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Shining a light on PE ownership.

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US

US Dermatology Partners

healthcare
PE-OWNED

Network of dermatology practices across the United States.

PE-OWNED

Acquired by Ares Management2016-06-01

View PE Firm Profile

What Made It Great

“

Accessible dermatology care from local physicians in convenient locations.

What PE Will Likely Do

Predictions

Reduction in the number of dermatologists and nurses, leading to longer wait times for appointments and less personalized care

HIGH LIKELIHOODBased on: Ares Management's track record of debt loading, cost cutting, and underinvestment in acquired companies

Shift towards less experienced or lower-cost staff like physician assistants or nurse practitioners instead of board-certified dermatologists

HIGH LIKELIHOODBased on: The healthcare industry playbook showing the common PE tactics of staffing reduction, real estate sale-leaseback, billing upcoding, and service line cuts

Closure or consolidation of less profitable dermatology practice locations, reducing access to convenient local care

HIGH LIKELIHOODBased on: The timeline of quality and access degradation seen in similar past cases of PE-owned healthcare providers

Increased pressure on dermatologists to see more patients per day, leading to shorter appointment times and less thorough examinations

HIGH LIKELIHOODBased on: The timeline of quality and access degradation seen in similar past cases of PE-owned healthcare providers

Deferral of investments in new technology, equipment, and facilities upgrades, causing the quality of diagnostic and treatment capabilities to stagnate

HIGH LIKELIHOODBased on: The timeline of quality and access degradation seen in similar past cases of PE-owned healthcare providers

Expected Timeline

Phases
0-6 monthsCompleted

“0 to 6 months months”

Announcements of 'optimization' and 'efficiency' initiatives, likely including a leadership shuffle

6-12 monthsYOU ARE HERE

“6 to 12 months months”

Initial staffing cuts and service reviews, with some practice locations being targeted for closure

12-24 months

“12 to 24 months months”

Noticeable decline in patient satisfaction due to longer wait times, shorter appointments, and lower-experience providers

24-36 months

“24 to 36 months months”

Potential closure of less profitable practice locations, quality scandals due to medical errors or patient safety issues

36+ months

“36+ months months”

Possibility of bankruptcy or sale to another operator, further disrupting patient access and continuity of care

Similar Cases

Other companies that followed a similar path after PE acquisition

Operating

Steward Health Care

Cerberus Capital Management·2010

See full case study
Operating

Envision Healthcare

KKR·2018

See full case study
Operating

Hahnemann University Hospital

Cerberus Capital Management·2018

See full case study
Operating

Sound Physicians

Summit Partners·2019

See full case study
Operating

Emergency Physician Partners

H.I.G. Capital·2020

See full case study

What You Can Do

Take Action

Actions

  • Be aware of any changes in your dermatology provider's staffing, locations, and service offerings

  • If you notice longer wait times, less time with your provider, or any decline in the quality of care, consider switching to a non-PE-owned dermatology practice

  • Stay informed about any news or issues related to US Dermatology Partners, and be prepared to advocate for your access to high-quality dermatological care

Alternatives

Non-profit health systemsSAFE

Community-focused healthcare

Kaiser PermanenteSAFE

Integrated managed care consortium

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"US Dermatology Partners is now PE-owned. Here's what that means for you."