"Should You Dump Your PCP" -- Concierge Practice

[facetguy]

From Forbes mag:
http://www.forbes.com/forbeslife/he...rr_0114health.html?feed=rss_forbeslife_health

Are these practices frowned upon in the Family Medicine community? Or would everyone do it if they could? And what are the barriers to opening such a practice (i.e., why doesn't everyone do it)?

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[J-Rad]

http://forums.studentdoctor.net/showthread.php?t=590143

This one was about a half page down from yours.

 

[lowbudget]

Frown upon? Well, I think the only docs who have the right to frown are those who actually take care of the indigent and accept Medicaid. Everyone else can STFU.

My thing with concierge is assumption of risk. With health insurance, patients pay a monthly premium just in case something happens so that they can get medical care. Along with that premium, certain services are covered up.

When a patient pays a fixed fee and the doctor promises to provide a set of services for that fixed fee, the doctor (in my mind) becomes the insurance company. If you were smart, you would cherry pick your patients (i.e. those who are low-utilizers). The best way is if you already knew your patients and knew they would be good patients (inside information). But basically, the doctor assumes the actuarial risk of these patients. The advantage is that they know these patients personally. The disadvantage is that doctors are not actuaries and are unskilled in calculating probabilities of medical utilization. So if you don't pick the right patient, they can bury you.

2 concepts in insurance: selection bias and moral hazard. People who use insurance, buy it. And those who don't, don't. Or, look at it the other way. Why pay for a concierge if you won't use it? And, if you had chronic problems and need a doctor all the time, wouldn't you pay for this service? That's selection bias. So one would reason, at least theoretically, that it's only those who are high-utilizers will purchase concierge services and low-utilizers will pass.

At least with employer-sponsored insurance, there's community rating, and thus, risk pooling. So insurance companies can take low-utilizers to subsidize high-utilizers. Concierge doctors don't have this capability to diversify away this risk, because by design, they attract high-utilizers (selection bias).

And people who buy insurance start changing their behavior because they know the insurance is there. Because they know their concierge doctor is there. That's moral hazard. Insurance companies have the ability to charge copays and coinsurance where the patient shares the cost, which makes them think twice before going to the doctor. With concierge, patients pay a flat fee and there's no cost share (or financial "disincentive") for over-utilization. So there's no way of shifting the cost of moral hazard back to the patient.

So my issue with concierge is that doctors start to underwrite the risk of the group of patients they take care of.

The other issue is as old people get sick, they have less and less disposable income. Some old people have to sell their house so they can qualify for Medicaid so that they can start to cover some elderly care that Medicare does not. So as disposable income declines, so does the ability to afford concierge services. I would find it really hard personally to cut off a patient who needs my help in a time they need my help the most.

I haven't read if anyone has thought of it that way... it's just the way I see it.

 

[AFSmiley]

I really don't like the term "Concierge" because I feel like a lot of physicians connect this with toting from mansion to mansion to take care of ultra-rich sniffles. I've been fortunate to connect with a lot of physicians via SIMPD, and these people really know what they're doing!

These practices are sprouting up all over the country and with the right model, they can provide access to middle income people, often employed in small businesses, at very reasonable rates.

Personally, my current dream is to open up a SimpleCare or PATMOS style clinic in the Great State of Texas! And judging by this article, I shouldn't have a problem finding a patient base.

Additionally, I've always felt like the a lot of the problems with our healthcare industry are tied to the way the insurance industry functions. Every other insurance industry I can come up with is there to deal with crises. These are crude analogies, and I don't expect them to work in every situation, but I think the basic point is valid:

• How often does Homeowner's Insurance pay for a broken toilet?

• Anybody expect to pay a $25 copay when they go for 60,000 mile maintenance?

• Additionally, with auto/home, consumers CHOOSE which Insurance company to go with, the lowest bidder isn't force-fed through their employer.

There will be winners and losers with any system, but I think if our nation's healthcare goes back to a system where routine care is paid for directly, and insurance generally covers catastrophic illness/injury, a lot of our problems could be solved without all of us being forced into a nationalized system.

 

[deleted87716]

I think if our nation's healthcare goes back to a system where routine care is paid for directly, and insurance generally covers catastrophic illness/injury, a lot of our problems could be solved without all of us being forced into a nationalized system.

Yep. I've been saying that for years.

Concierge fills a niche, and that's all it will ever do. It's not the answer to the bigger problems, and it's not how most doctors want to practice or how most patients want to receive care.

 

[Doctor Grim]

I think doctors are interested in "concierge" medicine for financial reasons, and there is nothing wrong with it.

It will be difficult for one to start such a practice early in his or her career because you'd need time to find a niche, potential buyers, and build up your reputation.

