Doctors Living on Loans

NEW YORK (CNNMoney) — Government-backed loans to doctors have surged more than 10-fold in the past decade, a trend industry insiders say is a red flag that doctors in America are in financial distress.

From 2000 to 2011, Small Business Administration loans to physicians’ offices, including private practice doctors and mental health specialists, ballooned to $675 million from less than $60 million.

“The fact that SBA loans have jumped this much is eye-opening,” said Tom Blue, executive director of the American Academy of Private Physicians. “It definitely speaks to the story that doctors are struggling.”

[read full article]

Doctor Makes House Calls

During a break from house calls the other day, Dr. Marc Tanenbaum talked about the joys of being able to tend to his young patients without the constraints of managed care. Or the constraints of a traditional office.
Dr. Marc Tanenbaum sees about 50 families, caring for patients from birth through the college years. Dr. Marc Tanenbaum is a doctor without an office, and he likes it that way. “Have van, will travel,” he says. He launched Priority Pediatrics PC about two years ago, joining the ranks of other concierge practices in the United States.  No more shuttling his patients in and out in 10- to 15-minute slots so that he can work 40 patients into his day. He gets to take as long as he wants or as his patients need.

[full article]

Leading Social Health Company for Women Appoints Lauded Industry Luminary and Former White House Physician to Clinical Oversight Roles

SCOTTSDALE, AZ, Dec 21, 2011 (MARKETWIRE via COMTEX) — EmpowHER, an award-winning social health company for women, today announces that former White House Physician Dr. Connie Mariano will serve as the company’s Chief Clinical Officer and Chair of the Medical Advisory Board. Dr. Mariano is a pioneer in her field and has accumulated a career of many firsts including: the first military woman to become a White House Doctor, the first woman to become a Director of the White House Medical Unit, and the first Filipino-American in United States history to become a Rear Admiral in the U.S. Navy.

[read full article here]

As health rates soar, many choose to forgo insurance

By Amy Jeter - The Virginian-Pilot - © December 18, 2011

Vic Shunkwiler thought he was paying too much for his health plan, so he did something drastic: He stopped buying insurance.

“We hated writing that insurance check every month, knowing that it was so high and we’re probably not going to collect on it because we’re basically healthy,” Shunkwiler, 64, said. “We really felt we were getting ripped off.”

[CONT...]

Vt. doc using new care system that reduces patient load, but increases burden for others

RUTLAND, Vt. — For the first time in years, Rutland primary care physician Dr. Seth Coombs is feeling good about his practice: He’s spending time with his patients, he’s helping them manage their chronic diseases, he’s making house calls and he’s even seeing more of his family.

Coombs is one of the first physicians in Vermont to adopt a new style of medical practice that is expanding across the country. The new system has a number of names, boutique or concierge doctors, personalized medicine, or retainer practices. For Coombs, it means patients pay him a retainer, and he still bills his them or their insurance companies for appointments and procedures.

In return, the patients get his cellphone number and email address and they’re guaranteed appointments the same or the next day. Coombs says he’s also providing better care than traditional practices.

But thousands of his former patients have had to find new doctors, and sometimes people who once called Coombs or his partner when they were sick are heading to the emergency room because their conditions couldn’t wait for an appointment with a new physician.

Some see personalized medicine as an elitist form of medicine that caters to the rich, but Coombs sees it as the only way he can keep his practice open. Among pressures that prompted Coombs to switch were low reimbursements and high costs that had his private practice on the brink of insolvency.

Coombs came to Rutland in 1996 after he had completed his training in internal medicine. He went into private practice the next year. Over the years the pressures built, such as ever-lower reimbursements, more administrative costs and the continuing need to cut down on lengths of appointments in order to see more patients and increase revenue.

“I realized I was halfway through my career,” said Coombs, 49. “I was beginning every day farther behind. I was earning less money than I was when I was fresh out of school and I was working harder than I could possibly sustain.

“Then it hit me on the head: In both my personal and my professional life, I wasn’t even doing what was important for people.”

