Considering Concierge



Physicians Look at Concierge, Other Alternative Practice Setups for More Personal Patient Care

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Practice Management Feature — June 2016

Tex Med. 2016;112(6):43-48.

By Joey Berlin
Reporter

Family physician and internist Manoj Bhardwaj, MD, says he and his brother, Rishi Bhardwaj, MD, want to make greater connections with their patients than they do in their current roles as internal medicine hospitalists at Houston Methodist Hospital.

The siblings plan to open a new primary care practice in the Houston-Bellaire area later this year that will have that goal in mind. When they do, Dr. Manoj Bhardwaj says they'll likely employ a membership model that's no longer new but is garnering more attention from physicians. The Bhardwaj brothers are strongly considering a concierge practice model, in part, because, as Dr. Manoj Bhardwaj puts it, "At the end of the day, we're dealing with not just physical, but emotional and psychosocial well-being."

"We're more of the mindset of mind, body, and soul, and so we love to connect with people at those deeper levels. That requires time," he said. "You can't do that in those typical practices where it's like a mill, or you're running at a bare minimum 15 patients or 20 patients a day just to keep your practice afloat."

In a concierge model, the patient pays an annual membership fee or retainer for services that won't be covered by insurance, leading to lower patient volumes and less time-constrained visits. It's one of a number of alternative structures becoming more attractive to many physicians who are tired of the grind of modern patient visits and the hassles involved in dealing with insurance. Recent surveys and an increasing number of physician inquiries to the Texas Medical Association's Practice Consulting Department indicate concierge and direct-pay models are piquing physicians' collective interest.

Although the two approaches are similar, physicians in a direct-pay model generally don't bill insurance at all, whereas some concierge practices may bill select payers for covered services.

"Yes, I can get through it. Yes, I've learned the art of connecting with people given those small [visit] times. But it's definitely a lot more exhausting," Dr. Manoj Bhardwaj said. "Doing that toward the end of the day you feel very drained, and a lot of physicians all across the board are feeling that exhaustion."

The Trend

Time is a concern for Shelly Sethi, DO, who's ready to set out on her own without taking insurance. After nearly a decade at Austin Regional Clinic, Dr. Sethi was planning to open a new cash-only integrative medicine practice in May.

Dr. Sethi says she would have loved to have worked with an insurance-based model "because I felt like that was for sure the way that I could access the greater number of patients." But with the overhead and staffing costs for billing and coding in mind, she says, "I've chosen to actually translate some of those costs instead into time."

"Not taking insurance allows me to really cut down on my overhead costs … and really be able to spend the time that I want with my patients," she said.

Dr. Sethi says people will often ask her what the most important ingredient of an integrative medicine practice is. Is it yoga therapy, music therapy, or supplements?

"My answer is no, it's just time because a lot of what happens with [more] time is that I get to develop the relationship with a patient, and that informs a lot of the healing that's going to happen," she said. "That's really important to me, and when I've had that time to be able to spend with them, it has really brought back the joy in practicing medicine. I just really appreciate hearing their stories and being able to be on that journey with them." 

In the Physicians Foundation's 2014 Survey of America's Physicians, 7 percent of physicians said they were already practicing some form of direct-pay or concierge medicine, while another 13 percent said they were planning to transition to some form of it, in whole or in part. A higher share of physicians aged 45 and younger (17 percent) indicated they were planning on making such a transition.

In Texas, the survey showed, 18 percent were considering the transition, and 9 percent were already using a direct-pay or concierge model. (See "Survey Results Are In," December 2014 Texas Medicine, pages 31–35.)

If the results of a September 2015 study by medical technology provider Kareo are any indication, direct-pay and concierge models have attained an even stronger pull in recent years, with nearly half of physicians saying they'd likely transition to an alternative membership model in the next three years. (See "Patient Care Without Hassles.")

"It's really exploded over time," Dr. Manoj Bhardwaj said. "I think if it's done right, if you do it for the right reasons, it can be a good fit for a patient and a physician."

However, the results of TMA's 2014 Survey of Texas Physicians show doctors in the Lone Star State aren't actually making the shift to alternative membership models in large numbers, at least not yet. In that survey, just 2 percent of physicians said they had a concierge practice, a statistically insignificant 2-percent drop from the 2012 survey. Nine percent of physicians in the 2014 survey said their practice was all or mostly cash or self-pay, a 1-percent decrease from 2012.

Steps to Make the Switch

Switching to an alternative membership model significantly lengthened the career of family physician William Jones, MD, the founder of Concierge Family Medicine in Austin. Back in the early 2000s, Dr. Jones was in his early 60s and planning to retire. 

