Concierge Medicine as an Alternative to the Health Care Status Quo

Patients and providers are increasingly turning to concierge medicine—a direct relationship between a patient and a provider—as an alternative care delivery model.

The concept seems simple: patients spend more time with their physician in exchange for an annual fee or retainer. Physicians, likewise, significantly decrease their patient volume to provide these services.

The trend is already on the rise, with companies like MD-Value in Prevention (MDVIP), which claims a network of 900 other primary care doctors in 43 states, offering patients “personalized medicine, patient-centered medicine, and preventive care.” Some medical schools and hospital networks, such as Johns Hopkins Medicine and Massachusetts General Hospital, currently offer concierge medicine for its patients.

“[C]oncierge medicine is clearly filling a market need, both for patients as well as for physicians,” Kevin Grabenstatter, managing director, Healthcare Services at L.E.K. Consulting in San Francisco, said in an interview with First Report Managed Care.

There are a few care delivery models to consider when designing a concierge practice. Some practice owners choose to charge patients directly, while others bill insurance in addition to charging a monthly, quarterly, or annual fee. The range of services offered relative to the cost of an annual membership can vary.

Prices for concierge care can range from a couple hundred dollars per year to tens of thousands of dollars annually, depending on the practice and care delivery model. While concierge medicine is often associated with high annual fees, there are some companies experimenting with lower cost models. Greenfield Health in Oregon charges its members based on their age, with children paying about $12 per month and 70-year-old members paying approximately $70 per month. One Medical, a concierge practice with offices in eight cities, charges $149 per year for its members. 

Mr Grabenstatter said while the market is still small and the initial reaction to the model was “abrasive,” the opportunity exists for not only physicians but also payers to consider entering the market. “I think there's an opportunity in the market for forward-thinking payers to think proactively about concierge medicine and perhaps become the payer of choice for these practices,” he said.

However, concierge medicine is not without its critics. Some physicians claim concierge medicine creates a two-tiered system where the patient population is limited to only those who can afford a physician’s annual fee. Other concerns are that physicians may choose only healthy patients to fill out their practice, and that primary care physicians who move to a concierge model are contributing to the shortage of primary care physicians in the United States.

Payers are reacting to the concept of concierge medicine in a variety of ways, Mathew J Levy, Esq, partner and co-chair of corporate transaction and healthcare regulatory practice at Weiss Zarett Brofman Sonnenklar & Levy, P.C., explained to First Report Managed Care in an email interview.

“In situations where patients are paying a standard retainer fee to obtain enhanced services not covered by insurance and providers still maintain their status as in network providers, this arrangement would not have a significant impact on payers as they would still be responsible for providing coverage for covered medical services,” Mr Levy said.

“However, in instances where providers have chosen to terminate their relationship with payers, this may result in higher costs to payers where the beneficiaries have out of network benefits,” he added.

Better for Patients and Physicians?

Although the origins of concierge medicine can be traced back to when Howard Maron, MD, and Scott Hall, FACP, founded their practice, MD2, in Seattle, Bellevue, WA and Oregon in 1996, the idea is not all that new, James E Dalen, MD, MPH, executive director of the Weil Foundation, said.

“The concierge model is what medicine was like 40 years ago,” Dr Dalen said in an interview with First Report Managed Care. “You could call your doctor and he'd see you next day if he had to.”

That personalized care and close relationship with a patient is what patients are looking for, experts said. Those in favor of a concierge model said the potential benefits for both patients and physicians are many, which can range from benefits such as 24/7 patient care, convenient contact through telemedicine, access to physicians by phone or email, preventative care and wellness plans, same-day or next-day appointments to physicians and referred specialists, and longer appointment times to more luxury care where patients wait in nicer waiting rooms and can “cut the line” and stay in private accommodations for specialty care and acute episodes.

It is not only convenient care, but timely care, he added. Physicians in concierge models can use their network of contacts to help connect patients with the right specialist for their given situation. “That's a huge, huge advantage—your doctor helps you have access to other specialists,” Dr Dalen said.

Another benefit for physicians is seeing fewer patients may lower the risk of burnout. In the Medscape National Physician Burnout & Depression Report 2018, 42% of physicians reported some level of burnout, with 56% naming bureaucracy and 39% citing too many hours at work as reasons why they felt burnt out.

Recent studies indicate that concierge medicine increases rates of screening and provides cost savings for patients and care environments. A study by Nguyen and colleagues in 2017 showed 90.2% of patients in the Center for Executive Medicine concierge primary practice underwent colorectal cancer screening, compared with 63.3% of patients under local IPA Medicare Advantage plans and 57.5% to 66.5% of patients under National Committee for Quality Assurance national plans.

A 2014 study of MDVIP patients who were Medicare Advantage beneficiaries published in the American Journal of Managed Care by Musich and colleagues showed cost savings of $86.68 per member per month after 1 year and $47.03 per member per month in the second year compared with nonmembers. A different study, published in 2012 in The International Journal of Person Centered Medicine, found greater than 93% of MDVIP patients had good hemoglobin A1c control compared with approximately 64% of national HMO and approximately 55% of PPO reported rates. Similarly, approximately 96% of patients under MDVIP underwent cholesterol screenings compared with 89% of national HMO and approximately 84% of PPO plan patients.

In a 2012 study, published in the American Journal of Managed Care, Klemes and colleagues found that, relative to nonmembers, patients under MDVIP were between 42% and 62% less likely to be hospitalized, with lower rates of “elective, non-elective, emergent, urgent, avoidable, and unavoidable” admissions, they said.

“Some payers may also see a significant cost savings in the event high utilizing patients opt to receive services under arrangements where they pay out of pocket and agree to refrain from billing the plan for the services,” Mr Levy said. “Additionally, some payers have found that concierge physicians report less payouts, fewer hospital admissions, and improved care to prevent chronic conditions, like hypertension, high cholesterol, and diabetes, which are costly to treat.”

Ethical and Legal Considerations

When considering a transition to concierge care from a managed care model, said Mr Levy, ethical and legal considerations include  "whether collecting a retainer violates state and federal public health laws and constitutes the practice of insurance which would subject the provider’s practice to more stringent regulation.” 

For example, practices that want to continue seeing Medicare patients should know Medicare does not allow providers to charge its beneficiaries an additional fee-for-services covered by Medicare, Mr Levy said. In addition, “Practices who choose to not accept Medicare or any third-party insurance need to be sure to follow carefully any and all rules and regulations for opting out of Medicare and/or any other third-party payers,” he added.

If a physician’s provider has any agreements with managed care companies, those agreements should also be reviewed for conflicts or instances of “double billing,” Mr Levy added.

Any practice considering a concierge model should be prepared to enter into an agreement with their patients that specifically outlines what services are being offered in exchange for a fee and how the practice will handle third-party insurance.

“While converting to a concierge practice model may seem like an exciting opportunity for many physicians, it is imperative that all of the risks and benefits be evaluated prior to such transition,” Mr Levy said.