Practice types in dermatology
Dermatologists can choose from a diversity of practice types, from independent to group and institutional. Each of these practice types comes with trade-offs between between autonomy and support, benefits and risks. There are also new practice models, meant to improve value and contain costs. Use the AAD resources below to learn more about different practice types and choose the type that’s right for you.
Independent
Independent practices involve greater autonomy, flexibility, and control over clinical and business decisions.
Solo practice: Operating your own clinic offers a high degree of independence but requires managing both clinical care and business operations.
Cash and concierge: These practices operate outside of traditional insurance systems and typically involve direct payment from patients, relying on strong, ongoing patient relationships.
Group
Group practices usually involve collaboration and sharing of resources, with more support for administration.
Small group: These practices with 6-15 dermatologists may offer administrative support and opportunities for shared decision-making.
Midsize group: These larger practices consist of multiple dermatologists working together within a shared business structure.
Large group: These multisite practices typically provide centralized administrative support standardized operations which can help support work-life balance though they may involve reduced physician autonomy.
Institutional
Large academic or government institutions may offer opportunities for research or more complex cases.
Academic medical center: These medical centers often involve teaching, research, and complex cases along with structured policies, lower salaries, and reduced autonomy.
Veteran Affairs hospital: VA hospitals serve veterans, often with opportunities for research and exposure to a diverse range of cases, in structured systems with set compensation models.
Military practice: Active service often involves financial benefits, opportunities to practice in diverse locations, and exposure to challenging cases, though with military service requirements and structured career paths.
New practice models
New practice models focus on value-based medicine, reducing costs, and providing integrated care.
Independent Practice Association (IPA): In an IPA, physicians maintain independent practices but join a contracting organization for payer negotiations and administrative functions.
Group practice without walls (GPWW): Physicians operate from separate office locations while coordinating financial and administrative functions collectively.
Teledermatology: Telemedicine uses technology to support greater scheduling flexibility, efficient triage, convenient follow-ups, and collaboration.
Accountable care organization (ACO): An ACO is a pay-for-performance model that integrates patient care across settings, seeking to optimize outcomes and limit costs.
Joint practice: A joint venture is a collaborative business arrangement where two or more practices come together as shareholders in a new entity or contract to achieve mutual goals.
Merged practice: This model combines two or more practices to expand geographic reach, diversify services, and gain access to greater financial resources.
Private equity: Private equity and venture capital groups have increasingly invested in dermatology practices
Selling your practice
The resources below offer guidance on methods for valuing your practice, considerations around private equity, and things to watch for in a sales contract.
Valuing your practice: Access our Q&A on how to value your practice, with a focus on EBITDA.
Private equity ownership: See our map of private equity ownership in dermatology.