He’d seen a newspaper story about personalized medicine, so he attended a seminar on the topic and decided to switch. In July, he sent his patients a letter explaining that if they wanted to continue seeing him, they would have to pay the retainer, $1,200 a year for someone under 50, or $1,600 for those over 50. Children are included in their parents’ fees and there are discounts for couples.

From its beginnings in 1996 in Seattle, the number of physicians practicing personalized medicine has grown to 3,500 to 4,000 doctors, most in primary care fields, said Tom Blue, the head of the industry’s trade group, the American Academy of Private Physicians in Richmond, Va.

“For doctors, private medicine is an opportunity to recapture control of their practice, their financial future, and their relationships with patients and to be reacquainted with the satisfaction of practicing thoughtful preventive medicine,” Blue said. “For patients, private medicine is an opportunity to secure a lasting relationship with an easily accessible doctor who has the time and independence to deliver optimal preventive care.”

But ultimately, retainer practices could worsen the problem it is trying to solve, said Dr. Robert Macauley, the medical director of clinical ethics for Vermont’s largest hospital, Fletcher Allen HealthCare in Burlington. Vermont was among the last states to get personalized care doctors.

“We already have a lack, relatively speaking, of primary care physicians. So the reason that people are dissatisfied is there are too many patients and not enough doctors,” Macauley said.

“Efforts are made to ensure that these patients are reassigned to another physician, but there are invariably patients who are either left without a primary provider or who cannot see their new doctor in a timely enough fashion,” said Rutland Regional Medical Center emergency department Director Dr. Todd Gregory. “These patients often turn to the emergency department.”

So if doctors choose to practice boutique medicine, thus treating even fewer patients, that would worsen the problem for doctors who continue to practice traditionally, he said.

The answer is to pay overworked primary care doctors more so more physicians will be attracted to the field, he said.

For his part, Coombs calls his practice a microcosm of his old one.

He wouldn’t say how many patients have signed up, but 70 patients are on what he calls scholarship and don’t have to pay the retainer. Among them are people on Medicaid, the government-run healthcare program for the poor, who now make up 10 percent of his practice.

The biggest change in his practice is that in his old practice about 20 percent of his patients used Medicare, the health insurance program for the elderly. Now the figure is 40 percent.

“I don’t think I have any more wealthy people,” he said. “I have a lot of people whom I was surprised decided that they were going to come up with the money.”

Nan Puchalski said she had her husband made the switch after her 90-year-old mother came to live with them in Rutland. Coombs has made house calls to visit her mother and he’s there when needed.

“At this point in my mother’s care, I felt we had to have this kind of opportunity,” she said.

But said she didn’t know if she would be able to continue paying Coombs after her husband retires. They are both 62.

“This is a good solution for right now,” Pulchalski said. “I know there are a lot of people who couldn’t afford that.”

Coombs’ decision, combined with retirements or moves by other doctors, has added to the challenges for the local medical community. Now people who once had doctors are ending up in the emergency room, the most expensive form of health care.

“Efforts are made to ensure that these patients are reassigned to another physician, but there are invariably patients who are either left without a primary provider or who cannot see their new doctor in a timely enough fashion,” said Rutland Regional Medical Center emergency department Director Dr. Todd Gregory. “These patients often turn to the emergency department.”

There is some relief coming. Coombs’ transition date was Oct. 1. His partner, Dr. Bruce Bullock, made the switch Nov. 15. Fortunately for residents, the switch coincided with an expansion by the Community Health Clinics of the Rutland Region, which has five practices throughout the county, said executive director Grant Whitmer.

A new facility is being opened in Rutland, which could help ease the problem of people getting access to doctors, he said.

“It’s probably not, just because of the way things have come down, nearly as bad as it could or should have been.”

Concierge Medical Practice Celebrates Award Winning Brochure

WASHINGTON—Principal Medical Group, P.C. announced this week that it has once again been recognized for its creativity and excellence. The concierge medical practice’s brochure earned a gold award in design and an honorable mention in the business to consumer category in this year’s MarCom Awards. The competition is sponsored by the Association of Marketing and Communication Professionals (AMCP), which is one of the oldest and most respected creative organizations throughout the world.

“We are honored to know that when competing against some of the top businesses in the world that our brochure stood out and earned multiple honors in the competition,” said David J. Jones, M.D., a physician with Principal Medical Group.

