The U.S. population aged 70 years and older was about 38 million in 2020. It is expected to grow to about 53 million by 2030. This change affects the healthcare system in many ways. It affects dermatology directly because aging skin often needs more care. Older people have more skin problems like skin cancers, precancerous spots, and chronic skin conditions.
About one in five people will get skin cancer by age 70. Skin cancer is the most common cancer in the U.S. In 2023, about 187,000 people will be diagnosed with melanoma. Non-melanoma skin cancers affect millions of people. Over 5.4 million cases have been treated in 3.3 million people in recent years. Even though most non-melanoma skin cancers have high survival rates—over 99%—these cases still mean more work for dermatology, especially for older adults.
Other common skin problems for older adults are actinic keratosis (a precancerous spot), eczema (affecting 26.1 million people in the U.S.), and psoriasis (about 8 million people, with 30% also having joint problems). There are also cosmetic concerns from aging, like wrinkles and spots. Because these patient groups are growing, dermatologists see more complex cases and patients needing ongoing care.
In the U.S., dermatology practices usually offer both medical and cosmetic services. Medical dermatology treats skin diseases like cancer, eczema, psoriasis, and infections. Cosmetic dermatology focuses on procedures that improve looks and fight signs of aging.
The dermatology field is growing about 6.5% a year. Medical dermatology grows about 4.0% per year. Cosmetic dermatology grows faster, about 8.5% yearly. This growth matches the baby boomer generation’s interest in looking younger and handling skin aging.
Cosmetic procedures include Botox injections, dermal fillers, chemical peels, laser hair removal, microdermabrasion, and body sculpting. In 2019, cosmetic dermatology made nearly $11.1 billion in revenue, a 25.7% increase in three years. Patients aged 40 to 69 make up about 75% of those getting cosmetic treatments. This group will stay large for years.
People usually pay for cosmetic procedures out of their own pockets. This often means steady income and higher profit margins than many medical dermatology services. Medical dermatology depends more on payments from Medicare, which provides 30% to 60% of revenue for many practices. Medicare payments have shown little growth or even gone down when adjusted for inflation since 2001. This creates financial pressure on practices to stay profitable.
The U.S. has a shortage of dermatologists. There are about 11,865 active dermatologists providing patient care now. Nearly 45% are 55 years or older. Many of these older dermatologists may retire soon, which will reduce the number of doctors even more and make the shortage worse.
The number of dermatologists per population grew a little over past decades—from 1.4 per 100,000 people in 1970 to about 2.78 per 100,000 in 1999. But the need will grow to about 3 dermatologists per 100,000 in the next 20 years because of aging and rising skin cancer cases. There are more dermatologists in cities than in rural areas.
This shortage causes long wait times for patients. In large cities, the average wait for a new dermatology appointment is about 35 days. Long waits can cause worse health results, especially for urgent cases like skin cancer that need quick treatment.
To handle the demand, dermatologists are working more with non-doctors like physician assistants (PAs) and nurse practitioners (NPs). From 2002 to 2007, the use of PAs and NPs in dermatology offices increased. PAs went from 15% to 23%, and NPs from 8% to 10%. These staff members help with the doctor shortage but add complexity to managing the practice, billing, and following rules.
With rising demand for all types of dermatology and fewer doctors, many practices join management groups. These groups help with things like marketing, payroll, finance, and getting money to grow. For example, DermCare Management helps practices keep control while lowering the work needed for administration.
Management groups help keep patients happy and coming back by focusing on customer needs. This is important since big practice groups and private investors are creating more competition. These groups also help with planning when doctors want to sell or retire from their practice.
Running a dermatology practice efficiently is key to making money. Expenses often use up 72.9% to 75.1% of the money earned. If costs go down by just 3%, profits can grow by about 11-12%. This shows how business skills help practices do better.
Medicare payments are not growing fast and sometimes go down when adjusted for inflation. This means practices must make their work and billing more efficient to keep running well.
New technology is changing how dermatology care happens. Many practices now use teledermatology for remote visits and follow-ups. This means fewer in-person visits and helps reach patients far away.
Diagnosis tools using images and laser treatments are getting better. These advances help give accurate care and less downtime after treatment.
Cosmetic dermatology also uses new tools. There are better soft-tissue fillers, laser drug delivery systems, and less invasive methods. These improvements help meet patient interest in appearance and create new income sources.
Using Artificial Intelligence (AI) and automation is becoming important in dermatology practices. AI tools help with scheduling appointments, sorting patients, billing, and managing records. These tasks usually take a lot of time.
Front-office phone systems powered by AI can answer many patient calls. These systems give quick replies to questions, confirm appointments, refill prescriptions, and share instructions before visits. This lowers wait times and stops patients from hanging up.
For busy clinics with long waiting lists, these tools ease the work for front office staff and improve patient satisfaction by keeping communication quick.
AI also helps doctors by analyzing skin images to find early signs of skin cancer and other conditions. This can improve how accurately doctors diagnose problems.
Connecting electronic health records (EHR) with AI and automation helps keep records clear and billing correct. This is important because billing rules in dermatology are complicated.
By using AI and automation, practices can handle staff shortages better, see more patients, reduce mistakes, and improve profits. These factors are important to grow while the U.S. population ages.
Medical practice administrators and IT managers have important roles in helping dermatology practices meet the needs of an aging U.S. population. Knowing how demographics affect medical and cosmetic dermatology helps with planning and using resources well. Focus on running the practice efficiently through partnerships and using technology like AI phone systems and workflow tools. This helps provide good care on time despite fewer doctors.
Investing early in these areas can keep patients happy, manage income better, and prepare dermatology clinics for growth as more older patients need care and skin conditions become more complex.
An aging population, rising demand for medical and cosmetic procedures, increased awareness of skin health, and the fragmented nature of dermatology practices contribute to its attractiveness. The shortage of dermatologists and growing ancillary services like Med Spas further enhance investment potential.
Medical dermatology practices generate revenue primarily from Medicare, accounting for 30% to 60% of their income. Other revenues come from private insurance and out-of-pocket payments.
The authors estimate a sustainable market growth of 6.5%, with medical dermatology growing at 4.0% and cosmetic dermatology at 8.5% due to increasing demand and procedural innovations.
As the U.S. population ages, there is an increase in skin conditions like skin cancer and cosmetic concerns, driving up demand for dermatological services, particularly in older age cohorts.
Med Spas combine traditional spa services with medical procedures, allowing for a diversified revenue stream. They appeal to consumers seeking a one-stop shop for aesthetic and wellness treatments.
Med Spas must adhere to complex regulations varying by state, requiring a medical director for supervision and, in some states, physician ownership. Employee certifications are also mandated.
Profitability margins for medical dermatology range from 24.9% to 27.1%. Operating expenses typically account for 72.9% to 75.1% of net revenues, affecting overall profitability.
Clinical innovations in dermatology are driven by advancements in imaging diagnostics, soft-tissue fillers, and less invasive procedure technologies, aimed at improving patient outcomes and minimizing complications.
COVID-19 initially caused a revenue decline in the cosmetic dermatology market due to restrictions on services. However, demand has since rebounded, with many practices reporting increased procedure volumes post-pandemic.
Investors face risks including regulatory complexities related to billing and coding practices, pressure to generate high revenues, and the potential shift in consumer demand toward at-home beauty treatments.
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