Your ideal "clients" are those who are at the top of the income pyrimad and you must be able to differentiate yourself from the next doctor in terms of service. Those with money are willing to pay $200-300/mo. just so they can call you their own personal doctor i.e. someone has their own lawyer where they can get a hold of him/her at anytime. They'd still have their own insurance through employement..etc and would use it for something catastrophic. They're paying you so that they can have access to your personal care at ANYTIME, 24-7.

Once your patients are eligible for Medicare, then they're no longer your patients. You have to let them know this up front.

If all stars align and with some luck, you shouldn't have a problem making $50K-60K per month CASH.

 

[Boner]

Yep. I've been saying that for years.

Concierge fills a niche, and that's all it will ever do. It's not the answer to the bigger problems, and it's not how most doctors want to practice or how most patients want to receive care.

Just curious why you think concierge medicine isn't somewhat a step in the right direction? Also, why don't you think most PCPs want to practice using the concierge model? - Just curious, as I respect your opinion on most matters.
I think a lot of newer concierge practices encourage patients to have catastrophe insurance or an HSA. Either way, patients are fee-for-service/retainer/combo and pay for routine care out of pocket, all while being covered with catastrophe insurance/HSA.
Personally, I don't think this is a niche, rather, a sort of unofficial pilot program of a true patient-centered medical home using FFS+catastrophe insurance. Even if the cost breaks even with traditional insurance, seems like the smaller patient panel/additional time for each patient improves both patient and physician satisfaction. Improved satisfaction/compensation may attract more students into primary care, as well. Would be nice, though, to have some data on quality improvement, etc... in regards to these models.

 

[deleted87716]

Just curious why you think concierge medicine isn't somewhat a step in the right direction?

Because the numbers are wrong.

Currently, a physician seeing 25 patients per day has a panel of around 1,800 or so patients. The average "concierge" physician has a panel of 600 patients. In an environment where we already have far too few primary care physicians to care for our aging population, reducing panel size is not the answer.

 

[facetguy]

Because the numbers are wrong.

Currently, a physician seeing 25 patients per day has a panel of around 1,800 or so patients. The average "concierge" physician has a panel of 600 patients. In an environment where we already have far too few primary care physicians to care for our aging population, reducing panel size is not the answer.

It's probably fair to say that income potential is a big reason why students don't wish to enter family practice. If concierge practices improve income potential, and probably lifestyle as well, then it follows that more students would take an interest in this model of family practice, which should help the numbers.

 

[Boner]

Because the numbers are wrong.

Currently, a physician seeing 25 patients per day has a panel of around 1,800 or so patients. The average "concierge" physician has a panel of 600 patients. In an environment where we already have far too few primary care physicians to care for our aging population, reducing panel size is not the answer.

Very true. However, could the increase in physician satisfaction/compensation potentially draw more students into FM/outpt IM? I know the numbers wouldn't balance out, but if we at least broke even in terms of patients with primary care, isn't that kind of a step in the right direction? We'd still have the same number of patients being cared for, but now they're being cared for under a system that is vastly better. Do you at least think that the concierge model is ideal in terms of physician and patient satisfaction? Do you think there is a potential increase in quality of primary care under this model?
Personally, I think if the quality of care is there, along with increased physician/patient satisfaction and increased PCP compensation, more PCPs are going to move this way...veeery slowly.

 

[deleted87716]

could the increase in physician satisfaction/compensation potentially draw more students into FM/outpt IM?

It's not working so far.

As for the quality issue, I've never read anything that suggests that concierge practice provides superior outcomes. Patients may be happier with their access and the length of their appointments, but that doesn't mean that they're objectively any better off than they would've been in a traditional practice.

Likewise, doctors may be happier seeing fewer patients and not dealing with insurance hassles, but I think it's a bit disingenuous to suggest that doctors working within our present system aren't able to provide high-quality care.

 

[piggie]

capitalism, baby
concierge medicine is a great idea

 

[deleted87716]

capitalism, baby
concierge medicine is a great idea

So were sub-prime mortgages.

 

[Good Solutions]

Because the numbers are wrong.

Currently, a physician seeing 25 patients per day has a panel of around 1,800 or so patients. The average "concierge" physician has a panel of 600 patients. In an environment where we already have far too few primary care physicians to care for our aging population, reducing panel size is not the answer.

There are already too few physicians. The limiting factor is residency slots. Even in the socialist republic of massachusetts there aren't enough doctors to fill the demand. Even if we assumed that every PA and NP could even handle practicing comphrensive care, there still aren't enough of them to handle our nation's demand. This will never change. Arguing such is a moot point.

Primary care needs students to want to go into it, be paid well, and restore the patient/physician relationship. Direct practices do that. They are the answer. Not preserving the ancient pact of physician/patient trust will be the last nail in the coffin for physician professionalism.