"I just thought, 'I've just had it; I'm not going to deal with these hassles anymore,'" he said.

He transitioned his practice to a cash-only model first, and about a year-and-a-half later, he began charging an annual fee. (See "The Careful Concierge," June 2008 Texas Medicine, pages 33–38.)

Dr. Jones says he started the move to cash-only by ending his involvement with what he calls "the worst insurance payers." The practice gave patients who used those carriers about 90 days' notice and tried to make the transition as easy as possible for them. For patients who wanted to file their own out-of-network insurance claims, the practice provided them with a completed health insurance claim form to sign.

"We even gave them an envelope addressed to their insurance company with a stamp on it so all they had to do was sign the claim form and mail it in," he said.

Dr. Jones says the practice gradually dropped all insurance payers over the next year, "making sure the sky wasn't going to fall." At the end of that year, the practice was able to get by with one fewer employee because it wasn't billing insurance, and Dr. Jones says his net take-home pay was about the same as it was before the switch. 

When he decided to start charging an annual fee, Dr. Jones set that figure by examining the numbers to see what a typical patient was paying for office visits and physical exams. The practice gave patients written notice of that change, as well.

"I just said, 'As of [this] date, we're changing to this; it'll probably be about what you're spending now, but we're making this change. We hope you'll stay with us.' And a lot of people did," he said. "Some people went away and then came back because we had them so spoiled."

The results ultimately brought a dramatic shift in Dr. Jones' career outlook. More than a decade later, he's still at it alongside his son, Mason Jones, MD, who joined the practice in 2007.

"[Now that] I made the switch, I'll never retire," Dr. William Jones said. "They will have to carry me out of here feet-first someday. But I'm not leaving because I love it; it's all about the patients."

He says the more relaxed pace of the practice is one major benefit.

"We don't ever feel harassed or hassled," he said. "We like it that our income is fixed for the year. We're seeing some new patients, but basically, at the beginning of the year, you know how many patients you've got, and that's your income for the year."

Patient care is much more personal with his current setup than it used to be, Dr. William Jones says.

"We can focus 100 percent of our energy on our patients and sometimes take the time to spend 30 minutes or an hour with them, if they just want to talk about their family situation or their concerns about their health or anything else," he said. "I think it makes the relationship much more personal because you're not being rushed to get one patient through every seven-and-a-half minutes. You can really spend time and drill down into their issues. We're able to practice very proactive medicine instead of reactive."

Thomas LaGrelius, MD, a family physician in Torrance, Calif., offered several tips for physicians considering a switch to a concierge model in a February 2016 article in the journal Physicians Practice. 

Those tips include: 

  • Employ a conversion consultant to help with the transition;
  • Don't attempt to run a hybrid practice, in which patients have the choice of either fee-for-service or paying an annual fee;
  • Make sure all patients who don't stay with the practice transition to another physician and have access to emergency care in the interim; and
  • Offer round-the-clock phone access to patients. 

Dr. William Jones says his patients have 24/7 phone access to him and his son, as well as the practice's registered nurse.

"We liken it to the difference between going to the Motel 6 or the Four Seasons," he said. "At both places, you're getting soap and air conditioning and clean sheets, but the experience is different at the Four Seasons than it is at the Motel 6. It's their choice; you pay more at the Four Seasons."

Considerations and Risks

A strong advocate of concierge care, Dr. William Jones acknowledges it's a risky move. He says he's received a number of inquiries from other practices about what it takes to make a concierge practice work. He says interested physicians shouldn't be carrying a lot of debt and should be on the same page with their spouse about the family budget.

"And in case it's a really slow start," he added, "you've got to have enough reserves that you can carry yourself for six months or a year until things start to pick up."

Such a major switch may be easiest for primary care physicians with an established patient base that may be more willing to follow the practice to a new membership model.

A practice's relationship with Medicare is another factor to consider. As Austin attorney Joseph Geraci explains, "If it's covered under Medicare, they take the position that your Medicare payment is the totality of what you can charge." 

In fact, Dr. William Jones says practices caring for Medicare-aged patients need to sever the relationship with Medicare completely while making the transition. He says undertaking a "mixed practice" — one that processes insurance claims for some patients and accepts cash from others — isn't a viable option.

If the practice does cut ties with Medicare, which not all concierge practices do, its patients must agree in writing to not submit claims to Medicare. Following the passage of the Medicare Access and CHIP Reauthorization Act of 2015, physicians who opt out of Medicare only have to do so once; previously, they had to renew their opt-out every two years. View the Centers for Medicare & Medicaid Services' guidance for opting out of Medicare.

