Redesigning Inpatient Dermatology to Address Costs, Improve Access

The clinical and financial implications of inpatient dermatology were examined, highlighting the need for systemic changes to improve care, reduce costs, and address health equity for patients with skin diseases. | Image Credit: Seventyfour - stock.adobe.com

Institutional and systemic changes to inpatient dermatologic care could reduce health spending, improve patient outcomes, and may improve health equity, according to a study published in the Archives of Dermatological Research.1

Skin diseases affect millions of Americans annually and are among the most common US health issues, the study authors noted. Dermatologic consultation has potential to diagnose and treat over 60% of these patients, improving outcomes. Inpatient skin care costs over $5 billion yearly, making up about 0.5% of total inpatient health care spending.

Hospitalizations for skin diseases average $7949, the authors explained, but the cost nearly doubles to $15,967 when patients have comorbidities, which also lengthen stays (7.3 vs 4.6 days). This review examines inpatient dermatology's clinical and financial implications by synthesizing literature on its utilization, trends, and impact, noting how changing reimbursement and the shift to hospitalist care have altered its model.

Economic Impact of Dermatologic Conditions

Dermatologic hospitalizations strain the health care system, and better care continuity between hospitalists and dermatologists could help mitigate this strain. Annual per-person health care costs for patients with atopic dermatitis reach $10,474 per person per year (PPPY), mainly due to outpatient and pharmacy expenses, one study found.2 For example, atopic dermatitis medication costs $1168 PPPY, with topical therapies at $254 and systemic therapies at $914.

A 2014 study found skin disease hospitalizations cost $5.04 billion, led by bacterial infections ($7024 per admission), ulcers ($12,984 per admission), and connective tissue disorders ($15,577 per admission).1 A 2012 pediatric study found costs of $379.8 million that year, with cutaneous lymphomas ($58,294), congenital skin abnormalities ($24,186), and ulcers ($17,064) driving costs. These figures highlight the need for better outpatient dermatologic care access and a restructured consultative model for comprehensive inpatient dermatologic care.

Patients with severe skin disease may benefit from an expanded care team, including primary inpatient dermatologists and palliative care specialists. The researchers estimated a 0.47% mortality rate for primarily dermatologic hospitalizations.

High costs and readmission rates suggest implementing primary admitting inpatient dermatologists, rather than consulting dermatologists, would improve treatment and outcomes.

Expanding Inpatient Dermatology Services

In 2017, dermatologists consulted in only 4.6% of Medicare skin-related hospitalizations (8867 annual consultations), saving Medicare $19 million to $38.3 million, the study authors noted. Based on these findings, a 10% consultation rate could save $41.3 million to $83.3 million.

“To increase this rate to 10%, we would need to conduct an additional 10,402 consultations annually, bringing the total to about 19,269,” the authors wrote. "To reach 20%, an additional 29,671 consultations would be necessary, totaling 38,538 per year. In terms of staffing, we estimate that one dermatologist can handle about 500 inpatient consultations annually (2-3 consults per workday excluding weekends, holidays, and vacation days). To meet the 10% target, this would require 21 additional dermatologists. To reach 20%, about 60 more dermatologists would be needed.”

While expanding inpatient consultations may reduce outpatient availability, involving residents and fellows can distribute the workload and maintain both inpatient and outpatient services, the authors noted. Inpatient dermatology exposure may also increase resident interest in the subspecialty, addressing the physician shortage.

Improved financial incentives could encourage more dermatologists to provide this care. Professional organizations can conduct additional advocacy efforts, and lobbying for Medicare and Medicaid reimbursement changes can pave the way for higher payments. Additionally, inpatient dermatology addresses the median 2-day lag time between hospitalization and consultation associated with the consultative model.

“Expanding upon such data-driven research demonstrating the value of inpatient dermatology, can further bolster advocacy efforts for reimbursement,” study authors stated.

Optimizing Teledermatology Services

Inpatient teledermatology can expand dermatologists' reach and consultation availability without bedside presence. Studies confirm its diagnostic accuracy and improved patient outcomes, the authors explained. Teledermatology has also proven effective in emergency departments and underserved areas with limited dermatologist access. Since most dermatology clinics are off-site, teledermatology eliminates travel delays and enables timely interventions.

However, barriers to widespread implementation remain, including nonstandardized reimbursement, limited televisit reimbursement (exacerbated by Medicare reductions), and increased costs. Teledermatology can drastically reduce time to diagnosis from 137.5 days with usual care to just 50 days, enabling earlier interventions and potentially improving prognoses.

Pre-pandemic teledermatology use was limited, but post-pandemic adoption rose to 77.8%. Wider teledermatology adoption could increase inpatient dermatologist presence, especially in shortage regions.

The study authors emphasized the need to address reimbursement limitations and standardize protocols to maximize teledermatology's potential, particularly given Medicare's reduced televisit coverage.

Dermatology Reimbursement Impacts

Dermatology reimbursement models favor high-margin fields like Mohs surgery, cosmetics, and dermatopathology due to their specialized and rewarding procedures, the authors noted. Inpatient dermatologic care, particularly consultations, offers lower financial incentives. Dermatologists also acknowledge that reimbursement rates have not kept pace with inflation.

Recommendations and Strategies to Improve Inpatient Dermatology

Systemic changes in government and healthcare protocols must implement dermatologists as primary admitting teams and standardize telehealth in low-resource areas, the authors wrote. Increased financial compensation would also incentivize dermatologists to treat hospitalized patients.

Inpatient dermatology curricula should integrate direct patient care learning such as bedside rounds and non–patient care activities such as case presentations. These strategies promote resident interest and education in inpatient care through clear communication, core question preparation, and management step confirmation. Inpatient teledermatology integration into residency training may also benefit institutions with limited in-person capacity and no primary dermatology admitting service.

Underlying issues include the current dermatologist deficit for basic services, let alone inpatient consultations, the authors noted. Discussions should address increasing reimbursement for community dermatologists providing inpatient services.

“These institutional and systemic changes are crucial as congruent inpatient dermatologic care will not only reduce health spending and improve patient outcomes, it may also service to improve overall health equity,” the authors concluded.

References

1. Burke O, Hartoyo M, Lin R, Kirsner RS, Elman SA. The financial impact and utilization of inpatient dermatology services: historical insights and future implications. Arch Dermatol Res. 2025;317(1):374. Published 2025 Feb 8. doi:10.1007/s00403-025-03867-y
2. Wang X, Boytsov NN, Gorritz M, Malatestinic WN, Goldblum OM, Wade RL. US health care utilization and costs in adult patients with atopic dermatitis by disease severity. J Manag Care Spec Pharm. 2022;28(1):69-77. doi:10.18553/jmcp.2022.28.1.69