Kurt Mosley was speaking to a group of physicians when the subject of concierge medicine came up. He asked one of the doctors what they charge their patients for this type of guaranteed care.
The doctor told him $157.50 a month.
Mosley thought that was kind of arbitrary. Why the extra 50 cents?
“How did you arrive at that number?” Mosley asked.
“Well, that’s how much you would spend on a pack of cigarettes a day. I figure if they can afford a pack a day, they can afford me for unlimited access,” the doctor replied.
Mosley is a senior vice president at Merritt Hawkins, a physician search, consulting, and research firm. Concierge medicine is one of the topics the firm has intensively studied.
Long thought of as a perk for the rich, concierge medicine has in recent years become more appealing for patients across income brackets.
More important, perhaps, is that concierge medicine is becoming more attractive to physicians.
What Exactly Is Concierge Medicine?
Concierge medicine is a private form of practice where doctors charge patients an out-of-pocket retainer fee for full access to their services.
Patient loads typically decrease when a physician switches from more traditional fee-per-service practice to concierge medicine. While there are a small number of physicians practicing concierge medicine today — about 5,000 according to the American Academy of Private Physicians — that number has grown in recent years.
In addition, a survey of more than 20,000 physicians by Merritt Hawkins on behalf of The Physicians Foundation found that more than 20 percent of physicians today say they’re either currently practicing concierge medicine or plan to do so in the future.
“The main attraction is really one of control. A lot of physicians today feel somewhat powerless in their practice. They’ve gone through years of school, they feel like their fees are controlled by third parties,” said Phil Miller, a spokesman for Merritt Hawkins. “They feel they are being judged on things that are subjective, and may not feel fair.”
Younger physicians seem more inclined to transition. Approximately 17 percent of physicians under the age of 45 indicated in the survey that they would switch to a direct pay/concierge practice.
“I think that has to do with the openness to change that younger people have. Older doctors might find it too late in the game to change their structure,” Miller said. “Their inclination is to rather opt out in medicine than go through a complete overhaul.”
Fewer Patients Is a Plus
One of the main upsides to concierge practice is the decrease in patients, coupled with an increase in pay.
A concierge doctor may have 500 patients, while a doctor in a traditional practice may have 2,000. The doctor with the 500 patients is on retainer and has predictable revenue. The physician also spends more time with the patient and gets to know them. The doctor with thousands of patients may be hard-pressed to form that same type of relationship and is paid only when a patient comes in.
“It makes financial sense for a lot of doctors, and I do think it will continue to proliferate. It’s a model that fits the needs of more doctors and more patients, and they are finding ways to structure it so that it makes more financial sense,” Miller said. “The perspective that it’s just for the rich will eventually evolve.”
Average retainers vary from practice to practice, but at one of the largest concierge networks, membership fees range from about $1,650 to $1,800 a year. Insurance through the Affordable Care Act (ACA) costs an average of $307 a month (or about $3,600 a year) for a 50-year-old nonsmoker, according to data analyzed by Avalere Health, and reported by Bloomberg.
Obamacare plans and other insurance policies cover things concierge medicine memberships won’t pay for, but the upfront difference in cost is attractive to a growing number of consumers.
One reason is that healthcare spending increased 3.6 percent to $2.9 trillion, or $9,255 per person, in the United States in 2013. It was the fifth consecutive year that healthcare costs increased between 3.5 and 4.1 percent, according to the Centers for Medicare & Medicaid Services.
Concierge Appeal Is Spreading
Florida-based MDVIP was founded in 2000 and has grown to a national network of more than 800 physicians.
It’s a network where the doctors do everything from teaching healthy eating courses to grocery shopping with patients. Doctors also go on walks with their patients and work with them extensively on things like hypertension and diabetes wellness plans.
It’s also a network where the CEO touts the importance of the physicians’ own happiness and leads by example. The CEO can be found at the beach catching waves whenever he can.
Physicians in traditional practices can have between 2,500 and 4,000 patients. MDVIP physicians are capped at 600.
An annual membership in MDVIP ranges from $137 to $150 a month.
The MDVIP model offers some of concierge medicine’s positives. The minimum appointment time is 30 minutes, compared to the average seven to eight minutes at a traditional practice. It also guarantees same or next-day appointments.
Bret Jorgensen, the surfing chairman and CEO of MDVIP, sees an alignment between concierge medicine and the ACA’s message of prevention and engagement.
“That is exactly what MDVIP does. We’re trying to be an option for people to get further ahead on their health,” he said.
He said MDVIP sees results. They have a 90 percent renewal rate and a 90 percent reduction in hospital readmission. He adds that patients benefit from the access to the doctors, including the fact they can text and email their physicians.
“Doctors feel a lot of pressure from the current requirements. I don’t say this as a negative — the doctors are terrific — but they are on a treadmill,” Jorgensen said.
In recent years, there has been an uptick in awareness of concierge medicine, especially among doctors.
“The market is more and more aware. There is more awareness of this than there was two years ago, five years ago,” Jorgensen said.
“More patients will embrace it as it becomes better known and as they hear from their doctors who are moving,” Miller said.
Getting Away from ‘Sick Care’
Jorgensen said one of the reasons concierge patients like the system is because it’s not “sick care.” A concierge doctor typically has more time to work on preventative care than a traditional physician.
“Everything in our system today — and this has changed a bit which is one of the positive developments of the ACA — historically has been about sick care,” Jorgensen said. “The driving event is that the patient feels sick and goes to the doctor. The goals of the ACA are very compatible with what we do.”
Instead, networks like MDVIP and others have reemphasized preventative care.
“If you keep the patients out of the hospital or the ER, it saves the patients a lot of money,” Jorgensen said.
“The people that buy into this model are really trying to buy into a personalized engagement model focused on prevention,” he added. “The fundamental model is reducing the size of the practice to a smaller patient population, and I will tell you that it works.”