As part of our continued work in the physician practice management sector, Clint Bundy recently attended the American Academy of Dermatology conference in Boston. He had a busy couple of days where he met with numerous practice owners, industry consultants, and buyer contacts. Below are his key takeaways from that conference:
Consumerism of healthcare
The consumerism of healthcare continues to accelerate. Practice owners have recognized that patients look for solutions, advice, and convenience now. As Kyle Morham, Co-Founder of NextPatient, a technology firm servicing the dermatology and aesthetics market, said to Clint at AAD, “Online booking volume is growing across our customer base. It demonstrates patients’ preference for scheduling medical appointments online, which comes as no surprise given that patients book virtually every other service online, from food and entertainment to professional services.”
Robust dermatology market
The dermatology market is as strong as ever! The post-COVID environment is here from a business perspective, and practices are seeing full patient schedules across all key service areas, including medical, cosmetic (‘zoom boom’ effect) and Mohs. Finding talent (dermatologists, mid-levels, administrative staff) to support the growth of a practice continues to be a challenge for many practice owners.
Heightened buyer activity
There is continued buyer and investor demand for practices. Existing dermatology platforms (i.e. strategic buyers) and financial sponsors eager to get into the dermatology market are abundant today, which leads to options for dermatologists and cosmetic plastic surgeons. Buyers are finding fewer independent practice acquisition opportunities than several years ago, and valuation multiples have steadily increased for those remaining independent practices.
Advisory support + driving value
Advisory support is in demand by dermatologists and respected by buyers. With numerous options--full sale vs. majority equity recapitalization--practice owners like having an advisor experienced in the dermatology & aesthetics market to consult and to drive additional practice value. Furthermore, an investment banking representative focused on delivering value for the practice in a competitive sale process can be critical to the owner. As practice owners are often reminded in discussions with buyers, those acquirors are still in the business of buying quality practices for lower valuations.
“If I have to buy a practice through an investment banker-led process, then I am willing to pay up to 55% more than in a situation where I only have to negotiate with the practice owner.”
- Buyer and AAD conference attendee
