By Neil Chesanow | January 09, 2014
Is It Ethical to Let Patients Go?
For many doctors, a full concierge practice presents a moral dilemma. First you create a special class of patients who receive better treatment than everyone else because they can afford to pay for it. Then those who can’t afford or don’t want to pay the annual fee must leave the practice at a time when primary care doctors are in short supply and the healthcare marketplace is about to be flooded with newly insured entrants courtesy of the Affordable Care Act.
LaGrelius, who reduced his panel by well over 50%, doesn’t see it that way.
“I take care of a lot of very complicated patients,” he says. “The interesting thing about those who joined my concierge practice is that they were the most complex patients in my conventional practice — the ones who had the most need of care. And the new patients who joined my practice are incredibly complex.”
“Being the only boarded geriatrics specialist in the community who is in private practice, I got a lot of very complicated seniors with 25-30 medical problems and who are on a lot of medications. We keep them out of the hospital and we keep them well. I don’t think that would happen in any other setting. We’re making a huge difference in these people’s lives and saving a ton of money.”
Some of his traditional patients chose not to join the new practice because they felt they didn’t need more care. Others needed it but didn’t want it.
“I remember one patient,” LaGrelius recalls. “He called me up and said, ‘I don’t want you to do this, because I just want to come in and see you when I’m sick.’ I said, ‘George, the last time I saw you was 5 years ago, and I put you in the hospital when you had lobar pneumonia that nearly killed you. You didn’t come back for follow-up or get your pneumonia vaccine. I don’t do that anymore. I want to take care of people who want optimal care and whose care is optimized. I can only do that with a few hundred patients if I’m going to take care of patients who are complex and difficult, which is what I like to do.'”
George didn’t join the new practice.
“Every one of my patients who left the practice was connected with another primary care doctor if they wanted help connecting,” LaGrelius says. “No one who failed to make a decision on whether to join the practice was ever turned away. If they got sick, I took care of them until they were over that illness, and then transitioned them into membership in the practice or to some other physician. That’s the obligation of any doctor: to make sure their patients are cared for.”
Moreover, patients who wanted to join the new practice but couldn’t afford the annual fee received “scholarships” in which the fee was waived.
“A lot of patients are scholarship patients,” LaGrelius says. “I made it clear to my patients when I transitioned that if they truly couldn’t afford the practice, all they had to do is explain that to me and they would be admitted free. I still take scholarship patients who are referred to me by other people in the practice.”
“We insist that our doctors reserve about 10% of their membership for scholarship patients, plus another percentage of patients whom we encourage them to discount — usually by 50%,” Roberta Greenspan says. “Additionally, we set up a fee structure for our clients that always includes an ‘adult couple’ discount and frequently includes a lower annual fee for younger patients — usually under age 40 or 45, depending on the makeup of the practice.”
A More Comfortable and Relaxed Lifestyle
In his new practice, renamed Skypark Preferred Family Care, instead of seeing 25 patients a day, LaGrelius now sees an average of 15 patients.
“I do 2-4 comprehensive wellness exams a day,” he says. “They take at least an hour. Some patients are there for a couple of hours. Then each of them gets a follow-up visit a couple of weeks later when we go over a care plan, and that takes a half-hour. Office visits are a half-hour long. That’s pretty much minimum.”
“Office visits are comfortable and relaxed,” LaGrelius says. “I’ve got 4 people here passing out coffee and fresh-baked cookies and waffles and warm blankets, and smiling and being helpful to everyone.”
In the office, in the few moments that patients wait for LaGrelius to appear, they sit in what he calls a “non-waiting room” — decorated to look like a cozy living room in a private home. He doesn’t offer special weight-loss clinics, nutrition seminars, or group sessions for patients with chronic conditions; such information is part of the preventive education given one-on-one to each patient, he says.
