By Michael Tetreault, Editor
OCT 1, 2014 – Priscilla in Ohio is searching for a more affordable, accessible healthcare option and tells Concierge Medicine Today “Not often does one have the opportunity to have this kind of doctor that you feel is affordable and a real part of your life.”
She’s not alone either. It’s open enrollment time, the autumn period when many people with employer-based health insurance re-up for another year of health insurance.
While most news reports are focused on the problems with healthcare.gov and the online health marketplaces launched in October 2013, a growing number of people have found another option.
4 Key Things You Need To Know Before Open Enrollment
“I’m a self-pay patient,” said Eric in Millersport, OH. “Apparently, the modern health care business model no longer knows what to do with people like me. I’m a person, not a set of billing codes. I shouldn’t have to deal with 4 separate bills from one trip to the Doctor. I shouldn’t have to jump through hoops to find out what my lab work is going to cost just so that I can pay for it on the same day I get the work done. My medical care should be between me and my doctor. I see no reason why there need to be a half dozen corporate bureaucrats involved. I think you get the drift.”
Initially such “highly cost medicine” came at a very high price, ranging upwards of $5,000 to $10,000 per patient per year. Today, over 62% of the fees touted by direct-pay or concierge medicine doctors cost patients less than $135 per month, according to Concierge Medicine Today’s research arm, The Collective.
Call it “boutique care” or “direct primary care”, but it’s best known as concierge care. Generally, patients pay a monthly fee like a gym membership. And what do they get? A physical, and 24/7 access to their doctor.
Starting in October 2014, CMT reports that this will kick-off the most significant month in the industry’s growth, a Tipping Point. Most people sign-up in January through March of each year as well as in January of each year for concierge medicine membership programs, reports CMT. Now offered by over 12,000 physicians across the U.S. and growing, finding a physician in your local area will be important.
What Is Concierge Medicine?
Concierge Medicine is a new form of membership medicine in which doctors provide patients with 24/7 access, a cell phone number to connect directly with their physician, same-day appointments, visits that last as long as it takes to address your needs and varying other amenities. In exchange for this enhanced access and personal attention, your concierge doctor will receive a retainer fee (most fees are under $135/mo., Source: The Collective, 2014) which enables them to increase the amount of time they spend with you each year, no matter if you’re calling with the flu or on your way to the hospital because of a serious car accident.
“We are a family of mom, dad, and 10 year old daughter,” says a mother in Marietta, GA. “Dad’s retirement from his job means leaving his insurance plan. We are healthy and looking for affordable Direct-Pay Medical Care or Concierge Care.”
A concierge doctor becomes your singular source for all things medical. Essentially, your very own physician becomes a trusted friend, advocate and is fully prepared to help you navigate the complex healthcare system. In the event of emergencies, hospital care is closely monitored, and specialists are personally briefed and debriefed by your physician.
“Even if you have insurance, you still don’t have access to care,” says Dr. Chris Ewin or 121MD in Dallas/Fort Worth, TX. “You can have all the insurance you want. You still can’t get in to see the doctor.”
Which is why thousands of people are now searching feverishly for a concierge doctor or a direct-pay physician and finding that out-of-pocket costs to this type of doctors can actually save them thousands of dollars a year. At the same time, they have their doctor’s cell phone on speed dial.
Direct-Pay Clinics take cue from retail with more customer focus
As the healthcare system prepares to cope with an influx of 30 million Americans who will have health coverage as a result of the Affordable Care Act, a surging market of direct primary care (DPC) and retail clinics are poised to take on a wider role to relieve the bottleneck.
“Instead of viewing the status quo PCP model as the center of the universe,” says Dr. Nelson, “maybe we should take some plays from the Retail Clinic playbook before we become obsolete.”
What Is Direct Primary Care?
Direct Primary Care (DPC) clinics or direct-pay doctors, similiar to their predecessor, concierge medicine, is where patients go for check-ups, vaccinations, sprained ankles, or frequent headaches. Patients pay one low monthly fee-sometimes as low as $49-directly to their direct primary care facility for all of their everyday health needs. Like a health club membership, this fee (avg. $50-$99/indiv.) provides patients with unrestricted access to visits and care, and patients can use the services as much or as little as they want. Many direct primary care practices are open seven days per week and offer same-day or next-day appointments. At many clinics, physicians are on call 24/7.
“This primary care business model [DPC] gives these type of providers the time to deliver more personalized care to their patients and pursue a comprehensive medical home approach,” said a spokesperson at Qliance Medical Management based in Seattle, Washington. “One in which the provider’s incentives are fully aligned with the patient’s incentives.”
