Tuesday, 13 September 2016 04:11

Concierge Medicine: Personalized, Cost-Effective Care

Written by Doug Graham and Karen Petrillo

  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 healthcare to smaller patient bases.

Although once thought to be an insignificant niche in healthcare delivery, more and more consumers are seeking out this model. Ten years ago, there were only a few hundred of these practices in the country, according to an article published in Tennessee Medicine in 2006.. Today, the number of concierge and direct-pay physicians it is estimated at more than 12,000.

As stifling healthcare regulations continue to overwhelm physicians, many feel as though they’ve done everything humanly possible to continue delivering quality healthcare under their current model of care. 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 quality assurance demands from government and private insurers increase, physicians and staff – who are already overextended – are feeling the pressure. Smaller practices with limited resources to meet the requirements healthcare reform are turning to the concierge medicine model as a way out of the modern medicine labyrinth.

The Return of Personalized Care

As trends converge and the landscape of healthcare morphs, savvy physicians are developing models to meet the needs of their patients, deliver care as they see fit for each patient, and create a more palatable lifestyle for themselves. Physicians who set out to design a concierge practice have creative license to design a framework 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 that with physician shortages with the aging population in the U.S. and the writing on the wall becomes quite clear; demand for timely access to quality healthcare will soon be greater 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 a physician, and more personalized attention may drive an increased demand for concierge physicians. Baby boomers (those born during the demographic boom between 1946 and 1964) are projected to have enough disposable income to take advantage of this more tailored delivery of healthcare. Boomers will be the wealthiest group of elderly in history, USA Today has reported, and 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 patients 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 service 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 bloodwork 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, made possible by cutting out third-party payors. Patients participating in a concierge arrangement generally also have a high-deductible medical insurance plan to cover catastrophic events or other medical services that the concierge practice cannot provide.

Hybrid Practices Are an Option

The “hybrid” concierge practice is an alternative that is also becoming more popular. In this model, the physician accepts a limited number of patients from his or her current practice who choose to join the concierge option. Patients who do not want to participate in the concierge model continue to see their physician as they always have. The concierge patients get a direct line of communication with the physician. In these practices, doctors and staff juggle the task of managing two levels of patients, and still retain a large patient base.

This option provides a way for physicians to dip their toe in the water, providing the personalized care and attention that concierge patients desire while not abandoning the patients that otherwise can’t or won’t transition over from traditional practice. One challenge with this model is developing a schedule that will accommodate the needs of the concierge patient, specifically same-day or immediate appointments, and the normally scheduled patients from the traditional practice.

Practicing concierge medicine is not for every physician. Physicians must be willing to be available to patients 24/7. And each physician must do it for the right reasons. Converting to a concierge practice purely to rebel against a healthcare delivery model that is no longer tolerable is probably not the best motive.

How to Get Started

After the decision has been made, converting to a concierge practice requires considerable planning and execution, because there are countless ways a practice can be structured. Even those simply pondering the possibilities of concierge medicine will find the following tips helpful:

  1. Survey your current patients. It is imperative to look carefully at your patient base, get to know the demographics, run statistics on the average number of visits per year, and even break down the numbers based on age ranges. This will help determine a fee schedule that is fair to both you and your overall patient base.
  2. Make a timetable. There are many steps involved in a practice conversion. A timetable will help identify each step and determine and maintain a realistic target conversion date.
  3. Address legal issues. It is paramount that a competent healthcare attorney be identified and retained. Although there are several online resources for attorneys (such as lawyers.com and findlaw.com), it is crucial to ask if the firm has experience structuring a retainer-style medical practice.
  4. Notify third-party payors. In some cases, insurance companies will not contract with physicians that charge a retainer. Others are perfectly fine with reimbursing physicians for covered services, with the understanding that they will not reimburse the patient’s retainer. It is best to identify these issues early in the process.
  5. Determine the pricing model. Will the practice be a classic concierge model, or a hybrid practice that continues to accept and file insurance claims for some patients? The existing patient base will tell a great deal about what type of model should be leveraged and how many pricing options should be offered.
  6. Create marketing materials. The tone and message of the marketing materials will depend somewhat on whether the practice will target the existing patient base or solicit new patients.
  7. Communicate the transition to the existing patient base. Keep in mind that patients may not be familiar with concierge medicine. Carefully explain why the practice is making the transition, what this means to the patient, and what they need to do next. Offer assistance finding a new provider to those who elect not to participate. Most concierge physicians set a limit to the number of patients they will accept, and retain patients on a first-come, first-serve basis.
  8. Schedule follow-up meetings. Some patients may require a detailed explanation. A great way to deliver this is to invite patients to a presentation about the transition at the practice or another convenient location. Offer individual meetings, as required.
  9. Hire a consultant. Running a practice while converting to another model can be arduous. A consultant can guide you through many of the steps involved and can pay attention to important details that may otherwise be overlooked.

The impact of healthcare reform on the aging baby boomer population remains to be seen. The growing number of concierge practices is testimony, however, that such medicine will continue to find a place in the U.S. healthcare market.

About the Authors

Doug Graham is a senior management consultant with DoctorsManagement, LLC, and specializes in concierge medicine conversions.

Karen Petrillo is the director of marketing with DoctorsManagement, LLC.

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Last modified on Tuesday, 13 September 2016 04:20