The MarCom Awards are an international creative competition for marketing and communications professionals that showcase excellence and creativity in the concept, writing and design of print, visual, audio and web materials and programs. The competition serves as one of the largest of its kind, as they receive nearly 5,000 entries each year worldwide. Among the participants are Fortune 50 companies, media conglomerates and individuals.

A complete list of MarCom Award winners can be found at http://www.marcomawards.com.

About Principal Medical Group, P.C.

Principal Medical Group is a primary care medicine practice located in the heart of McLean, Va.  As concierge physicians, Principal Medical Group offers the highest level of care, with same-day appointments, comprehensive, preventive services and 24/7 access.  Through its membership model, patients receive personal attention from top doctors during unhurried appointments that start on time.  This enables Principal Medical Group’s physicians to partner with patients to manage complex medical conditions, as well as acute care.  Learn more about Principal Medical Group and concierge medicine at www.principalmedicalgroup.com.

New Concierge Medical Service in Lyndhurst Focuses on Heart Health

LYNDHURST — Many people think only the super-wealthy can afford their own private doctors and a staff of health experts dedicated to their wellness.

With the late August opening of Revati Wellness in Lyndhurst, that is not the case.

Revati Wellness, located at 29001 Cedar Road, Suite 655 in the Brainard Medical Building, makes the claim it is the first concierge primary care practice focusing on cardiovascular health in Northeast Ohio.

The practice is operated by Dr. Thomas J. Morledge, who for the past 16 years was a Cleveland Clinic physician, the last 14 as medical director of the Cleveland Clinic’s Willoughby Hills Family Center.

A concierge medical practice, which is a growing trend around the country, cares for only a set number of patients at any time.

“The average medical practice has about 3,000 patients,” Morledge said. “We will have 350.”

Morledge said by limiting the patients seen, he and his team are able to better care for the patients they have.

When someone enrolls at Revati Wellness, they will pay between $2,400-$4,800. Patients will be evaluated and the cost is dependent upon which of three levels of cardiovascular care each requires.

The first level is for those without evidence of vascular illness, while the third level is for those with advanced cardiovascular disease.

“Level two is the most problematic,” Morledge said. “These people are walking around with vascular disease that cannot be picked up on a stress test, but have a significantly increased risk for heart attack or stroke.”

The cost covers testing, treatments and recommendations for a better lifestyle.

Morledge’s team consists of an on-staff nutritionist, mind-body therapist, massage therapist, exercise physiologist and lifestyle coach. Other costs that are incurred through further treatments are billed to one’s insurance.

With an emphasis given to cardiovascular health, which includes lessening the risk of heart attacks and strokes, Revati Wellness has a new CIMT test that measures the thickness of the delicate lining of the carotid artery.

Information gained from this 20-minute test, along with data from specialized blood tests, genetic tests and lifestyle factors, are used to determine which of the three levels of care is needed for a patient’s disease prevention.

“In addition to conventional or “western” medicine, we also use holistic approaches, which I am also skilled in,” Morledge said. “The treatments I use are well documented.”

Holistic medicine is a way of treating the person as whole, meaning it covers the relationship between the organs in our bodies, as well as lifestyle factors. Holistic care might involve nutritional supplements, mind-body therapies and lifestyle interventions.

Those enrolled in Revati Wellness will have the ability to get same-day, or next-day appointments. These appointments, rather than lasting less than 10 minutes, as happens at most primary care physician visits, will last 30-45 minutes.

Those enrolled will also have after-hours telephone access to their doctor (another doctor will be added to the staff soon), a personalized care program specifically for the patient, and 24-hour heart rate monitoring.

Morledge, 53, has been practicing conventional medicine for 21 years and holistic medicine for 12 years.

This fall, he said he plans to begin offering corporate plans, in which wellness retreats for 14-20 employees are offered.

“I’ve created a wellness program that will improve vitality and allow for people to do better on their jobs, plus they’ll feel better at the same time,” he said.

Businesses interested in the corporate retreats can contact Revati Wellness at (440) 249-4455, or by e-mail at info@revatiwellness.com. The practice’s website is revatiwellness.com.

