Concierge Pediatrics: Is It Within Your Reach?

Pediatricians increasingly frustrated and disillusioned with the current state of health care may dream about returning to a time when practicing medicine was simpler and insurance companies did not control healthcare. Some pediatricians may be inspired by  those who discarded their third party payer contracts to practice medicine on their own terms, but many think this approach has no place in reality.
 
Don't be too hasty to discard this idea, says Chip Hart, director of Pediatric Solutions at PCC. "This is a real possibility for some pediatricians."

Concierge medicine, also known as "boutique" medicine, has been gaining attention in the media and throughout the healthcare industry. This style of medicine means that practices charge patients an annual fee in lieu of accepting insurance. While this style of medicine is often taken to mean premium health care or even house-call only medicine, Hart insists that it is not necessarily elitist. In fact, he notes that patients are often able to recover a significant portion their fees from their insurance company. "It simply means you want to spend more time with your patients."

Declining reimbursement and increasing administrative costs have forced pediatricians to see a higher volume of patients and cut appointment times to  simply maintain their practices. For some, the idea of unhurried medicine is more appealing than ever.

Before discounting the idea that your practice can make this change, Hart says making a few calculations might convince you otherwise. "This is the math insurance companies don't want you to see."

As an example, Hart takes a busy pediatric practice that is aggressive with immunizations, conducts a high volume of well visits, and effectively manages chronic care patients. "Let's say this practice conducts 30,000 visits a year, brings in $100 per visit, and has 7,500 patients who make up these visits," says Hart. "Assuming all these things, you still would not have to sacrifice your clinical impact or financial situation if you chose to drop all of your insurance contracts."

With some simple math, Hart concludes that you would need to charge as little as $400 a year per patient (less than $40 per month!) to maintain your standard of living and care. He concedes that keeping the same patient load is not realistic or even necessary when running a concierge practice. "So, then assuming you maintain only one third of your current patient load, you would only need to charge an average of $1,200 a year per patient to maintain the same income. That's only $100 a month," he says. "With the high cost of family premiums, that's a much lower figure than what most people are paying annually per child."

The question, then, is not about whether it's financially plausible. "The two variables that determine whether or not your practice will succeed in this type of environment are the age distribution of your practice and the health care you don't provide," says Hart. Younger patients have higher costs of pediatric care because of immunizations and frequent well visits. The two ways to account for this, Hart says, are to either charge a sliding scale fee based on age, or offer pediatric care for newborns as a one or two year package. "Your patients should also have indemnity or catastrophic insurance to cover services not provided by pediatric care," he adds.

PCC has seen practices make this transition, and is currently helping a busy pediatric practice through the process. "We can help you manage these variables and achieve success." The key to longterm financial health and a satisfied customer base in a concierge practice, is "knowing your patients and their needs," says Hart. "It's also important to design a system in your office that gives patients value for what they pay." A crucial piece to the success of concierge practice is having clinical and management tools to keep your patients happy and healthy. This includes a pediatric-specific recall system, personalized patient educational handouts, and a system for tracking immunizations.

PCC's practice management system, Partner, can help your practice with each of these tools essential in managing a successful practice, especially a concierge practice. If you are seriously considering concierge medicine, give PCC a call and we'll work with you to determine if it's right for your practice and help you achieve your goals.

More Resources:

Like the idea of Concierge healthcare, but want to read about some variations or alternatives? PCC's Chip Hart has written a number of blog posts on the subject. Try these two for ideas about alternative approaches to concierge medicine:

The State of Pediatric Concierge Medicine

Microcapitation

Or, see a list of all blog posts about this topic.