No appointment? No problem . . . for a price
The words “concierge medicine” can easily conjure an image of a private practice doctor in a swanky downtown office, providing care to only the most well-heeled patients able to afford an annual copay of tens of thousands of dollars. Perhaps a limousine picks the patient up for the appointment. Maybe the doctor’s office comes equipped with a juice bar and world-class gym.
Less frequently is concierge medicine associated with the nation’s hospitals, which are more known for their care for the poor and uninsured. But major not-for-profit health systems are opening primary-care practices to cater to wealthy patients. Acclaimed systems such as the Mayo Clinic, Rochester, Minn.; Stanford Health Care, Palo Alto, Calif.; Duke Health, Durham, N.C.; and Boston’s Massachusetts General Hospital, part of Partners HealthCare, are a few examples of the small but growing number of hospitals with concierge practices.
While hospital-owned concierge practices don’t necessarily offer the sort of luxury experience that may come with a high-end independent concierge practice, they do offer patients greater access to care—a commodity that is growing harder to come by as the primary-care physician shortage worsens.
For patients with busy schedules or chronic con- ditions, an annual retainer ranging from $2,500 to $6,000 at hospital-owned practices may offer the ability to schedule a same-day appointment, or text a doctor day or night if a health issue arises. The annual fee typically is charged on top of any office appointments, which are billed to the patient’s insurance company.
For hospitals, offering concierge services is a way to attract patients who would otherwise seek those services from the many independent concierge practices popping up across the nation. It also helps bring in extra revenue that the hospital can use to support services that benefit patients with lower incomes, some hospitals with concierge practices say.
“We are not doing this just to make more money—we are doing this to make money to put back into the mission of the hospital and to support programs that otherwise would be difficult to support,” said Dr. Paul Huang, a concierge doctor at Massachusetts General Hospital, which launched its two-doctor concierge practice in August 2016 and now serves 200 patients. The practice has plans to grow to at least six doctors in the next couple of years.
The concierge medicine model surfaced in the mid-1990s, when some doctors, fed up with the pressure to see dozens of patients daily, charged
The revenue from the program at Virginia Mason Health System in Seattle boosts the hospital’s bottom line and
“helps the hospital take care of those who are potentially less able to afford healthcare.”
Dr. Leland Teng, Virginia Mason’s medical director for concierge medicine
high retainers to rich patients who wanted highly personalized care. Today, though, concierge medicine has spread to the middle-class for a much lower cost.
Patients pay an annual fee for nearly unlimited access to their physician as well as care coordination with specialists. Health insurers do not cover that fee. Concierge physicians are able to provide heightened access by limiting the number of patients they see to a few hundred. Traditional primary-care doctors typically see 2,500 patients annually. Oftentimes, an independent concierge doctor can make as much or more in income as a traditional doctor even while seeing fewer patients, experts say.
Physicians like the pace
Doctors who have switched to concierge-style medicine sing its praises, claiming the smaller patient panel allows the doctor to build relationships with patients and spend more time on preventive medicine. Boca Raton, Fla.-based MDVIP, a concierge medicine network of 950 concierge docs in 44 states, claims its patients have better health outcomes and fewer hospitalizations. The company’s doctors serve about 240,000 patients.
Still, the number of practicing concierge physicians is small. About 7% of physicians practice some form of concierge medicine, and nearly 9% said they plan to switch to a concierge practice in the next couple of years, according to the Physicians Foundation’s 2016 survey of 17,000 doctors conducted by physician staffing firm Merritt Hawkins.
No data on how many hospitals own concierge medicine practices could be obtained, though generally they’ll be in well-known systems in urban markets with plenty of affluent patients. Industry experts say the numbers may grow as patients, burdened by higher insurance deductibles, demand greater access to care, and doctors, bogged down by reporting requirements and administrative tasks, look for a way out.
“It’s not a bad strategy at all,” said Paul Keckley, a healthcare industry consultant. “It allows (hospitals) to offset some of the costs in primary care that they’re experiencing. Primary care is the least profitable in terms of higher operating costs.”
Not-for-profit hospitals’ revenue grew by 6% in 2016, according to ratings agency Moody’s Investors Service, but expenses widely outpaced revenue growth at 7.2%.
“There are some people who can and will pay more, and organizations that are in the revenue struggle will do what they can to try to identify them,” said Rulon Stacey, managing director of Navigant.
