DX / Differentials / DERMATOLOGY GROUPS

D-03 — GROWTH PLATEAU · DERMATOLOGY GROUPS

Growth has flattened — dermatology

The schedule is full and the number stopped moving

DIFFERENTIAL — LIKELY CAUSES, MOST LIKELY FIRST

1. 01

   [MED] Service mix, not panel size — the schedule is filling with the cheapest units of work

   A dermatology schedule can be completely full and economically flat, because the highest-volume codes in the specialty are also the lowest-paying. Growth in encounters does not translate into growth in allowed amount unless the mix moves.

   Across 12,616 dermatology-typed providers in CY2024, the median billed $188,072 in Medicare allowed amount on 496 beneficiaries; the 90th percentile billed $777,069 on 1,336. That is 4.1× the dollars on 2.7× the patients — the gap is mix and services per patient, not panel size. The economics behind it: Mohs first stage (17311) allows $581.52 in office; destruction of premalignant lesions beyond the first (17003) allows $6.22. Nationally 17003 is the single highest-volume dermatology code in Medicare at 12,701,462 services, and AK destruction (17000/17003/17004) is 17.2M of the specialty's 52.8M services.

   CMS, Medicare Physician & Other Practitioners PUF — by Provider and by Geography and Service, CY2024 (federal claims; percentiles computed across all 12,616 Dermatology-typed provider records). Medicare fee-for-service only — excludes Medicare Advantage, commercial, and 100% of cash-pay cosmetic work.

   NOT THIS IF — Your surgical and pathology codes already carry the majority of your allowed amount and the number is still flat. Then the constraint is capacity, catchment or payer mix — not what happens in the room.

2. 02

   [COS] The category grew by opening doors, not by converting demand — and so did you

   Cosmetic capacity is bought (a room, an injector, a device) and then sits idle. Adding another location adds revenue and adds the same idle capacity again, so the top line moves and the unit economics don't.

   Medspa total revenue growth ran 8% in CY2025, "fueled primarily by new locations rather than same-location gains (2%)." New guest visits declined 11% and existing guest visits fell 2%. In the same dataset, staff utilization is 38% at the median against 80% at the 90th percentile — a 42-point gap Zenoti calls the widest of any vertical it measures. The CY2024 series ran 47% average / 64% top-25% / 78% top-10%.

   Zenoti, 2026 Beauty & Wellness Benchmark Report — medspa edition (aggregated, anonymized transaction data from North America businesses on the Zenoti platform, calendar year 2025); 2025 edition for CY2024. Population skews toward larger multi-location operators; medspas are a minority sub-segment of Zenoti's ~30,000 global locations.

   NOT THIS IF — Your injector utilization already sits above 56% — Zenoti's 75th percentile — and the columns are genuinely full. Then flat cosmetic revenue is a ticket problem, not a chair-time problem.

3. 03

   [COS] Ticket, not traffic — the cosmetic line transacts at the bottom of the distribution

   The same treatment volume can produce half the revenue. Where the practice never packages, never presents a membership, and never attaches, the ticket sits at the floor and volume growth is the only lever left.

   Median medspa ticket is $216, against $346 at the 75th percentile and $484 at the 90th (CY2025). Revenue per service hour runs about $420 at the median and about $700 at the top decile, across a cohort ranging from under $100 to over $1,500 an hour. In that cohort membership is 7.2% of revenue and retail skincare 5.2% — neurotoxin alone is 22.9% and filler 9.6%.

   Zenoti 2026 Benchmark Report (CY2025) for ticket; CorralData Research, Q1 2026 Aesthetics Industry Benchmark (100+ aesthetics brands on-platform) for revenue per service hour and service mix. CorralData explicitly excludes dermatology and plastic surgery centers from its cohort — treat as a labelled proxy. CorralData's own caveat on mix: 47.5% of revenue is uncategorized because "modern PMS taxonomies don't cleanly bucket emerging service lines," which disqualifies any precise mix claim.

   NOT THIS IF — Your median ticket is already above $346. Then the flat line is a volume or utilization problem and the ticket work is a distraction.

4. 04

   Site of service is quietly repricing work you already do

   The same procedure pays roughly half in a facility setting as in the office. Practices that acquired hospital-affiliated surgical arrangements, or that moved surgical days into a facility for space reasons, take a large allowed-amount cut at constant clinical volume and often never see it as a marketing-adjacent problem — because it isn't one.