… the doctor is always in, if you pay enough (click for full article at upenn.edu – text is below.)

For anyone who has ever waited days or weeks to see the doctor, concierge medicine sounds appealing: For an additional fee, patients typically enjoy same-day appointments and 24-hour access, more face time with the doctor and extra preventative care. Doctors who offer concierge medicine say the practice frees them from the constraints imposed by insurance providers and allows them time to give patients the individualized attention they need. Skeptics argue that concierge medicine promotes a two-tiered system, improving health care for a few but worsening it for everyone else.
“It’s an attempt to formalize two-class medicine,” says Wharton professor of health care management Mark V. Pauly. “Those who can pay will get better treatment with a smile, and those who can’t will have to wait.”
Sometimes called boutique medicine, retainer-based medicine or direct care, concierge medicine is a small but growing practice. It started in Seattle in 1996, when Howard Maron, a former team doctor for the old Seattle Supersonics professional basketball team, left his traditional practice of about 3,000 patients and launched a program called MD2, providing exclusive medical care to about 50 families for a retainer. Today, concierge doctors in the United States serve almost a million patients, according to the American Academy of Private Physicians (AAPP), a national association of physicians who provide concierge medicine and fee-for-service health care. The Academy estimates there are about 3,500 concierge doctors nationwide, up from about 2,400 just 18 months ago. It expects the number to double every 12 to 18 months for the next three years.
Concierge medicine comes in many different forms, according to Tom Blue, the Academy’s executive director. About 75% of concierge physicians hold on to their traditional practice, but take additional fees from a small number of patients who receive special perks, priority treatment and services not covered by traditional insurance. On the other end of the spectrum, doctors forgo relationships with Medicare, Medicaid and insurance carriers entirely, building their practice exclusively on patients willing to pay annual retainer fees for care. Depending upon the services, fees range from as little as $60 per year up to $30,000 per year. The majority of patients still carry health insurance to pay for specialized services that their concierge doctor is unable to provide.
For doctors, concierge medicine isn’t necessarily less work, but more satisfying work that allows them to build a more profitable practice. Unlike traditional doctors, a concierge physician builds up an income stream from patient contracts, much like the business of an insurance agent or retainer-based financial planner. That makes the practice potentially more profitable when it is finally sold. “Certainly they are much more in control of their own destiny,” Blue says. “There’s actual equity in the practice and the patients.”
For patients, the much-touted benefit of concierge medicine is that the doctor has more time and can provide them greater access. Concierge doctors “have 80% to 90% fewer patients, so they can do other things that other physicians simply can’t,” Blue adds, such as house calls, email consultations, and more extensive exams and preventative tests that insurance won’t cover.
Prevention is concierge medicine’s most important benefit, according to Randy Baggesen, a concierge physician in Richmond, Va., who says he often catches disease in early stages because his practice focuses on cutting-edge preventative care. Baggesen charges $3,300 annually for his services, which on top of routine care also include tests such as a carotid intima-media thickness (CIMT) measurement, a type of ultrasound to detect plaque in artery walls. Sometimes described as a mammogram for the heart, the test is usually not covered by insurance if a patient is deemed low-risk, so most people don’t get it. The problem, according to Baggesen, is that using current national guidelines, 88% of heart attack victims would have been deemed low to moderate risk on the day before their heart attack, 75% of all heart attack victims have normal cholesterol, and 86% would have passed a stress test. “Heart attack and stroke should be a preventable issue,” he says. “We catch subclinical vascular disease all the time.”
Concierge medicine could grow as the country’s population ages and wealthy baby boomers demand more extensive care, notes Wharton health care management professor Jonathan Kolstad. Physicians, constrained by mounting paperwork, may also find the concierge option increasingly appealing. A study published in Health Affairs in August 2011 found that the average physician in the United States spends $82,975 per year to process insurance claims, coverage and billing, and that a physician’s staff spends 20.6 hours per physician per week interacting with health plans.
“The amount of time spent coding and documenting purposes is quite staggering,” Kolstad says. The growth of concierge medicine reflects “both a demand and supply effect. As more people want this kind of access, physicians see it as a way to gain autonomy.”
