Is "concierge medicine" too expensive?

This article yesterday got me thinking about what boutique or concierge practice membership costs, and whether those fees are worth it.

I decided to play around with some numbers.

Let's imagine you, the Sick-of-slaving-for-peanuts newly-minted Concierge Doc, decide to levy an annual fee on your patients, to provide them with same day access, round-the-clock service and satisfying appointment lengths.

You decide to charge adult patients $2500 a year as a membership fee.

Which is $208 a month.

Or $6.85 a day (a latte plus croissant? A burger and fries for lunch? Or a pack and a half of cigarettes?)

Now let's imagine a typical patient who elects to become a member of your practice and who earns $50 an hour (an average). And this patient sees you 6 times a year for mild hypertension, a slightly elevated cholesterol and weight that is 20lbs above ideal body weight for age. Plus you do an annual physical in January based on age-appropriate screening history, exam and tests. So that is 7 visits a year.

You see this patient immediately on arrival at your office, instead of him or her having to wait 45 minutes for Dr. Tortoise 3 blocks away. And the EKG/labwork/check-out process takes 10 minutes (averaged out over the year) instead of 30 over at Dr. T's.

This produces an effective annual savings to the patient of $379 (45 +20 minutes = 65 minutes x 7 visits = 7.6 hours, times $50 an hour of lost earning time = $379).

And I haven't even figured in the savings to your patient of time not having to spend on the phone locating the on-call doctor who doesn't know anything about him or her. Because remember, you've given your home and cell phone number to your members and they can call you directly.

And neither have I figured in the savings of avoiding going to the local Urgent Care Center after hours when Dr Tortoise's covering doc recommends it. Because many of you meet your needy patients in your office after hours, or you even (heaven forbid) make home visits!

So the daily cost of having this kind of access is now reduced to less than $5.85, even without adding in the other big time savers ($379 savings divided by 365 days is just over $1 a day).

Now I ask myself - How much money do I waste in a typical day? On extra toys for my daughter, or another pair of shoes, or food that gets thrown out at the end of the meal, or water that runs too long, or lights that don't get turned off after leaving the room? I bet it exceeds $5.85 a day.

And then there are reputable practices like Qliance in Seattle that are truly pushing the envelope and are charging as little as $79 a month for patients 65 and older (down to $49 for patients 0-19 years of age) for comprehensive care. Who says concierge medicine is for the elite!

Of course, there is a monkey wrench you could throw into my argument. It's the big cost-of-time factor that I haven't addressed - the cost of your patient's time, having to spend 30-60 minutes per appointment with you, receiving your thorough attention and care, instead of their usual 7.5 minutes with Dr. Tortoise. Maybe they are wasting too much of their productive earning time learning how to eat well and exercise, or why taking medications correctly matters.

Is this math way too hard for the average patient? Or is it just that giving up the daily Jamba juice or Pinkberry yogurt in exchange for personalized health care is just too much to ask of anyone? 

BTW - I don't have a bias towards any particular kind of care. I just have a bias against folks who complain when asked to pay for this kind of access they keep whining about not getting. I also don't know too many of them who are earning the $15 or $20 an hour Dr. Ron Sroka of Maryland claims he is working for!

How about you?

Service with a smile and your physician business bottom line

How ready are you to drop being a customer of a business with indifferent or rude employees?

And when last did you actually check on how your answering service, front desk or office staff were behaving towards the patients or clients who are so crucial to your success?

Although this article titled Apathy Will Get You Nowhere primarily references hospital employees, it is not a stretch to see how the principles and ideas apply to any medical practice, or non-medical business. Whether you have one part time receptionist or a staff of 50!

Here is an excerpt from the article:

Hire well. "We want to hire the right employee for the job," Cunningham says. "We focus on interviews and really make sure we have the right person in each position."
Everyone's accountable. Providing excellent care is everyone's responsibility, Cunningham says, including the chief executive. "The buck stops with him. It stops with me, and my managers and supervisors," she says.
Talk to your employees. From 9 to 10 a.m. each day, Cunningham says there are no meetings scheduled at Medical City. That's because hospital leaders-including Berrett himself-are out on the floor, learning how hospital processes work. Executives also host forums quarterly, allowing employees to bring forward concerns. "We're not just talking to them by e-mail, but face-to-face," she says.
Celebrate accomplishments. Medical City's efforts have won it several awards in recent years, Cunningham says, and each one, no matter big or small, is celebrated. "We let people know when we do well," she says. "We let them know so they are proud to work here. When you put that pride into them it just affirms that they're doing good work."

In that vein, please join The Entrepreneurial MD for our September Business Development free teleclass on the topic of "How to provide Amazing Customer Service", with the Amazing Service Guy speaker, trainer and customer service expert Kevin Stirtz. You can sign up here. I know I will be focusing intently on what he has to say!

Dr. Knope responds!

The topic of Concierge Medicine always seems to spark a significant flood of comments and questions here at The Entrepreneurial MD Blog. The latest questions came in a couple of days ago in response to my podcast interview with Dr. Steven Knope.

