Most dermatologists think growth means signing a lease. They're wrong.

Medicare's 2025 conversion factor dropped 2.8%. Denial rates climbed to 11.8%, up from 10.2% just two years ago. Meanwhile, private equity keeps circling at 12-15x EBITDA.

Here's the uncomfortable math: 38% of dermatologists are 55 or older. A retirement wave is coming, and practices that don't grow will get absorbed.

But "growth" doesn't mean what most people think.

The 5,302 dermatology practices in the U.S. share one thing: their billing departments either enable growth or kill it.

Industry benchmark for A/R is 30-40 days. High performers hit under 30. If you're above 40, you're funding your payers' cash flow, not your own.

The denial problem is worse than most realize: healthcare systems spend $20 billion annually reworking denied claims, at roughly $117 per denial. And only 50-65% of denied claims ever convert to revenue.

Every billing problem you have today gets amplified when you add volume.

The instinct is backward. Practices see demand and lease space, but the smarter move is fixing what you have first.

35-40 day wait times drive 15-20% patient leakage. Patients who can't get in go somewhere else… or even worse, nowhere at all.

Then there's the no-show problem. 12-30% of appointments go unfilled because patients don't show up. That's capacity you already paid for.

A practice running 25% no-shows doesn't need a second location. It needs better patient communication, tighter scheduling protocols, and real accountability for follow-up.

Operating expenses run 72.9-75.1% of net revenues in dermatology. That's before you factor in the cost of recruiting, onboarding, and retaining providers.

Adding a new provider makes sense when they'll be cash-flow positive within a reasonable timeframe. Not when you're hoping volume will materialize. The practices that retain providers long-term do two things: pay transparently and set realistic expectations.

60% of medical groups reported increased denials last year. The clean claim rate benchmark is 95%+. If you're not hitting it, every new patient you add creates another claim that might not get paid.

A/R over 90 days should be under 15% of total. If yours is higher, you're not growing, you're just scaling a collection problem.

Recently, a Midwest practice discovered their previous billing company had been using modifier 52 incorrectly for several years. The result was $700,000 in underpayments. They didn't find it until they switched to a derm-focused biller and gained direct access to the people working their claims.

Transparency isn't a nice-to-have. It's how you catch problems before they become catastrophes.

Reimbursement isn't getting better. So where does expansion capital come from?

Operational discipline.

One Clarity client found $110,000 in annual savings by auditing two contracts: long-term disability insurance ($55,000) and medical waste disposal ($55,000). Their previous waste vendor was charging $1,000/month for a single box at one location.

Every contract deserves annual scrutiny. LTD. Waste disposal. Medical supplies. Lab services. Credit card processing. Most practices are overpaying somewhere.

Those savings compound. $110,000/year buys a lot of growth that doesn't require PE terms or debt service.

The overlooked growth play isn't always a new building, it's often the dermatologist down the road who's about to retire.

With 38% of dermatologists over 55, these conversations are everywhere. And the math is favorable: a fair payment for phone numbers, fax numbers, and patient charts buys continuity that patients want and retiring docs need.

When that phone rings, someone calling the number they've dialed for 35 years, they get you. With their chart already scanned. Ready to see them.

No debt. No lease. Established patients from day one.

Private equity isn't inherently bad. But it's not the only path, and it comes with trade-offs in autonomy and decision-making that many dermatologists underestimate.

The practices thriving without PE share common traits: disciplined billing, capacity optimization before expansion, provider economics that work, and relentless expense management.

They grow methodically. And they keep control.

When you're ready for an expert to make your practice's billing bulletproof, schedule a strategy call with our team.

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