‘Off the Grid’
One of those physicians is Steven D. Knope, a concierge physician in Tucson, Ariz., who runs a full-retainer practice that is “completely off the grid” of third-party payers such as Medicare, Medicaid and insurers. He charges an annual fee of $6,000 per individual or $10,000 per couple for full services.
He began his practice in 2000 after spending 10 years in a traditional practice and becoming increasingly frustrated with insurance companies. “When HMOs dominate the practice, for all intents and purposes, you work for them. They set the rates; they tell you what to order,” he says. “They owned 55% of my income stream…. It just really demoralized me.”
When a few of his patients approached him and suggested he shift to concierge medicine, “I said, ‘No, this sounds elitist. It sounds unethical.’” Over time, he changed his mind. “What was unethical was managing this third party system of companies rationing care.”
Today, Knope sees 12 to 15 patients per day instead of 30 or 40, giving him time for pro-bono work with veterans and the elderly. His practice consists of about 300 patients — half of whom pay the fee, and half “who either pay nothing, or sometimes give me a chicken.” A few of his long-time patients, in their 90s or older, cannot afford the annual fee but insist on paying him $5 per visit. “There’s nothing unethical about taking care of the rich because all of us who do this take care of the poor as well,” he notes. “I have this amazing commodity called time.”
Knope believes concierge medicine holds part of the answer to the country’s growing shortage of primary care physicians. “I think the only way you can make primary care attractive is to do some sort of fee-for-service medicine,” he states. “The bottom line is, people are not going to make an investment in medical school and their training to make a terrible living at it…. It’s logical to me that we go back to our roots and we act like any other professional — like a dentist, like a lawyer [and say,] ‘These are my rates; this is what I cost.’”
Arnold “Skip” Rosoff, a Wharton professor of legal studies and business ethics, disagrees. He says the spread of concierge medicine could numb people to the problems in the country’s health care system. Patients who can afford concierge medicine and doctors who choose to offer it will naturally become less interested in finding a solution that benefits the country as a whole, he suggests. “It’s going to devolve into a two-class system of care. If we don’t address the fact that we don’t have primary care physicians and all we do is put a band-aid on it for people who have concierge medicine…. You have just shifted the problem.”
A ‘Gun to the Head’ Model?
Concerns about concierge medicine have grown as it has spread. Some insurance companies have dropped concierge doctors, saying the model violates insurance contracts. Several states have questioned whether concierge medicine goes against their insurance laws. The Office of Inspector General of the U.S. Department of Health and Human Services has warned concierge doctors that charging Medicare patients “an ‘access fee’ or ‘administrative fee’ that simply allows them to obtain Medicare-covered services” could be considered double billing.
Pauly worries about what will happen if increasing numbers of doctors see concierge medicine as an alternative to taking Medicare patients. Medicare is in financial trouble and is reducing its payments to physicians, making Medicare patients less desirable. A survey by the American Medical Association of more than 9,000 physicians in May 2010 found that 17% were restricting the number of Medicare patients in their practice. Among the top reasons: 85% said Medicare payment rates were too low, and 78% said the ongoing threat of future payment cuts makes Medicare an unreliable payer.
“The great majority of doctors still take Medicare patients, but more are refusing to take new Medicare patients,” Pauly says. “If Medicare continues to tighten the screws on doctors … some will react by saying, ‘I’m just fed up with the whole thing.’” And if more doctors shift away from traditional practices to concierge medicine, it could exacerbate the physician shortage because there will be fewer doctors to go around, he adds. That could make it increasingly difficult for non-concierge patients to find a physician.
The hybrid model of concierge medicine may offer a solution, says Wayne Lipton, founder of Concierge Choice Physicians. The private company, based in Rockville Centre, N.Y., helps physicians incorporate both concierge and traditional medicine under a single practice. Physicians usually keep about 2,000 patients but transition 75 to 100 patients into a concierge class that pays $150 to $200 per month extra for enhanced care. That is far less drastic than shifting an entire practice of 2,000 to 3,000 patients to the full concierge model, which accommodates about 350 patients on average.
Lipton calls the full-fledged concierge practice the “gun-to-the-head” model for patients, who must choose between having to pay the concierge fee and losing their doctor. “To me, that’s inherently troubling,” says Lipton. “If we were to promote that as a solution, it becomes a have and have-not environment.”