Supports other services
The prospect of a new, steady stream of revenue was Mass General’s motivation for launching its concierge practice. That, and the fact that there was a high demand for primary-care services at the hospital and interest in concierge medicine, said Misty Hathaway, senior director of the Center for Specialized Services at Mass General. Patients pay an annual fee of $6,000 for the program.
Because the Mass General physicians are salaried, unlike in private concierge practices, the margin from the practice goes to “support our core mission, things like our substance-abuse program or other parts of primary care where the margin is a little bit harder to achieve,” Hathaway said.
There’s a similar setup at Virginia Mason Health System in Seattle. The revenue from the program boosts the hospital’s bottom line and “helps the hospital take care of those who are potentially less able to afford healthcare,” said Dr. Leland Teng, Virginia Mason’s medical director for concierge medicine. The system’s concierge practice limits its five doctors to 300 patients each. Patients pay an annual fee of $3,300, or $5,500 for a couple. Neither Mass General nor Virginia Mason would say how much revenue their concierge practices bring in.
Teng said Virginia Mason views its concierge program as a “test lab” for innovation, spinning off successful ideas to the broader system. With fewer patients, the doctors in the practice have more time to innovate. For example, to try to reduce hospital readmissions, the concierge team began calling each of its patients within three days of discharge. Over several months, the team developed a protocol and series of questions to ask each patient, and then helped roll it out to the rest of the system, Teng said.
Not all hospitals start concierge practices to raise extra money. Some experts say the small size and relatively low fees of a hospital-owned concierge practice mean extra revenue would be minimal. Instead, “the primary driver is simply connecting more directly with these patients and becoming more relevant in their day-to-day life,” said Tom Cassels, a consulting partner with the Advisory Board Co.
The Mayo Clinic, for instance, says it launched its concierge practices in Arizona and Florida to fit the lifestyles of busy patients. “We don’t serve all patients the same way because they don’t have all the same needs,” said Dr. Stephanie Hines, the physician leader in the health system’s executive health division. “No two patients come to us that are alike, so we are trying to be flexible.”
Mayo’s concierge doctors charge an annual fee of $6,000 for a single patient or $10,000 for a couple.
Still relatively rare
There is a reason why few hospitals have started concierge practices. Offering different levels of care to patients is not in hospitals’ DNA. “It’s a cultural learning curve, because most not-for-profit health systems are geared toward providing the same level of service to everyone in their community,” Cassels said. “The funda-
mental model of concierge medicine is to price-discriminate.”
It’s also a practical matter. Few physicians have the number of affluent patients necessary to support a concierge practice, said Will Waring, a partner at law firm Jones Walker, who has helped hospitals create concierge services. Moreover, when a physician converts to a concierge model, patients who decline to join will spill over to traditional doctors who are already overworked, he said.
Some controversy
Controversy has followed concierge medicine since its inception. Observers question if it’s ethical to provide what’s arguably better care to only those who can pay for it out of pocket.
“Should we allow people with money to buy a different level of care if they can afford that?” asked Navigant’s Stacey. “Whether or not we should have that debate is irrelevant. We will have that debate.”
Mass General’s Huang, however, said that enrolling in concierge medicine doesn’t allow a patient to “jump the line” in terms of how quickly a patient can see a specialist or be admitted to the hospital.
The American Academy of Family Physicians does not support concierge medicine, saying it could reduce the number of patients with access to primary care, but does support its close cousin direct primary care. Direct primary-care models place most of their emphasis on access and not so much on amenities, as some concierge care offerings do. The AAFP also drew a distinction between the models in a news release, highlighting a comparative study that noted direct primary-care providers generally don’t bill insurers for fee-for-service care and charge less than half per month on average than concierge models. The American Hospital Association declined to comment. Because concierge doctors limit the number of their patients, it could be argued that they are contributing to the primary-care physician shortage. Some experts dispute that, saying there are bigger contributors to the shortage.
Virginia Mason’s Teng initially resisted the prospect of practicing concierge medicine, seeing it as something that “takes care of the spoiled wealthy.” But he came around to the idea because Virginia Mason’s program benefits patients who need it, he said.
“It’s not that high of a price,” he said. “If we can help keep people out of the emergency room, if we keep them out of the hospital, if we keep them out of the nursing home, we more than pay for ourselves in terms of improved outcomes for the patient. . . . Honestly we think we’re part of the answer to the healthcare issues in the world.”