm too, which never made sense to me.
From talking to private practice derms, start up costs are pretty low (in comparison to those others anyway) since not as much expensive equipment is needed.

PE groups mainly just put competitors at a disadvantage when there are high start up costs, so are they really that much of a threat to dermatology?

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[DarkHorizon]

I constantly hear about the threat of private equity groups taking over older medical practices and decreasing wage for new doctors. I can see why this would be a threat for Ortho, Optho, Plastics, as the start up costs are very high for a private practice, but I often hear that PE groups will doom derm too, which never made sense to me.
From talking to private practice derms, start up costs are pretty low (in comparison to those others anyway) since not as much expensive equipment is needed.

PE groups mainly just put competitors at a disadvantage when there are high start up costs, so are they really that much of a threat to dermatology?

Derm is the easiest picking… low liability, low cost, very lucrative. It has PE takeover written all over it. Blame the older greedy physicians selling out. Not PE. Of course it’s sinister because PE by definition is involved to make money, but this can’t happen if not for boomer physicians maximizing their profits and F’ing everyone else over.

 

[allseasons]

Derm is the easiest picking… low liability, low cost, very lucrative. It has PE takeover written all over it. Blame the older greedy physicians selling out. Not PE. Of course it’s sinister because PE by definition is involved to make money, but this can’t happen if not for boomer physicians maximizing their profits and F’ing everyone else over.

I can understand why PE can takeover existing practices for sure. What I don't understand is why that poses a substantial barrier to entry for new dermatologists creating private practices. Those same things you mentioned are also exactly why it's more difficult for PE to monopolize a field. The best fields for PE are typically high starting cost, low liability, very lucrative long term, as PE groups can overcome the barrier to entry easier than individual competitors.

Derm is the easiest picking, but the hardest to monopolize, at least from my understanding of the field.