The hybrid model, Lipton notes, “rebalances the system.” Patients have the option to try out the concierge service without having to change doctors, and physicians are able to create a new revenue stream and ease into a less hectic practice without turning patients away. Patients also have a choice to stop paying for the concierge service if they can no longer afford it or decided they don’t want it anymore. “They’re not hooked in forever,” Lipton says. “They can go back to being a regular patient.”
Wharton health care management professor Guy David is skeptical. While models that trim fees down to $100 or $200 per month may make concierge medicine affordable for the middle class (that’s less than what many people shell out every month for Starbucks coffee, he points out), it’s unclear how much better care a physician could offer concierge patients on top of a full practice. It’s simple mathematics, David says. “What can a physician who has a very full clinic do for those priority patients?” David speculates that becoming a concierge patient in a hybrid practice might be like moving to zone 2 from zone 5 on an airplane — rather than upgrading from coach to first class. “If the effect on the non-concierge patient isn’t big, the effect on the concierge patient isn’t big.”
Another possible outcome: Non-concierge patients in the practice might suffer. Sometimes when firms try to differentiate services, instead of making higher-priced service better, they simply make the lower priced services worse. David points out a classic case from 18th century France, when a train company ripped the roofs off its low-priced cars to encourage customers to buy more expensive tickets. Might concierge doctors begin to resent patients who don’t pay for the extra service and skimp on health care as a result? David wonders: “Once you have this class system in your practice, what’s going to stop [such] behavior?”
David emphasizes that concierge medicine is neither good nor bad, but a natural response to problems in the health care system. He does not consider it a solution for the country. “I don’t see concierge medicine being the new model for 300 million Americans,” he notes. Most people can’t afford to pay retainer fees on top of taxes and health insurance premiums. “When you think about something that is sustainable at the national level, it’s very clear that concierge medicine will not work,” David says, returning to his airline analogy: “You can’t have everybody sit in zone 2.”
“It’s an attempt to formalize two-class medicine,” says Wharton professor of health care management Mark V. Pauly. “Those who can pay will get better treatment with a smile, and those who can’t will have to wait.”
Sometimes called boutique medicine, retainer-based medicine or direct care, concierge medicine is a small but growing practice. It started in Seattle in 1996, when Howard Maron, a former team doctor for the old Seattle Supersonics professional basketball team, left his traditional practice of about 3,000 patients and launched a program called MD2, providing exclusive medical care to about 50 families for a retainer. Today, concierge doctors in the United States serve almost a million patients, according to the American Academy of Private Physicians (AAPP), a national association of physicians who provide concierge medicine and fee-for-service health care. The Academy estimates there are about 3,500 concierge doctors nationwide, up from about 2,400 just 18 months ago. It expects the number to double every 12 to 18 months for the next three years.
Concierge medicine comes in many different forms, according to Tom Blue, the Academy’s executive director. About 75% of concierge physicians hold on to their traditional practice, but take additional fees from a small number of patients who receive special perks, priority treatment and services not covered by traditional insurance. On the other end of the spectrum, doctors forgo relationships with Medicare, Medicaid and insurance carriers entirely, building their practice exclusively on patients willing to pay annual retainer fees for care. Depending upon the services, fees range from as little as $60 per year up to $30,000 per year. The majority of patients still carry health insurance to pay for specialized services that their concierge doctor is unable to provide.
For doctors, concierge medicine isn’t necessarily less work, but more satisfying work that allows them to build a more profitable practice. Unlike traditional doctors, a concierge physician builds up an income stream from patient contracts, much like the business of an insurance agent or retainer-based financial planner. That makes the practice potentially more profitable when it is finally sold. “Certainly they are much more in control of their own destiny,” Blue says. “There’s actual equity in the practice and the patients.”
