I have used 'Bag Balm' (a medicated animal ointment) on these type of skin conditions with excellent results.
Rub a little into the area everyday keeping it moisturized...and it can cure hard, crusty skin...any type of fly,chigger,mange bites...etc.
It is made for the most tender of skins...the utters on cows.
And this type of elbow problem is quite common in larger breeds of dogs.
I would definately try this before more surgery or meds. It will probably take a few weeks to see good result...but it should help.
'Bag Balm' is available at most Co-op outlets or feed stores. And I hope this helps you and yur pet.
"always willing to answer, cousnel, and help..."