Concierge Medicine: Personalized, Cost-Effective Care
Note: This is the first half of a two-part series on concierge medicine by experts at DoctorsManagement who have helped many practices incorporate this model into their businesses.
Concierge medicine, also known as boutique or private medicine has grown beyond just a trend. Paid entirely by patients rather than health insurance companies, “concierge” physicians offer more personalized health care to reduced patient bases.
Although once thought to be an insignificant niche in health care delivery, more and more consumers are seeking out this health care model. Ten years ago, there were only a few hundred of these practices in the country, according to an article entitled “Concierge Medicine … Another Option for Frustrated Doctors” (Tennessee Medicine, November 2006, Vol. 99, No. 11). Today, the number of concierge and direct pay physicians is estimated at more than 12,000.
As stifling health care regulations continue to overwhelm physicians, many feel as though they’ve done everything humanly possible to continue delivering quality healthcare under today’s healthcare model. To compensate, physicians and their staff must either spend less time with each patient or devote more of their day to patient visits—by coming in earlier, staying later, or shortening their lunch breaks. Despite the extra effort, practice revenues are stagnant, at best. As reimbursements shrink and the quality assurance demands from government and private insurers increase, physicians and staff—who are already over-extended—are feeling the pressure. Smaller practices with limited resources to meet the requirements of health care reform are turning to the concierge medicine model as a way out of the modern medicine labyrinth.
The return of personalized care
As the trends converge and the landscape of health care morphs, savvy physicians are developing models to meet the needs of their patients, deliver health care as they see fit for the patient, and create a more palatable lifestyle for themselves. Physicians who set out to design a concierge practice have creative license to design a practice that best suits their professional and personal goals and take into account the needs of their patient base and market demographics.
The imbalance between supply and demand also helps make the case for concierge medicine. A 2016 study conducted for the AAMC by IHS Inc., predicts that the United States will face a shortage of between 61,700-94,700 physicians by the year 2025. Combine physician shortages with the aging population in the U.S. and the writing on the wall becomes quite clear; timely access to quality health care will soon be more elusive than ever.
As this reality filters to the consumer through the media and personal experience, patients interested in the peace of mind that comes with flexible scheduling, immediate access to their physician, and more personalized attention may drive an increased demand for concierge physicians. Baby boomers (those born during the demographic birth boom between 1946 and 1964) are projected to have enough disposable income to take advantage of this more tailored delivery of health care. Boomers will be the wealthiest group of elderly in history, USA Today reports. Although they make up only 20 percent of the population, baby boomers will control 40 percent of the nation’s disposable income.
How concierge medicine works
In the classic concierge medical practice, a physician accepts a monthly or annual fee in exchange for granting the patient special access. Services may include priority appointments (same day, in some cases), 24/7 access via email and cell phone, house calls, ample time with the physician during visits, and escort to hospital emergency room visits. Depending on the services they deliver, concierge physicians charge up to $10,000 a year, with most charging $1,500 to $2,000, according to The New York Times.
Some high-end concierge practices are all inclusive, while others charge a modest annual fee with additional fees required for services and tests as they are rendered. It is common for a concierge physician to set a price schedule that offers several tiered options. For example, one option might include ample visits per year, along with various tests and maybe even a couple of visits for out-of-town guests (should the need arise). A different option, with a lower annual fee, might offer two visits per year, one round of standard blood work with additional visits, and tests available at pricing spelled out in the patient contract. The variations are endless, and it is up to the physician to decide the structure based on the needs of the patient base and vision for the concierge practice. A very clear and concise contractual relationship is vital.
In the classic model, the physician does not accept any form of health insurance. In addition to the physician having the freedom to deliver the level of care he or she sees fit, the primary advantage of a classic concierge practice is reduced administrative costs by cutting out third-party payers. Patients participating in a concierge arrangement generally have a high deductible medical insurance plan to cover catastrophic events or other medical services that the concierge practice cannot provide.
Next issue: We will conclude this two-part series in the next issue of The Business of Medicine. We will discuss a hybrid model where a practice offers both concierge care and regular care with insurance carriers, and outline detailed steps for determining whether concierge care makes sense for you, and how to implement it.
— Doug Graham (firstname.lastname@example.org) is a Senior Management Consultant with DoctorsManagement and specializes in concierge medicine conversions. Karen Petrillo (email@example.com) is Director of Marketing at DoctorsManagement.