For patients, the much-touted benefit of concierge medicine is that the doctor has more time and can provide them greater access. Concierge doctors “have 80% to 90% fewer patients, so they can do other things that other physicians simply can’t,” Blue adds, such as house calls, email consultations, and more extensive exams and preventative tests that insurance won’t cover.
Prevention is concierge medicine’s most important benefit, according to Randy Baggesen, a concierge physician in Richmond, Va., who says he often catches disease in early stages because his practice focuses on cutting-edge preventative care. Baggesen charges $3,300 annually for his services, which on top of routine care also include tests such as a carotid intima-media thickness (CIMT) measurement, a type of ultrasound to detect plaque in artery walls. Sometimes described as a mammogram for the heart, the test is usually not covered by insurance if a patient is deemed low-risk, so most people don’t get it. The problem, according to Baggesen, is that using current national guidelines, 88% of heart attack victims would have been deemed low to moderate risk on the day before their heart attack, 75% of all heart attack victims have normal cholesterol, and 86% would have passed a stress test. “Heart attack and stroke should be a preventable issue,” he says. “We catch subclinical vascular disease all the time.”
Concierge medicine could grow as the country’s population ages and wealthy baby boomers demand more extensive care, notes Wharton health care management professor Jonathan Kolstad. Physicians, constrained by mounting paperwork, may also find the concierge option increasingly appealing. A study published in Health Affairs in August 2011 found that the average physician in the United States spends $82,975 per year to process insurance claims, coverage and billing, and that a physician’s staff spends 20.6 hours per physician per week interacting with health plans.
“The amount of time spent coding and documenting purposes is quite staggering,” Kolstad says. The growth of concierge medicine reflects “both a demand and supply effect. As more people want this kind of access, physicians see it as a way to gain autonomy.”
‘Off the Grid’
One of those physicians is Steven D. Knope, a concierge physician in Tucson, Ariz., who runs a full-retainer practice that is “completely off the grid” of third-party payers such as Medicare, Medicaid and insurers. He charges an annual fee of $6,000 per individual or $10,000 per couple for full services.
He began his practice in 2000 after spending 10 years in a traditional practice and becoming increasingly frustrated with insurance companies. “When HMOs dominate the practice, for all intents and purposes, you work for them. They set the rates; they tell you what to order,” he says. “They owned 55% of my income stream…. It just really demoralized me.”
When a few of his patients approached him and suggested he shift to concierge medicine, “I said, ‘No, this sounds elitist. It sounds unethical.’” Over time, he changed his mind. “What was unethical was managing this third party system of companies rationing care.”
Today, Knope sees 12 to 15 patients per day instead of 30 or 40, giving him time for pro-bono work with veterans and the elderly. His practice consists of about 300 patients — half of whom pay the fee, and half “who either pay nothing, or sometimes give me a chicken.” A few of his long-time patients, in their 90s or older, cannot afford the annual fee but insist on paying him $5 per visit. “There’s nothing unethical about taking care of the rich because all of us who do this take care of the poor as well,” he notes. “I have this amazing commodity called time.”
Knope believes concierge medicine holds part of the answer to the country’s growing shortage of primary care physicians. “I think the only way you can make primary care attractive is to do some sort of fee-for-service medicine,” he states. “The bottom line is, people are not going to make an investment in medical school and their training to make a terrible living at it…. It’s logical to me that we go back to our roots and we act like any other professional — like a dentist, like a lawyer [and say,] ‘These are my rates; this is what I cost.’”
Arnold “Skip” Rosoff, a Wharton professor of legal studies and business ethics, disagrees. He says the spread of concierge medicine could numb people to the problems in the country’s health care system. Patients who can afford concierge medicine and doctors who choose to offer it will naturally become less interested in finding a solution that benefits the country as a whole, he suggests. “It’s going to devolve into a two-class system of care. If we don’t address the fact that we don’t have primary care physicians and all we do is put a band-aid on it for people who have concierge medicine…. You have just shifted the problem.”
A ‘Gun to the Head’ Model?
Concerns about concierge medicine have grown as it has spread. Some insurance companies have dropped concierge doctors, saying the model violates insurance contracts. Several states have questioned whether concierge medicine goes against their insurance laws. The Office of Inspector General of the U.S. Department of Health and Human Services has warned concierge doctors that charging Medicare patients “an ‘access fee’ or ‘administrative fee’ that simply allows them to obtain Medicare-covered services” could be considered double billing.
