By Michael Tetreault, Editor-In-Chief
FEBRUARY 18, 2014 — Lock-in your doc now … if you can find one, say sources close to Concierge Medicine Today, industry news agency and trade journal for the direct-pay healthcare marketplace.
The Concierge Medicine Research Collective (The Collective), the research arm of trade publication, Concierge Medicine Today, released a statement earlier this week stating that they have found that the number of patients seeking “concierge medicine” and “direct-pay” healthcare practitioners is far greater than the actual number of “concierge” primary care and “direct-pay” family practice doctors available to serve them.
“Despite what we hear in the media about the increase in concierge and private-pay physicians growing across America, there are simply not enough of these [concierge-style, direct care or membership medicine-style] physicians in the U.S. to meet the current demand,” says one concierge doctor in Dallas, TX.
Concierge Medicine Today reports that of the estimated 5,500 concierge practices nationwide, about two-thirds charge less than $135 a month on average, up from 49% three years ago, and as sited in recent stories appearing in The Wall Street Journal, Fox News and The New York Times earlier in 2014. We believe the growth rate will be around 15% due to the Affordable Care Act (ACA). Although this is simply our analysis and the conclusion of many physicians and industry experts, we have certainly seen an increase in physician interest to support it.
Furthermore, Concierge Medicine Today reports that it is extremely difficult to find a concierge or cash-only physician in rural areas such as: Idaho; North Dakota; South Dakota; Louisiana; Mississippi and others. Oftentimes, less than half-a-dozen practitioners serve an entire state.
“Direct practices should be successful in most cities and states where there is an inadequate supply of primary care physicians,” says Dr. Chris Ewin, Founder and physician at 121MD in Fort Worth, TX. “This may be true in the country with the correct practice model. Most important, a physician needs to have social skills to sell him/herself and there new practice model to their patients and their community.”
“It’s about believability. Would it work for me? Could it work for me?” says Richard Doughty, CEO of Cypress Concierge Medicine, a Louisiana-based company helping doctors move into this industry. “Where physicians have taken an early leap of faith, if you build it they will come, overwhelmingly they have been satisfied. As a result, physicians now have many examples of colleagues experiencing the benefits of concierge medicine for themselves and their patients. In those areas, we see momentum continuing to build.”
What About The Doctor Shortage We Keep Hearing About … Will Concierge Medicine Really Make It Worse?
Simply answered, no;
The numbers of practicing concierge medicine and direct-pay doctors doesn’t matchup to media reports. First, in 2013, a national survey of physicians that Merritt Hawkins (*1) recently completed on behalf of The Physicians Foundation sheds some light on this question. The survey garnered responses from some 14,000 physicians, who revealed a wide range of information regarding their morale, practice metrics and practice plans. Physicians were asked what changes they plan to make in their practices over the next one to three years. Close to seven percent of all primary care physicians indicated they plan to switch to a concierge practice.
Now, let’s look at the math. Most people either don’t understand or are not aware that 85% of the concierge doctor’s offices operating today in the U.S. treat 600 “concierge medicine” patients but also have an insurance side [approx. 1,900 patients on avg.] to their practice as well. Meaning, most concierge doctors accept and continue to participate in their HMO, PPO and managed care insurance contracts long after they have announced to a local community that they now offer a concierge medicine membership program to allow “more access to the doctor.”
Editor-In-Chief, Michael Tetreault | The DPC Journal, ConciergeMedicineToday.com
Where patient abandonment discussions along with moral and ethical issues typically arise is when the doctor discontinues all insurance relationships in his/her practice and simply charges a cash fee for his/her services, thereby releasing 1,900 patients from the practice.
Understanding the insured component of a true concierge medicine practice, 2,500 patients do not typically leave the practice because a doctor isn’t able to treat them or keep them as part of his/her practice. Conservatively estimating that most traditional [non-concierge] primary care and family physicians have a patient panel of 2,500 patients. Let’s say 6.9% of 13,575 doctors convert to concierge medicine. This equates to about 950 doctors out of 13,575 transitioning their practice business model to concierge medicine. Thereby leaving 13,050 doctors to serve a population of roughly the same amount of insured patients.
Where is the shortage?
If research says only 15% of concierge doctors do not participate in insurance, that means that 15% of 950 doctors will provide cash-only services to a patient base of roughly 600 patients each. Backing into the math, that means 143 [15% of 950 doctors] doctors will treat about 600 patients each equating to a serviced patient population of 85,800 [143 x 600]. If each of the 143 doctors had 2,500 patients, that means 271,700 patients no longer have a doctor that will accept insurance. Divide this patient population number [271,700] by the amount of doctors left who are still accepting insurance and choose to not participate in a concierge medicine practice whatsoever [13,050], that means each of the 13,050 doctor’s offices have the opportunity to welcome about 20 new patients into their practice. (5*)
Obviously the challenges are greater in rural or under-served areas. However, in the cities where concierge medicine is gaining ground, there should be enough physicians to service the patient-population seeking care.
The Merritt Hawkins data also states … it’s interesting to note here that physician practice “owners” are more likely to embrace concierge medicine than other types of physicians, presumably because they have an entrepreneurial mindset.
It is also important to mention that there are conflicting numbers regarding the actual growth each year of concierge medicine and private-pay healthcare offices touted by industry sources and media outlets. To date, key physician leaders in the industry tell Concierge Medicine Today that most crucial data compiled about this industry’s growth has come from The Merritt Hawkins Study, MDVIP and The Concierge Medicine Research Collective.
Concierge Medicine Today reported early in 2013 that there are currently four states that have a huge lead in the number of active concierge or private-pay physicians in practice as well as patients seeking their care. Florida, California, Pennsylvania and Virginia each have a significant number of people [most over age 50] seeking out concierge doctors and there is, fortunately, a sizeable number of concierge physicians to serve them. According to Dan Hecht, MDVIP has a high physician retention rate and the number of physicians who have left the MDVIP network over twelve years is very small. 2*
In late 2012, Concierge Medicine Today published a report from MDVIP and the American Journal of Managed Care. They stated that patients under the care of MDVIP-affiliated primary care physicians experience a dramatic decrease in hospitalizations versus comparable non-MDVIP patients, according to the study profiled in an article published in the peer-reviewed The American Journal of Managed Care (December 2012). This first-ever, published study done on hospital utilization in the MDVIP personalized healthcare model found a 79% reduction in hospital admissions for Medicare patients and a 72% decrease for those with commercial insurance between the ages of 35-64 in MDVIP-affiliated practices. As a result, MDVIP, the largest national network of primary care physicians, delivered to the healthcare system a one-year savings in excess of $300 million. 3*
The study also found decreased MDVIP hospital readmission rates for Medicare members when compared to the 2009 readmission rates for non-MDVIP Medicare patients, for such conditions as acute MI (heart attack), CHF (congestive heart failure) and pneumonia. MDVIP readmission rates are below 2% for these conditions compared to the national averages that range from a low of 16% to a high of 24%. 4*
While the debate continues whether concierge medicine will exacerbate the doctor shortage, we can see that there is actually a proven, viable history that these types of healthcare practitioners are showing that primary care can be saved. I am sure this argument will keep the media and nay-sayers busy for the next couple of years. However, the marketplace consumer is the one who is showing all of us that we are a long way from seeing a concierge doctor in every neighborhood. We do need them and we need more of them.
Sources:
1* http://www.merritthawkins.com/clients/BlogPostDetail.aspx?PostId=39491
4* http://www.reuters.com/article/2013/01/03/fl-mdvip-idUSnBw47Tk91a+110+BSW20130103
5* http://www.ConciergeMedicineToday.com
