Why Dermatology Groups Hit the Software Consolidation Question First

When a specialty consolidates quickly, its software problems arrive early. Dermatology is a clear example. Groups in this field have been acquiring and merging practices for more than a decade, and each acquired office tends to arrive with its own scheduling habits, its own billing setup, and its own collection of tools. For many multi-location dermatology groups, the result is less one practice with five offices than five practices sharing a logo.

That makes dermatology worth studying even if you run a different kind of practice. The problems it hit first are the ones other specialties are now meeting.

Dermatology consolidated earlier than most

The consolidation itself is well documented. A 2019 study in JAMA Dermatology counted 184 dermatology practices acquired by private equity–backed groups between 2012 and 2018, with yearly acquisitions rising from 5 in 2012 to 59 in 2017. A 2022 study in JAMA Health Forum found that in 2019, 7.5% of dermatologists worked in private equity–acquired practices, the highest share among the six specialties it examined.

The wider trend points the same way. The AMA's 2024 Physician Practice Benchmark Survey found that only 42.2% of physicians were in physician-owned private practice, 18 percentage points lower than in 2012, while the share working in practices of 50 or more physicians had risen to 18.3%. Practices are getting larger and more often spread across sites, whoever owns them.

Growth by acquisition has a software side effect. When you open five locations yourself, they usually start on the same tools. When you acquire them, you inherit whatever each one chose.

Why a dermatology stack fragments faster

Dermatology also carries an unusual mix of work under one roof, and each kind of work tends to bring its own software.

• Medical dermatology runs on insurance: eligibility checks, prior authorizations, claims, and denials.
• Procedural and surgical work, such as biopsies and Mohs surgery, adds pathology results, surgical scheduling, and longer appointment blocks.
• Cosmetic services are usually self-pay, with packages, memberships, retail product sales, and before-and-after photography.

An EHR may handle some of this well and some of it awkwardly. So groups add a point-of-sale system for the cosmetic side, a separate tool for memberships, a texting tool for reminders, and a spreadsheet to reconcile it all at month end. Multiply that by the number of acquired locations, each with slightly different choices, and the stack grows faster than the group.

The cost shows up in three places.

Front-desk training. In a May 2025 MGMA Stat poll, practice leaders named medical assistants and front-office staff as the most frequent turnover hotspots. Every tool in the stack is something the next hire must learn, and every location-specific variation makes it harder for staff to cover a shift at another office.

Reporting. When medical and cosmetic revenue live in different systems, and each location set those systems up differently, a simple question such as "what did each location produce last month, by service line?" turns into a manual exercise.

Patient experience. A patient seen for a medical concern at one location who books a cosmetic treatment at another may exist as two separate records in two separate systems. Staff notice, and so do patients.

What consolidation actually means

"Software consolidation" is often heard as "pick one vendor and force everyone onto it." Sometimes that's right. But groups that handle this well tend to separate two decisions.

The clinical record. The EHR is the hardest system to change and the one where specialty depth matters most. Many groups do standardize on one EHR over time, but as a deliberate, staged migration rather than a side effect of each acquisition.

The operational layer. Scheduling across locations, intake, cosmetic sales and memberships, staff management, and reporting are where most day-to-day friction lives. This layer is usually easier to unify than the EHR, and unifying it removes most of the duplicate entry and month-end reconciliation.

In day-to-day terms, a unified operational layer means a front-desk coordinator at any location can see availability across all of them, a cosmetic package sold at one office can be redeemed at another, and the monthly report by location and service line comes from one place instead of three exports. None of that requires every location to be on the same EHR on day one. It requires the systems around the EHR to agree on who the patient is, what was booked, and what was paid.

Separating the two lets a group make progress without betting everything on a single migration. It also clarifies the build-or-buy question, because off-the-shelf products tend to fit the clinical record better than they fit a group's cross-location operations. The custom versus off-the-shelf guide walks through how to weigh that choice.

A practical sequence for a growing group

Consider a hypothetical group that has grown from two offices to five, three of them acquired. A workable sequence looks like this:

1. Inventory each location separately. List tools, costs, renewal dates, and who uses what. The 30-minute software audit is a good template. Expect the lists to differ more than you think.
2. Standardize the process before the platform. Agree on one way to book a new patient, one intake form, one way to sell and track a cosmetic package. Software can't unify locations that work differently.
3. Unify the operational layer. Bring scheduling visibility, intake, cosmetic sales, and reporting into one place, connected to whichever EHRs are in use today.
4. Plan the EHR decision on its own timeline. Line it up with contract end dates rather than forcing it early.
5. Set a rule for the next acquisition. Decide now which systems a new location adopts on day one, which it may keep temporarily, and when temporary systems will be retired.

Questions to ask before the next acquisition closes

Due diligence usually covers payer mix, providers, and leases. It rarely covers software in any depth. A few questions make a real difference later:

• Which systems does the practice use, and when does each contract end?
• Who owns the data, and in what format can it be exported?
• Which workflows exist only in a spreadsheet or in one person's head?
• Does every vendor that touches patient information have a business associate agreement in place?

The answers won't change whether you buy the practice. They will change how long integration takes and how much it costs.

What to do this week

Ask each location manager for a list of every system their front desk touches in a normal day. Put the lists side by side. The differences between them are your consolidation roadmap, and they're usually more revealing than any vendor demo.

If your group is working through this, the page on software for multi-location medical practices explains how we approach it for dermatology and other specialty groups.

If you're weighing what a fix would cost, our guide to how much custom software costs breaks down build, maintenance and three-year totals, and the software stack cost calculator adds up what your current tools cost today.