Pauly worries about what will happen if increasing numbers of doctors see concierge medicine as an alternative to taking Medicare patients. Medicare is in financial trouble and is reducing its payments to physicians, making Medicare patients less desirable. A survey by the American Medical Association of more than 9,000 physicians in May 2010 found that 17% were restricting the number of Medicare patients in their practice. Among the top reasons: 85% said Medicare payment rates were too low, and 78% said the ongoing threat of future payment cuts makes Medicare an unreliable payer.
“The great majority of doctors still take Medicare patients, but more are refusing to take new Medicare patients,” Pauly says. “If Medicare continues to tighten the screws on doctors … some will react by saying, ‘I’m just fed up with the whole thing.’” And if more doctors shift away from traditional practices to concierge medicine, it could exacerbate the physician shortage because there will be fewer doctors to go around, he adds. That could make it increasingly difficult for non-concierge patients to find a physician.
The hybrid model of concierge medicine may offer a solution, says Wayne Lipton, founder of Concierge Choice Physicians. The private company, based in Rockville Centre, N.Y., helps physicians incorporate both concierge and traditional medicine under a single practice. Physicians usually keep about 2,000 patients but transition 75 to 100 patients into a concierge class that pays $150 to $200 per month extra for enhanced care. That is far less drastic than shifting an entire practice of 2,000 to 3,000 patients to the full concierge model, which accommodates about 350 patients on average.
Lipton calls the full-fledged concierge practice the “gun-to-the-head” model for patients, who must choose between having to pay the concierge fee and losing their doctor. “To me, that’s inherently troubling,” says Lipton. “If we were to promote that as a solution, it becomes a have and have-not environment.”
The hybrid model, Lipton notes, “rebalances the system.” Patients have the option to try out the concierge service without having to change doctors, and physicians are able to create a new revenue stream and ease into a less hectic practice without turning patients away. Patients also have a choice to stop paying for the concierge service if they can no longer afford it or decided they don’t want it anymore. “They’re not hooked in forever,” Lipton says. “They can go back to being a regular patient.”
Wharton health care management professor Guy David is skeptical. While models that trim fees down to $100 or $200 per month may make concierge medicine affordable for the middle class (that’s less than what many people shell out every month for Starbucks coffee, he points out), it’s unclear how much better care a physician could offer concierge patients on top of a full practice. It’s simple mathematics, David says. “What can a physician who has a very full clinic do for those priority patients?” David speculates that becoming a concierge patient in a hybrid practice might be like moving to zone 2 from zone 5 on an airplane — rather than upgrading from coach to first class. “If the effect on the non-concierge patient isn’t big, the effect on the concierge patient isn’t big.”
Another possible outcome: Non-concierge patients in the practice might suffer. Sometimes when firms try to differentiate services, instead of making higher-priced service better, they simply make the lower priced services worse. David points out a classic case from 18th century France, when a train company ripped the roofs off its low-priced cars to encourage customers to buy more expensive tickets. Might concierge doctors begin to resent patients who don’t pay for the extra service and skimp on health care as a result? David wonders: “Once you have this class system in your practice, what’s going to stop [such] behavior?”
David emphasizes that concierge medicine is neither good nor bad, but a natural response to problems in the health care system. He does not consider it a solution for the country. “I don’t see concierge medicine being the new model for 300 million Americans,” he notes. Most people can’t afford to pay retainer fees on top of taxes and health insurance premiums. “When you think about something that is sustainable at the national level, it’s very clear that concierge medicine will not work,” David says, returning to his airline analogy: “You can’t have everybody sit in zone 2.”

For anyone who has ever waited days or weeks to see the doctor, concierge medicine sounds appealing: For an additional fee, patients typically enjoy same-day appointments and 24-hour access, more face time with the doctor and extra preventative care. Doctors who offer concierge medicine say the practice frees them from the constraints imposed by insurance providers and allows them time to give patients the individualized attention they need. Skeptics argue that concierge medicine promotes a two-tiered system, improving health care for a few but worsening it for everyone else.