As the elder Dr. Jones experienced when he made the transition, an exodus of Medicare patients is a strong possibility, and those patients likely won't be the only ones.

"Some patients of Medicare age will leave, and then the ones who have other insurances, the majority of them will leave," he said, "because they like the idea of getting everything free and not having to pay anything for their health care."

Dr. Jones says about 90 percent of patients may leave upfront, "and then you can begin to build up with word of mouth from the existing patients, the ones who like what you do."

However, his experience is that the Medicare-aged patients who have stayed with Concierge Family Medicine love the care they receive and refer their friends. That's because they have so many health problems and are able to get much more attention than they would from a rushed primary care physician, he says.

In a May 2014 article in Medscape's Business of Medicine, Michael Tetrault, editor-in-chief of the online journal Concierge Medicine Today, said about 80 percent of concierge physicians charge an annual fee between $1,200 and $3,000. He said 80 percent of concierge physicians accept insurance, including commercial insurance and Medicare.

Concierge Family Medicine now charges new patients a minimum of $1,300 per year, Dr. William Jones says, with incremental adjustments based on patients' age. Older patients may have considerably higher fees.

"I was already over 60 when I made the switch and was prepared to retire and so it was no gamble for me. If it didn't work, then I was fine," Dr. William Jones said. "But we doctors, we have no other skill set besides practicing medicine. It's not like you can go out and immediately find another job because we're not trained to do anything else. If a doctor is 50 years old and has a couple of kids in college and a mortgage and some car payments and stuff, it's risky to put your entire career at risk."

New Opportunities

Dr. Sethi says the younger generation of patients has different expectations for what a doctor visit means.

"Going and waiting for an hour and then having the seven-minute office visit and then walking out with the prescription and a piece of paper of recommendations, I think, is just not what their expectation is anymore," she said. "This has actually allowed me to really be creative about how I want to help transform what we look at as far as providing health care in our country. It's really fun, actually, because I get to be creative, too."

The benefits of a concierge practice speak to why physicians-to-be endure years and years of extra training while their friends are already working in their chosen fields, Dr. William Jones says; they didn't go to medical school so they could engage in "assembly-line" care.

"The only reason they invest those extra eight years is because they want to … be concerned and involved with people and nurture them, especially when they're hurting, and take care of them and do positive things for their health and their psyche," he said. "Doctors are caring people, and they go through this whole system and they put in the extra eight years, and then they come out into a system that doesn't allow them to do what [they wanted to do] in the first place."

Concierge medicine won't solve all of the United States' health care problems, Dr. Manoj Bhardwaj says, but he believes it represents the future of medicine and will become more fine-tuned over time. The biggest struggle, he says, will be raising public awareness of what a concierge model is.

"We really wanted to make people understand that it's for everyone," he said. "We're hoping that people will understand in the long run, it's something that's affordable [and] cost-effective for them when they look at the benefits in the long term, as far as decreased hospitalization, being able to communicate openly with your doctor, who will not only be your health care advocate but also a friend."

Joey Berlin can be reached by phone at (800) 880-1300, ext. 1393, or (512) 370-1393; by fax at (512) 370-1629; or by email.

SIDEBAR

TMA Practice Setup Services

When establishing or relocating a medical practice, myriad tasks and important decisions await. TMA Practice Consulting's turnkey practice setup service can ease the setup challenges.

TMA Practice Consulting setup services include:   

  • Creating a financial plan, 
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  • Vendor and technology selection, and
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Contact a TMA consultant at (800) 523-8776 or by email.

SIDEBAR

Patient Care Without Hassles

Medical technology provider Kareo polled 862 respondents on their use and consideration of concierge medical practice and other alternative membership models in a September 2015 survey. The poll included 206 private physicians, 477 insurance-based/fee-for-service physicians, and 179 other participants, such as practice managers and billing managers. 

A little more than three-quarters of the respondents said they weren't currently using a concierge, direct-pay, or other membership model. But 46 percent said they would likely transition to one of those alternative models in the next three years, with 32 percent saying they were "somewhat likely" to do so and 14 percent saying they were "highly likely" to do it. 

The survey also asked private and insurance-based/fee-for-service physicians what their top two motivations would be for switching to private practice. A majority of private practice physicians, 65 percent, listed spending more time with patients as one of their top two motivations. Other top motivations among private practice physicians included separating from the insurance payer system (46 percent); improving work-life balance (42 percent); and practicing lifestyle, functional, or integrative medicine (38 percent).

Physicians practicing in more conventional practice settings chose spending more time with patients as their most common motivation (42 percent), with separating from the insurance payer system close behind at 41 percent and earning more money garnering 39 percent of the vote.

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