Re: to earlier comments...
A dr. not enrolled in medicare may still accept medicare patients at their stated fee schedule. If they are enrolled as a medicare provider they may only bill for what medicare will pay. Solution: Don't enroll in medicare.

These practices are not insurance. A physician is selling time, not guaranteed outcomes. We like challenges. That is the nature of our education, I won't turn down a difficult patient because they might utilize more of my time. Every state insurance commisioner who has tried to label these as insurance has lost - because they're not. They may stipulate the annual fees be placed in escrow, though (or simply charge monthly fees).

 

[MedicineDoc]

Concierge only works for the tail end of physician careers. What happens is most of the patients drop out when you stop accepting insurance. The very loyal ones stay mabe 20 percent. The practice numbers slowly decline after that from what I've heard.

 

[Good Solutions]

Here is a graph of one doctor's story.
http://www.danielfrankmd.com/Statistics.html

It can be done for fresh graduates. It simply takes time. And doing it initially saves the hassel of allienating 1500+ people. Yes, it involves risk, as the best things in life usually do.

 

[MedicineDoc]

Hopefully the new administration is going to level out the pay between specialist and primary care at least to a significant degree from all the press it is getting with almost no US grads going into primary care and the huge shortage.

 

[Good Solutions]

Hopefully the new administration is going to level out the pay between specialist and primary care at least to a significant degree from all the press it is getting with almost no US grads going into primary care and the huge shortage.

Why? Why should we be placing faith in the government to solve such problems? Why should we be advocating robinhood policies? Comprehensive physicians don't need government support. It is the problem and it is the reason for the current situation. Simply say no. Stop taking medicare stop taking insurance and take back our profession. Good for the specialists. I'm glad they are doing well. Don't forget we are all in this together in weakening some any of us weakens us all. A well paid physician has more green votes with which to defend medicine and advocate for the quality our patients deserve. Knocking them down only weakens all physicians.

 

[MedicineDoc]

<p>I disagree. I believe some specialists are overpaid. I don't think an MRI should cost so much as to be prohibitly expensive or patients should be asked to pay sky high deductables. As you will recall the speacialist dominated AMA is largely responsible for the state of primary care today. Additionally, I disagree with the performance of so many money driven procedures some causing more harm than good and draining our health care dollars as someone who loves my country and wants the best for it's people.

 

[SouthernSurgeon]

The other big issues with these concierge practices is that they are still few and far between.

If a bunch more physicians start switching to this model, how long before they run out of paying customers - I think the number of people willing to pay for this type of practice is small. The market will saturate quickly, which is why I think this is nothing more than a niche, not an effective future option.

 

[piggie]

you are correct it is a niche practice

 

[AFSmiley]

Located here, in the January 21 issue. I disagree with a lot of it, but I don't have time to write up all my thoughts now. Enjoy!

 

[Good Solutions]

you are correct it is a niche practice

I posted something similar to this in another thread and it applies here, too.

You are right. Concierge medicine will not be the solution to all our healthcare issues. But direct access, via abdication of the yolk of insurance, is the solution to the foundation of our health system. Primary care, or best known as comprehensive care will survive only as direct access.

Here is the scale of direct access practices:

<Concierge...Retainer...Fee for service (i.e. price transparency)...Barter>

These practices are not all $20,000.00 a year buy ins but a gradient on this scale. Once again, all have the common theme of no insurance. Can you see where people of different financial capabilities fit in? I can. This is why direct access is the solution to the comprehensive care problem.

Here are some real life examples of Retainer practices
http://www.warshawmd.com/MembershipInfo.html $1500
http://www.privatemedicaldoc.com/fees.htm $1850

Retainer & Fee for service hybrid: http://www.poncepreventive.com/fees.html

Fee for service (i.e. price transparency, quasi urgent care). http://www.patmosemergiclinic.com./index.html
http://www.simplecare.com/about.html
http://www.aafp.org/fpm/20070600/19brea.html

And here is an excellent blog post on how universal healthcare may lead us back into the world of bartering.
http://covertrationingblog.com/new-...gies-for-the-battle-over-universal-healthcare

 

[DrJosephKim]

It may become more popular if the new administration unfolds a true universal health coverage plan.

 

[cpants]

Here is a graph of one doctor's story.
http://www.danielfrankmd.com/Statistics.html

It can be done for fresh graduates. It simply takes time. And doing it initially saves the hassel of allienating 1500+ people. Yes, it involves risk, as the best things in life usually do.

This seems like an excellent practice model. Patients pay 135 a month and all they get for it is improved access to the physician and less headaches getting an appointment. The doctor assumes very little risk, because all services he renders are still paid for by private insurance or medicare. In other words, patients are guaranteed essentially nothing in terms of service for their fee, which they are still happy to pay because it is such a hassle dealing with the current system. With 400 patients, the doctor pockets 50k in cash every month, plus payment for whatever services he renders. On top of that, with only 400 patients, he probably enjoys a ton of free time. He could see every single patient every month and still spend less time in the clinic than your average PCP.

