Back on the SOAPM list, I saw an interesting discussion about concierge practices. There was the usual commentary ('Only crazy people in super special circumstances could do that!'), so I thought I'd take a moment to dispel some of the myths. I suspect that if some of the naysayers stopped to do some simple math, they'd be surprised by the results.
Let's pretend that you are a busy practice in northern NJ making good money. What would it take to drop all of your insurance and spend more time with your patients? How much would you have to charge people?
We'll make some grand assumptions:
Let's say that you end up doing 30,000 visits a year and bring in $100 a visit. You have 7500 active patients who make up these visits.
Do you know how little money you would need to collect from your families instead of the insurance companies to maintain your standard of living and care?
7500 active patients, divided by $3,000,000?
$400 per patient per year. Not even $40 a month.
Think about that. If you simply skipped the middleman, you'd have to only collect $400 per patient to meet the same level of income you have presently. That's providing all the immunizations, taking in everyone who calls (which you do now), having the same staff, etc.
I realize, of course, that it's not that simple. All your patients won't do it, for example.
But think about it a little more. If only 1/3 of your patients chose this route...you would only have to charge them an average of $1,200 apiece. That's it. $100 a month. And you could spend an hour with them every time they came. Imagine...1/3 the visit volume, only $100 a month. You could probably cut your staff by 2/3s, increase the pay of the ones who are left so they'd never leave, and give each new mom a massage with every visit.
Believe me, this is the math the insurance companies don't want you to see. For once, it isn't the money that's the problem.
[In my mind, there are two great variables here: the age distribution of the practice and the health care you don't provide. Those are both quite manageable.]
Over on one of the MGMA mailing lists (whose content and quality seem to diminish over time), the ED of an interesting organization - True North: Maine's Center for Functional Medicine and the Healing Arts - posted a message about their cash-only business. I poked around and found this segment in their pediatric section:
Best First Year of Life
This package approach to Kathryn’s services allows a family to purchase a year of care in one lump sum or in quarterly payments. The package includes: a prenatal consultation, up to 2 hospital visits for normal newborn care, well-child visits at 1 week, and at 1, 2, 4, 6, 9, and 12 months, one hour of phone consultation time, one, 30-minute behavioral or parenting consultation, two acute visits and a one hour pediatric class.
...that's exactly what I've described offices should do in the face of the HSA programs (only Lynn Cramer @ Eden Park Pediatrics seems to have investigated the possibilities). I'm excited to see someone actually do it!
"A few weeks back, I pointed out a living, breathing example of a successful cash only pediatric business. I've also added a few posts about concierge pricing and what our customers are doing.Meanwhile, over on her blog, Susanne Madden adds some insightful commentary on the subject, including one point in there which is quite subtle, but incredibly important:
In the case of insurers, some don't want physicians to charge these fees to their members citing contract provisions excluding them from doing so, while others do not have a problem with it.
Sure enough, some of the major payers (Aetna, Cigna, and others, I believe) are "allowing" their patients to work with "concierge" practices. This is the hole in the dam we've been waiting for, imo. You now no longer immediately alienate some of your patients when you begin to provide a concierge solution. You can develop your solution and then grow it. No need for a radical change.
Susanne has gone so far as to find another living, breathing example of a concierge group. Check out this national program: MDVIP. To become an MDVIP provider you must, among other things, limit yourself to 600 patients (an interesting start). What I like about their sales pitch is that "prevention and wellness" appear so close to the top of benefits of working with them. I think it ought to be #1, personally, but it's a good start!Two additional pieces to read:
I've got a stack of things to post, but I want to get this one out before I wake up the kids and start a new Monday. Here is an excellent piece about concierge medicine from Medical Economics. I don't call it excellent because it supports some of my previous comments, but because it offers some real research and practical advice. In particular, the details at the end of the article regarding the types of practices who may or may not benefit from the model (etc.) is well done. I was shocked, at first, to see the pressure applied to FFS practices in Washington and West Virginia, where the inscos, through the office of the insurance commissioner!, tried to force practices to accept insurance. Insane. A good indication of what we're up against.
It also pointed me to the Society for Innovative Medical Design (Simpd), who happens to be having its annual symposium this week in Vegas. Had I known, I think I would have attended.
I just stumbled onto a goldmine of a blog whom I've referenced before but I hadn't really explored. Lo! and Behold! a series of fascinating pieces about the concierge medicine concept but with language and articulation I haven't encountered previously. A new term - microcapitation - seems to be a perfect description of the "Care Package" concept that I've talked about here and in seminars. I'll see if I can poke the author into looking directly at the preventive care packages that seem so natural for pediatric offices.
Anyway, I see a title forming for my next SOAPM newsletter piece. Microcap. Care package. Personalized medicine. There's something in that. I like it.
Over on one of the coding lists, someone asked for a copy of a "a sample discharge letter for non-compliant families who refuse to vaccinate?" and I could have sworn I had a few handy. And I didn't. A quick appeal to PedTalk got me a pair of items quickly. My thanks to Drs. Barden and Mirkin for the links.
First, here is an excerpt from the Vaccine Refusal Packet from Coastal Children's Clinic. Awesome work. It's as if Dr. Barden and his crew have been to one of my Patient Education talks (and he hasn't). Great work.
Dr. Mirkin (of MDs4Kids and Allied Peds) has posted his Vaccine Policy for the world to see.
I told myself I'd never read or listen to another Robin Cook book again - I find the writing absurd - but I am almost through 'Crisis' on my iTouch. Fundamental to the plot is the concept of 'concierge medicine.' Just as I was thinking, "He's having the debate about concierge," one of the characters literally said, "It's as if concierge medicine is on trial!" Har.
The underbelly of the insurance industry came into view earlier this year in New York. Here's a great summary, stolen directly from histalk2.com. Look at the conclusive sentence:
A NY physician, concerned by the number of patients losing their jobs and health insurance, begins offering patients a flat $79 a month fee that covers unlimited preventive visits and onsite medical services such as minor surgery, physical therapy, lab work, and gynecological care. State insurance officials notify him his model is not legal and for sick visits he must charge enough to cover his overhead, which he estimates to be $33. The state insurance officials claim the rules are meant to protect consumers. Hmm … sounds perhaps like the officials are trying to protect the insurance companies, but what do we know?
Insane. Note that this provider estimates his per-visit overhead costs to be $33. That seems awfully low to me.
I don't think that concierge medicine is the solution to the myriad healthcare problems in this country, but there are certainly elements of it that make a lot of sense, especially in the primary care arena.
First, I just got back from a great weekend at Skytop Lodge, where I spoke for the Goryeb Children's Hospital. Had an excellent time, hung out with some old friends, learned a lot. This may be the best pediatric conference to which to bring a family anywhere in the country. Well, that and our AAP endorsed Orlando event in July.
Meanwhile, I asked the other day if anyone were interested in putting together a pediatric-focused "concierge medicine" community. I've had a few positive reponses and no negative, so I'm going to work on it here at PCC. Stay tuned.