"Dr. Knope,

• If you "Opt out" of Medicare and do not use a Medicare number, can you still hold privileges in a hospital?
• Is the concierge physician disenfranchised from the system in any way?
• What kind of care would I need to give up if I "Opt Out?"
• How do you help your patients see a specialist who is on an insurance plan?
• Can your fee apply toward deductibles that insurance plans charge patients?"

Steve was kind enough to respond and I thought these helpful enough to share with all of you who are interested:

1)  Yes, I hold hospital privileges and I've opted out of Medicare. I still can order any test on a Medicare-aged patient.  The only thing I cannot do is bill Medicare for any of my services.

2)  There are attempts to disenfranchise concierge docs by the third parties (as you will see in a big, upcoming story that will break this week.)  However, since we run independent practices, they cannot harm us. 

3)  You don't have to give up any care if you opt out.  The only thing you are changing is your billing practices.  You bill you patient directly for your services.  Nothing else changes.

4)  If you see someone on a third-party plan, you are simply an "out-of-network" physician.  The patient again pays you for your services directly.  You can still refer your patient to a specialist.  If that specialist is on their plan, the plan pays for the specialist's visit.  If not, the patient can pay an out-of-network rate for that specialist, just as they would do in a traditional insurance plan.

5)  The fees of the concierge doctor do not apply to an insurance plan's deductible, because again, you are out-of-network.

Everything I've said above applies to the kind of practice that I operate, which is a retainer practice.  I don't bill Medicare or insurance companies for concierge patients because I'm off the grid. There are some concierge doctors who accept third-parties as partial payment of their services, typically with a lower retainer.  In this case, you can bill third-parties and/or Medicare.  For further discussion on the different forms of Concierge Medicine, see my book.

And here is one more resource that I scan daily  -- it's a listserv discussion board for physicians with Ideal Medical Practices (IMPs) who are asking and answering exactly those questions: http://health.groups.yahoo.com/group/Practiceimprovement1/
They are very active, helpful and generous with their resources!

Create a healthy practice: check on your patients' health

Homeostasis, as well as the need for change, are best regulated by effective and sensitive ongoing feedback loops.

Running a business or practice is no different. If you need to make optimizing adjustments in your business or practice environment, those are best guided by the continuous input of the end users (patients) as well as the intermediaries (staff).

It isn't easy picking the right tool to get the feedback that is useful and meaningful and actionable.

The online HowsYourHealth feedback survey, developed at Dartmouth Medical School, is one that has been tested extensively in practice to evaluate quality of care for the "whole patient".

Instead of focusing merely on metrics such as BP, cholesterol levels and HgbA1C, this survey tool probes for ease of access, delays in being able to get care, time spent waiting in the office, financial concerns, problems with pain, emotional issues and likelihood of future health problems.

More subtle information comes in the form of whether patients have all the information they need to manage their own health, as well as having the confidence to actually use the information provided (self-efficacy).

Where this information proves useful is that a well-informed, self-efficacious patient has been shown over and over to have better health outcomes, such as fewer sick days, fewer episode of ER care, and improved bio-metrics (the BP, cholesterol and HgbA1C I mentioned above!).

How reliable is patient self-reporting? you may ask.

Well, here's what the website has to say:

"Is Self-Report Information Reliable?

Several studies compare medical records with patient report for preventive interventions (such as mammograms, bowel cancer screening, immunizations) and generally find 80% or greater agreement."

Costing $200 for up to 3000 users per office or practice passcode (that you distribute to your patients), this seems a modest fee for invaluable strategic information to help you tailor your practice to meet the needs AND provide excellent care. After all, the best businesses provide services and products that almost exactly match the customer's perceived or as yet unrecognized need!

Isn't it time you found out exactly how to push your practice to the top of the competitive heap, by discovering where you could make significant improvements in medical care and customer service?

Medical practice websites -- the good, the bad and the expensive.

I got back from France last night, only to wake up this morning to re-entry challenges!

It is surprisingly painful after this trip to transition from pure alpine tranquility and mindless "what's for lunch in an hour?" thinking to a back-at-the-desk-for-business attitude. Even though I love my work!

I discovered that I love the "beingness" a full two weeks away permits every bit as much as the stimulation of my work.

Okay, confession over - now let me blog briefly.

Since I have a website that works well for my business, it is glib and simplistic for me to argue that a website is good for a medical practice.

Instead, read what Dr Benjamin Brewer, correspondent for the online Wall Street Journal, has to say, writing from the experience of his own practice.

The larger point at stake can be summed up in Dr. Brewer's words:

"In retrospect, I should have surveyed my patients before I spent money on a secure email platform and state-of-the-art software for electronic consults."

Making strategic decisions such as what technology to use, and taking marketing actions such as creating a website, are best guided by knowing your target market.

And it isn't enough to know a little about them, and then speculate about the rest. It's important to truly understand their likes, preferences, whims, and habits. Only then, will you be able to avoid investing in expensive websites that patients don't use. And opt instead for implementing those services and technologies that produce a positive return on investment!

PS.

Here is a photo of the view from the dining room in my brother's restored farm house, just to give you a hint of what my spirit is already missing!