Tea, crumpets, and thyroids--what role will concierge medicine play in primary care?
One of the sad realities in the American healthcare system is that small physician practices, in both primary and specialist care, are struggling to make ends meet. Private practices are at a crossroads, looking for alternatives to brick-and-mortar business models where capital costs of servicing patients remain high and reimbursement revenues are uncertain.
To that end, in the past two decades, over 5,000 primary care providers across the US have switched towards concierge medicine, a retainer-based model that charges patients annual and monthly fees. As advocates argue, the concierge model promises higher profit margins, shorter wait times, and tailored patient visits, which they believe will promote better health outcomes for patients—in some cases cutting out the insurer altogether.
For providers, one of the more cost-effective approaches to concierge medicine is to support outpatient services only (and thereby lower capital costs). Companies such as MedLion follow this model and leverage their patient networks to negotiate discounts on specialist care, imaging, and lab tests from third party providers. MedLion charges three levels of membership fees to provide primary care services to individuals and employer groups: $59/month for non-seniors, $39/month for seniors 65+ on fixed income and $19/month for children. Each office visit is $10 irrespective of complexity.
If employers/insurers help pick up the tab for services like MedLion, there is great potential to extend the reach of outpatient concierge services to the workforce, reduce unnecessary hospital visits and in turn free up waiting rooms. This all sounds pretty cool, right?
Maybe, but there are some caveats. On the patient side, the early adopters of concierge services have been relatively healthy individuals who do not need extensive care. This adverse selection in favor of healthy individuals makes sense for the concierge model. After all, to live up to the promise of dedicated one-to-one patient engagement, the concierge doctor needs to select a patient population where a large percentage of patients are unlikely to show up frequently. In contrast, it’s unclear whether the concierge model can work for a population of chronic disease patients, who account for over 75% of healthcare costs.
It is noteworthy that in making the switch to concierge care, many doctors have elected to reduce their patient bases by as much as 80-90%. While this enables more dedicated care for the patients they serve, it underscores the economic reality that concierge services cannot be a catch-all.
Still, the financial incentives of the model suggest that there is an opportunity to give concierge doctors a greater share of the burden for outpatient services, which can help alleviate costs and improve patient outcomes for certain populations. There are numerous opportunities for cost-saving, "aging-in-place" partnerships too. Continuing care retirement communities (CCRCs), assisted living facilities, independent living facilities, and home care agencies are all looking to keep older adults at home. As dollars increasingly flow towards these organizations, concierge doctors should have an opportunity to claim a growing piece of the pie.