With DPC, there are no insurance co-pays, deductibles or co-insurance fees. DPC doctors do not typically accept insurance payments, thus avoiding the overhead and complexity of maintaining relationships with insurers, which can consume as much as $0.40 of each medical dollar spent.
DPC practices typically have monthly membership fees under $100 and serve a population of households earning $70,000 or less, according to The Collective. Monthly concierge medicine membership fees usually are slightly higher, about $135 or less per month and can include more in-office services. Despite this advantage, the DPC model may be hampered by low awareness among health plans and primary care physicians, resistance from some insurers, and resistance from competing hospitals and specialists.
In a report published by the California HealthCare Foundation, five large DPC clinics in the U.S. who use a DPC healthcare service model serve over 500,000 lives either via direct fees paid to the doctor, the physicians practice, or via self-insured employers and health plans, such as White Glove Health.
Overall, concierge medicine and direct primary care is thriving in major metropolitan markets and prices are dropping dramatically due to increasing competition among physicians entering the marketplace, retail medicine pricing, price transparency demand from patients and uncertainty about the implications of the Affordable Care Act.
Future of Primary Care Is In Accessibility and Price Transparency.
More health technology companies are beginning to provide these kinds of solutions to doctors: ZocDoc enables online appointment booking and checkins and Ringadoc supports on-demand video and phone calls with doctors.
One Medical Group, a San Francisco-based medical practice aiming to use technology to bring concierge-style medicine has raised $30 million in a round lead by Google Ventures.
Startups offer all sorts of digital health products and services but One Medical Group is using health technology to power an entire health care practice. On Friday, the company said it had raised $30 million in a Series F round that brings its total amount raised to $77 million.
Google Ventures led the round and previous investors, Benchmark Capital, DAG Ventures, Oak Investment Partners and Maverick Capital, also participated.
Founded in 2005 by MD-turned-MBA, Dr. Tom Lee, One Medical Group aims to bring “concierge”-style medicine to the masses. In addition to more personalized care and same-day visits, patients can book appointments, renew prescriptions, check lab results and see their medical records online, as well as exchange email with their doctors.
“We’re trying to make health care work and we think we can do that by building a stronger system… and using technology that lets doctors interact thoughtfully with patients to manage their health,” said Lee.
According to The Arizona Republic, serial entrepreneur and Massage Envy chain founder John Leonesio wasn’t happy with just taking massage from a snooty, snobby thing and democratizing it for everybody. Now he wants to do the same for chiropractic. In his latest creation: The Joint…The Chiropractic Place. The Joint has agreements to open in 17 states and the plan is to have 1,000 Joint franchises open over the next 10 years.
Leonesio wants to run a very low cost operation that is cash only, no insurance accepted. Locations will have long hours like a retailer. And there are no appointments, you walk in and get seen, very similar to those haircut chain operations.
The Joint will have a $49/month membership that offers four monthly adjustments. If you don’t want to commit, you can walk in off the street and pay $19 for an exam and adjustment. The idea is to get you in the door and hopefully build customer loyalty.
Dr. Samir Qamar, MedLion’s founder and CEO, explains, “As primary care physicians look for ways to enjoy private practice again, Direct Primary Care (DPC) keeps coming up. DPC allows employers and consumers to enjoy high quality primary care at a fraction of the cost of insurance-based models, with a strong focus on customer service and preventive medicine. For this reason, MedLion is growing around the country also. With practices being prepared and/or operational in several cities, including: Las Vegas; Philadelphia; Los Angeles; Denver; Phoenix; and Sacramento.
With the industry’s inclusion in the Affordable Care Act, DPC has already shown to be a strong solution for small- and medium-size businesses, as well as individuals who have been frozen out of the healthcare market by current pricing trends. In addition, the MedLion program benefits companies by lowering workman’s compensation premiums.
“Our approach to primary medical care and strong, cost-controlling application of occupational and workman’s compensation is a dramatic step for companies. When employers enroll their employees in our MedLion program we can substantially drive down their year-end workman’s comp costs,” says Dr. Marcus Williams, who joined MedLion inside their first Pennsylvania DPC practice.
Some folks in the health care field are opposed to franchising any branch of medical care. However, we have an era coming with more innovation in health care delivery in our country than we’ve had in a generation. The way health care is delivered will radically change and the focus will be on you, the customer.’
What is the point where direct primary and concierge medicine ends and insured care begins?