His patients are like family, LaGrelius says. Most have been with him for years. An avid pilot who owns 2 small planes, he occasionally flies patients to picturesque Catalina Island, a 10-minute flight away, as his guests for lunch and a couple of hours of sightseeing on Wednesday afternoons — his half-day off. He has taken as many as 3 patients at a time — the youngest 10, the oldest 98.
“We talk about whatever they want to talk about,” he says. “These days, it’s hard to avoid talking about the Affordable Care Act. That’s what everyone wants to know about.”
If patients are up for it, he wows them with some aerial maneuvers before heading home. These jaunts are extremely popular, he says, and are booked months in advance.
But what patients are paying for is less about fresh-baked cookies and sightseeing trips and more about enough time with the doctor. “It’s leisurely,” LaGrelius says of patient visits. “The last thing I say when I walk out of a patient’s room is, ‘Are you sure there isn’t anything else you want to talk about?’ It’s never one problem at a time and I have to go like most practices are running these days. I’m virtually never behind now. Even with an occasional emergency, the practice runs very smoothly.”
His biggest complaint: Despite having both his cell phone and home phone numbers and carte blanche to use them, his patients don’t call him enough.
He wishes they would be a tad less respectful. “‘Why are you reluctant to call me when something goes wrong?'” he asks patients in frustration. “‘Why do I see you 2 days later and you’ve taken care of that cut badly? I want you to call me when something happens.'”
“People pour peroxide in their wounds without calling me!” he exclaims in exasperation. “Not smart. I’d rather have them call me when the problem occurs — immediately, whatever time of day or night it is — so I can deal with it and not have to deal with the complications of how they managed it wrong.”
Practice Fees and Revenues
To be a member of Skypark Preferred Family Care, patients 18-45 years old pay $1050 a year, those 46 and over pay $2100, adult couples pay $3000, single parents pay $2300, and families pay $4200.
With a panel of 600 patients, some of whom are nonpaying members, “I’m probably earning 50% more than I was in the previous practice,” LaGrelius says.
“I’m working just as hard,” he adds, “but I’m working differently. Back in the old days, there was a line in my waiting room. Now my waiting room is empty.”
He estimates that 80% of his revenue now comes from annual fees.
This is as it should be for a full concierge model to succeed financially, says Roberta Greenspan of Specialdocs. Nevertheless, some clients are disconcerted to discover that only a relatively small portion of the revenue in a full concierge practice, even one that takes commercial insurance and Medicare, is derived from copays and reimbursements, as it was in a conventional practice.
“Physicians need to switch mental gears from depending on office visit fee collections as the majority of their revenue stream to recognizing that in a transitioned practice, the majority of their revenue stream is derived from annual fees,” Greenspan says. “Generally, 80%-85% of all revenues in a well-transitioned practice should be derived from annual fees.”
But it isn’t just fees that can boost revenues. In a full concierge practice, a patient panel may be reduced by 75% or more. Thus, fewer staffers and less office space are often needed. Downsizing both can significantly reduce practice overhead.
“If a physician’s revenues in a traditional solo practice are about $600,000 with an overhead factor of 65%, this results in a practice net of $210,000,” Greenspan says, laying out the math. “By transitioning to a personalized care/concierge model, even if revenues remain the same but the overhead factor is reduced to, say, 55%, this will result in a practice net of $270,000, a significant increase.”
Well and good, but concierge physicians tend to have an independent streak, even when they hire experts to advise them. LaGrelius is one of them. His staff all spent many years with the practice; he had no intention of letting any of them go, even though it might have improved his profit picture. He had 4 staffers when he saw a panel of 1500 patients. He still has 4 staffers.
“I promised my staff that they would have better lives, better working conditions, they would all get raises, and none of them would be let go,” he says.
With 900 fewer patients, they still have enough to do?
“Oh, they’re busy,” LaGrelius says, “but in a very happy, cheerful, relaxed way. They’re not running around like chickens with their heads cut off. They are busy but never rushed.”
Source: Concierge Practices Even for Doctors Who Don’t Like the Idea. Medscape. Jan 09, 2014. http://www.medscape.com/viewarticle/818644