If you’re disheartened by the state of medicine these days, you’re not the only one. Due to diminishing financial margins in the healthcare industry, there is unprecedented pressure on physicians to minimize patient visit times and employ an assembly-line approach to patient care. In response, many of your colleagues are turning to alternative practice models, such as concierge medicine, which can offer comparable compensation and reinvigorate job satisfaction.
A large percentage of the medical profession is opting out of high pressure, volume-driven medicine and choosing to open boutique concierge practices which feature fewer patients, 24/7 physician availability, personalized care, and a retainer fee system. In 2015, there were about 5,000 concierge physicians practicing in the United States, but this group is expected to expand rapidly in the coming years.
A survey performed by Merritt Hawkins found that almost 20% of 20,000 physician respondents were currently practicing as concierge providers at a boutique medical practice or planned to in the near future.
"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.”
Concierge medicine encompasses a broad range of practice models, but is primarily defined by a direct financial relationship with patients. The primary classes of concierge practices are retainer-based or direct primary care (DPC). Neither type permit co-pays, co-insurance fees or deductibles, although some retainer-based practices accept insurance.
Although almost 80% of retainer-based boutique medical practices accept insurance, DPCs don’t, in an effort to diminish overhead costs. DPCs limit the services they offer to avoid referrals to non-partner specialists, also to limit operating costs. Retainer-based concierge medicine practices – which are less cost conscious – typically offer a broader array of services.
There’s also a hybrid concierge practice model that may suit you if you’re reluctant to part with the majority of your patients. This type of boutique practice allows patients to remain with the practice using a traditional payment method, but it also provides the option to switch to a direct-pay suite of services. The hybrid model is popular among physicians who have a large number of patients with strong emotional ties but would like to diminish stress.
The two most common types of concierge medical practices are primary care and family medicine. These are followed by cardiology and pediatrics. The typical patient load for primary care physicians in concierge practices is 300-750, while specialists generally serve 150-300.
Concierge practices require a monthly or annual retainer payment, but there’s considerable variation in how much they charge. There are a number of factors which influence the size of retainer fees:
- Demand for concierge physicians in the region
- Monthly vs. annual payments
- Services provided
- Acceptance of insurance
There’s some stratification in the concierge market. While there are quite a few boutique medical practices that cater to high-end clientele, the vast majority of concierge physicians base their practices on middle class clients. More than half of all concierge practices charge less than $135 a month, while almost a quarter charge more than $226 a month.
Concierge physician salaries are quite similar to those of physicians in traditional practices. While primary care physicians earned, on average, from $156,000 to $315,000 per annum in 2012, the average annual salary for a primary care concierge physician in that same period ranged from $150,000 to $300,000 according to Bloomberg Businessweek.
Data from 2013-2014 reveals that most concierge physicians earned between $100,000 and $300,000 for the year.
|$1 – $100,000 per year||14% of concierge physicians|
|$100,000 – $200,000 per year||23% of concierge physicians|
|$200,000 – $300,000 per year||25% of concierge physicians|
|$300,000 – $400,000 per year||21% of concierge physicians|
|$400,000 and above per year||17% of concierge physicians|
“The good news today is that the concierge medicine and direct primary care business models provide doctors with hope, a practical billing pattern, price transparency and trust with patients. This is a career path physicians can trust and it’s a proven business model that patients value.”
You’re probably making your career decisions on more than the size of your salary, so you should know that most of the physicians who start concierge practices were happy they did so. A survey by Concierge Medicine Today in 2013 found that 82% of concierge physicians were “Somewhat” or “Very Satisfied” they went into concierge medicine. The high level of job satisfaction of concierge physicians is atypical in the current healthcare environment, but it is a result of a more optimal practice of medicine that benefits both physician and patient.
Floyd Russak, MD, President of the Arapahoe, Douglas and Elbert County Medical Society, says of his decision to switch to concierge medicine, “It is just not practical to provide good care to patients in the current reimbursement model without maintaining a full-time practice of nearly 2000 patients, which requires 10-15 minute appointments to see everyone. I now practice a much more rewarding style of Internal Medicine, where I have time for the vastly improved care that comes with longer appointments and following my own patients wherever needed, including the hospital, office, home or rehab. I truly believe this is a better way to practice primary care medicine.”
This patient-centered type of practice produces enhanced outcomes and cost savings for patients. A study in the American Journal of Managed Care reported that primary care concierge practices had 72-79% fewer hospital readmissions for seriously ill patients than their traditional practice counterparts. The fewer hospital visits reduced costs for patients by $2551, on average.
More of your medical colleagues are recognizing that the traditional form of medicine is about sick care rather than optimal health. This often places physicians in the unfortunate position of fixing problems rather heading them off. However, a concierge practice emphasizes a deep, personal relationship that prioritizes preventive care.
Bret Jorgenson, CEO of MDVIP, explains, “The people that buy into this model are really trying to buy into a personalized engagement model focused on prevention. The fundamental model is reducing the size of the practice to a smaller patient population, and I will tell you that it works.”
Direct pay concierge practices might just be the right move away from unfulfilling clinical care, but it isn’t perfect. In order to practice concierge medicine in some states, you may need to comply with state insurance laws. Some states may consider your concierge practice an unlicensed insurer because you are assuming risks similar to an insurer. For example, you could be violating New Jersey’s insurance code if you’re only offering premium services to those who can afford retainer fees.
There is also the potential for conflict with Medicare. You could be violating Medicare laws which bar physicians from receiving more than the “limiting charge for non-participating physicians” or the “allowable amount” for participating physicians. These kinds of impositions have prompted many boutique practices to limit services not covered by insurance or to opt out of Medicare. Opting out of Medicare can be an involved process that is best completed with the assistance of expert legal counsel.
Concierge practices are small businesses and will depend on successful management and marketing. If you’re like most medical professionals, you probably have limited experience in these areas. While you can invest in additional education, hiring management and marketing professionals to handle these aspects of the operation may be a more effective option when transitioning to a concierge medicine business model.
If you do hire business specialists, it’s in your best interest to hire ones with extensive experience in concierge medicine. Otherwise, you could be jeopardizing your practice and risking criminal prosecution. For example, improper promotion of your practice may be considered a criminal infraction. If you’re marketing your practicing by offering “free” services, these no-charge services may be construed as kickbacks which violate state and federal laws. To avoid these types of violations, adding a seasoned health law attorney to your team is probably advisable.
When you’re considering if concierge medicine is right for you, you may also wish to factor in some ethical considerations. Although most concierge practices don’t cater exclusively to the wealthy, there’s a common misperception that that is the case. Even if your new practice welcomes patients from all types of economic backgrounds, you may still be branded as a “VIP” physician.
Beyond perception, you may also wrestle with the more substantial issue of leaving some of your patients without a physician. You may even construe this as contributing to the national physician shortage. However, there are some ethical counterarguments. The patients you retain as a concierge physician will be receiving better care. Furthermore, by maintaining your enthusiasm for patient care, you’re safeguarding your career for years to come, while many of your colleagues will suffer burnout – a much more severe loss to the public health system.
“It’s not going to create new doctors, but it does keep physicians providing primary care. They’re more invested in where they work. They are less likely to leave. They are much closer and more connected to their patients.”
There is no way to know for certain if a concierge practice is on your road to professional bliss, but the mass migration of so many physicians into this practice model does suggest there are an abundance of advantages. You may not make significantly more in a boutique practice, but statistics show that you may enjoy practicing medicine more.