   17311 (Mohs first stage, head/neck/hands/feet/genitalia) allows $581.52 in the office setting and $289.90 in facility. Nationally, 895,107 of 934,948 17311 services are billed office — so the office rate is the specialty's norm, and a group billing facility is the exception paying for it.

   CMS, Medicare Physician & Other Practitioners PUF — by Geography and Service, CY2024 (national rows, place-of-service split).

   NOT THIS IF — Essentially all of your surgical and destruction volume is already billed place-of-service 11. Then this line is closed and you should stop looking at it.

5. 05

   [MED] Extender leverage is pointed at the wrong half of the schedule

   Dermatology splits cleanly into work a PA or NP can render and work only a physician can. Where physicians spend their day on destructions and level-3 established visits, the practice pays physician time for extender-rate work and the surgical block goes short.

   In CY2024, PAs and NPs rendered 33.1% of all Medicare tangential biopsies (11102) and 32.6% of all first-lesion destructions (17000) nationally — but 18 of 934,948 Mohs first stages. Mohs is a physician-only franchise by construction; there are 1,900 fellowship-trained Mohs surgeons in the country. On the extender side of the line, a dermatology PA's typical week is 32 scheduled face-to-face hours and a median 42 full-body skin exams; 21–30 patients per day is the most common volume (47% of respondents) and 98% perform procedures.

   CMS PUF by Provider and Service, CY2024 (HCPCS × rendering provider type; CMS provider types "Physician Assistant"/"Nurse Practitioner" are not specialty-tagged, so this is a code-level share, not a practice staffing ratio). Mohs surgeon count: American College of Mohs Surgery. PA volume: SDPA 2024 Practice Survey Report of Dermatology PAs, fielded Feb–Mar 2024 by Western Management Group, n=994, self-selected members.

   NOT THIS IF — You employ no extenders and your physicians are already at full clinical hours. That is a hiring decision, not a mix decision, and no marketing engagement fixes it.

HOW TO TELL THEM APART

How to tell these apart in your own numbers

Each of these is a measurement you can run yourself, without us.

WHAT RESOLVES EACH

What resolves this, and how you will know it resolved

[MED] Service mix, not panel size — the schedule is filling with the cheapest units of work	Rx 04 · marketing attribution →	You cannot fix a mix you cannot see by code. The first deliverable is a per-provider, per-code readout that reconciles to the deposits. What does not work: buying more demand. More AK patients at $6.22 a lesion raises the encounter count and not the number you're watching.
[COS] The category grew by opening doors, not by converting demand — and so did you	Rx 03 · patient conversion →	Mix moves at the front desk before it moves in the room: which complaint gets routed to which provider, which visit gets a surgical block held, how surveillance recalls are queued.
[COS] Ticket, not traffic — the cosmetic line transacts at the bottom of the distribution	Rx 03 · patient conversion →	A 38%-utilized injector does not need a second location. Frank version: if utilization is under 40%, we would decline an acquisition engagement until it isn't.
Site of service is quietly repricing work you already do	Rx 02 · medical practice websites →	Ticket is set before the room — by what the consult page presents, what is packaged, and whether a membership exists at all. The site is where the price frame is built or lost.
[MED] Extender leverage is pointed at the wrong half of the schedule	— →	This is a billing and contracting fix, not a marketing one. We would surface it in the readout and hand it to your revenue-cycle people. Nobody should pay a marketing firm to solve it.

• Rx 04 · marketing attribution — Reporting makes the deployment visible; the decision is yours and it is a staffing decision. We do not pretend otherwise.

HOW THIS DIFFERS BY SCALE

How this differs by scale

Single site	One site, one P&L, and the mix question is answerable in an afternoon from your own claims export. The cosmetic half is usually one injector's calendar. The cheapest fix on this whole page lives here: block-scheduling surgical days instead of interleaving them costs nothing and is often the entire answer.
Group	Provider-level variance becomes the dominant signal and the group average hides it — one physician billing top-decile and one billing tenth-percentile average out to a median that describes nobody. This is also where site-of-service drift begins, usually inherited with an acquired practice.
Platform	Same-site growth is the number the board reads, and Zenoti states the platform trap as data: 8% total revenue growth on 2% same-location. A platform adding doors while same-site is flat is buying growth at the acquisition multiple and reporting it as operations.

OTHER PRESENTATIONS — DERMATOLOGY GROUPS

• Cost per consult is climbing — and cost per encounter was never measured
• The demand is already in the building
• Same brand, same fee schedule, four-fold spread
• How much of this survives the surgeon leaving the room?