 

[heech]

I'm not sure I understand the numbers here, and why $100/month seems to have been picked as a baseline number for a practice. If we assume the average practice gets around 500 patients, $100/month translates into $600k a year... even after malpractice insurance and whatever other fixed costs (record-keeping + office assistant), that's an EXTREMELY healthy and probably unsupportable amount of income for the average FM.

So even if the market becomes saturated... if we drop the price down to $40/month, with 500 patients that's till $200k a year gross, and probably $150k/year net... and with a much better lifestyle to boot.

It seems obvious to me that demand for this service is very elastic: drop down the cost enough, and there are many people that'd be interested.

To be honest though, I personally would be interested even at $100/month. My family's health insurance premiums are currently about $12k a year, paid by my employer. I also have two young kids at home, and it's inevitable that I stay up at least a few nights a year freaked out about their health... some nasty flu bug, or (imagined?) allergic reaction to peanuts/medicine... typical young parent stuff.

If I had the option, I absolutely would pay another $1k-$2k a year (or at least push my employer to offer it) for 24 hour, personalized coverage.

 

[Good Solutions]

I'm not sure I understand the numbers here, and why $100/month seems to have been picked as a baseline number for a practice. If we assume the average practice gets around 500 patients, $100/month translates into $600k a year... even after malpractice insurance and whatever other fixed costs (record-keeping + office assistant), that's an EXTREMELY healthy and probably unsupportable amount of income for the average FM.

So even if the market becomes saturated... if we drop the price down to $40/month, with 500 patients that's till $200k a year gross, and probably $150k/year net... and with a much better lifestyle to boot.

It seems obvious to me that demand for this service is very elastic: drop down the cost enough, and there are many people that'd be interested.

To be honest though, I personally would be interested even at $100/month. My family's health insurance premiums are currently about $12k a year, paid by my employer. I also have two young kids at home, and it's inevitable that I stay up at least a few nights a year freaked out about their health... some nasty flu bug, or (imagined?) allergic reaction to peanuts/medicine... typical young parent stuff.

If I had the option, I absolutely would pay another $1k-$2k a year (or at least push my employer to offer it) for 24 hour, personalized coverage.

Exactly. Because this is quality that no government PQRI initiative or mandated health metrics will ever be able to substitute for. The $2000 figure pops up because that is the value that even the most indigent can afford. Something often cited is how much does a pack of cigarettes cost for a pack a day habit? $5 X 365 = $1825 How many poor, lower class individuals on government assistance still find the money for smoking? Comprehensive care is affordable in this country and there is no excuse for the prevailing attitude of not wanting to penny up for any medical care. We painted ourselves into this mess and we still have the ability to liberate ourselves from it before our patients (and us) are backed into the disheartening conditions that only universal care can offer.

 

[deleted87716]

Exactly. Because this is quality that no government PQRI initiative or mandated health metrics will ever be able to substitute for.

Concierge membership fees don't buy quality, they buy access. If quality derives from that, it has yet to be proven objectively.

The $2000 figure pops up because that is the value that even the most indigent can afford.

How many poor, lower class individuals on government assistance still find the money for smoking?

Those aren't the people who will be willing to pay out of pocket for a concierge doc, either, let me assure you.

There's a strong entitlement mentality in this country where healthcare is concerned, and for that reason, concierge medicine will continue to appeal only to a minority of patients.

 

[heech]

Concierge membership fees don't buy quality, they buy access. If quality derives from that, it has yet to be proven objectively.

My opinion is that consumers can't effectively distinguish "quality", and 364 days out of the year health care providers are a fungible commodity. My mother still doesn't really understand the difference between a MD, DO, PA, and a NP... she consistently picks the friendliest, easiest to access provider who can solve her basic needs.

But I agree with you as far as the sense of entitlement. I think for concierge medicine to take off, selling it to the patient will always be difficult. We understand paying $50 a month for HBO and warranty on my new iPhone, but the concept of paying something for health care is just foreign.

I personally would approach the problem by selling it through insurance brokers, and targeting employers.

1) If/when insurance brokers come across a client looking at a HSA or high-deductible plan, if/when they come across first-time parents or senior citizens... these are prime targets for concierge medicine. Pay the insurance broker a commission fee for each client they send your way.

2) Talk to employers about how concierge medicine might be a very attractive perk for white-collar workers. The extra cost for an employer is minimal compared to what they're already paying, and they can instead pitch it to their employees as a lifestyle thing. (Annual physicals in the office; personal doctor on-call for you and your family 24/7.)