Dermatology has now logged pay declines in back-to-back years, and the drop is accelerating.
Dermatologists saw an 11% compensation decrease in Medscape’s 2025 report, the largest single-specialty decline that year. The 2026 report, which surveyed 5,916 physicians between Sept. 5 and Dec. 17, 2025, found dermatology continuing its downward trend.
Seven specialties saw pay decreases in 2026, with dermatology among those reporting a 1% loss, on top of the prior year’s steep decline.
The cumulative erosion is significant. In the 2024 Medscape report, dermatology ranked as the seventh highest-paying specialty at an average of $479,000. By 2025, it had slipped to tenth at roughly $454,000. The specialty that was once among the most reliably compensated in medicine has fallen steadily in the rankings while other fields recovered.
The broader 2026 report told a different story for most physicians. Overall compensation rose roughly 3%, and eight specialties topped $500,000 in average total pay, including orthopedics at $611,000, cardiology at $575,000, and radiology at $571,000. Dermatology’s continued slide stands out against that backdrop.
What’s driving it
The causes are structural, not cyclical. When adjusted for inflation, Medicare physician payments have declined by 33% from 2001 to 2025, a pressure that falls unevenly across specialties depending on their payer mix and procedure volume. Dermatology, with its mix of medical and cosmetic services, has seen the medical side compress while cosmetic demand has increasingly been captured by non-physician providers and med spas operating outside traditional reimbursement structures, according to a 2025 report from Practical Dermatology.
Private equity consolidation, which reshaped the specialty’s practice landscape, has added its own dynamic. Private equity involvement in dermatology exceeds 30%, among the highest of any specialty.
Satisfaction is falling alongside pay
The pay decline is not happening in isolation. Only 55% of dermatologists felt fairly compensated according to Medscape’s 2025 report, down from 62% in 2024 and 65% in 2023.
Dermatologists reported a decline in both the 2025 and 2026 Medscape reports, a distinction shared by only a handful of specialties. The report noted that physician opinions about compensation are shaped by working conditions as much as by the dollar figure itself.
Dermatology remains one of the most attractive sectors for outside investment even as individual dermatologist pay falls. More than 35 private equity-backed platforms now operate nationally, with leading consolidators completing 20 to 40 transactions each in recent years, and platform-ready practices commanding several multiple turns higher than smaller add-ons, according to Focus Bank Investment’s Dermatology Consolidation Report.
Consolidation has been further fueled by cosmetic demand, driving acquisitions of med spas and plastic surgery clinics as groups pursue a broader skin health strategy.
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