Patients who are under the care of a concierge medicine physician or DPC doctor are encouraged to be insured by a PPO, Medicare or a major medical plan. This allows for coverage of services provided outside of your doctor’s office, such as catastrophic accidents, labs, radiology studies, specialty care and hospitalization. Concierge medicine and care administered under the practice of a DPC clinic or physician are in no way considered pre-paid medical care. It’s also important to recognize that concierge medicine or a fee paid to a DPC clinic or doctor is not considered in any way a type of insurance coverage, company or product. Payment to a these types of doctors or clinics in the form of a retainer or membership fee entitles patients to office-based services and telephone conferences if needed.
Dr. Qamar says “In paying directly for care, the line is drawn when the consumer can no longer afford to pay for services, usually after basic primary care services. Direct primary care can offer affordable provider visits, labs, imaging, and medicine. Care beyond primary care is where insurance comes in handy. Examples are hospitalizations, surgical procedures, and specialist care.”
Most, approximately 80% of concierge doctor’s offices according to Concierge Medicine Today, participate in Medicare or various PPO insurance plans, Medicare and other private insurances do not cover the annual fee. This is a completely separate fee that you pay directly to your doctor or doctor’s office in return for the enhanced access and other related services. Out-of-office charges and services provided by specialists and hospitalization expenses are billed directly to your insurance company or Medicare. Many concierge doctor’s offices will bill your insurance company or Medicare for services outside of the service contract your physician gives you when you sign up and pay your fee.
How does Direct Primary Care and Concierge Medicine work with High Deductible Health Plans and Health Savings Accounts?
HSAs complement DPC and concierge medicine and clinics in a variety of ways.
Sue who works inside a concierge medicine clinic in Washington State asks, “many of our patients are asking about HSA’s and if they can use those funds to pay for the monthly fee associated with the practice. We charge a monthly fee and do not bill insurance, nor can the patient submit for reimbursement. The fee covers any and all expenses in the office. Can you give me some information or advice to pass on to our patients?”
Roy Ramthun of HSA Consulting Services based in Washington, DC, says “The IRS does not generally consider the monthly payment a ‘qualified medical expense.’ However, we do believe that they will accept reimbursements from an HSA for actual services provided by your practice physicians if you can produce something for the patient that they can use to document the services they received (including any procedure/treatment codes), the date they were provided (and by whom), and the amount you would charge the patient for the services provided. I know your practice is not set up that way, but the patient needs something that tells them the fair market value of the services they received for tax-free reimbursement from their HSA.”
Second, the high deductible coverage from the HSA provides catastrophic protection against large or unexpected medical bills. The DPC or concierge medicine relationship with your physician will take care of your routine medical needs and preventive care. The money you save on premiums for your HSA-qualified plan will help you fund your HSA account and/or pay your annual concierge medicine practice fees.
In addition, the HSA account can be used to reimburse yourself part of the cost of your concierge medical services. While you cannot pay your entire annual DPC or concierge medicine practice fee with your HSA funds without penalty, you can use your HSA funds tax-free to pay for individual medical services that you receive from your concierge physician. This requires your physician to generate a “fee-for-service” bill indicating the type of medical care you received (with appropriate codes), the date, location, and the amount the physician would normally charge for the medical care you received. This is the amount you can withdraw tax-free from your HSA account. Over time, these withdrawals will help you reimburse the annual cost of your concierge medical services. Remember, reimbursement is not required if you would prefer to save your money for future needs.
“Direct Primary Care can complement High Deductible Health Plans (HDHPs), taking care of the primary care component of health care,” adds Dr. Qamar. “HDHPs, or major medical plans, can take care of catastrophes. This combination can result in significant savings overall. Health Savings Accounts (HSAs), when structured properly with Direct Primary Care plans, can also be used. The key is working with a Direct Primary Care company, like MedLion, that has unquestionable legal and insurance knowledge.”
Working With Employer Plans.
Both DPC and concierge medical care provided by a clinic or physician is not comprehensive, and these types of practices often recommend that their members obtain a high-deductible wraparound policy to cover emergencies and catastrophic events.
Some efforts are underway to combine changes in plan design with the DPC purchasing methodology. To date, two insurance carriers have tailored offerings to DPC-based patients — Cigna and Associated Mutual. Cigna has paired its “Level Pay” program targeting self-insured employers with 50 to 250 employees and is offering this only to Qliance customers so far.
Erika Bliss, M.D., of Seattle, has been immersed in the DPC model since 2006. She’s one of the founders of Qliance Medical Management, and now, as president and CEO, she oversees a network of DPC clinics in the state that benefited from millions of dollars in start-up funds from private business.
Bliss, an FP who carves out 25 percent of her time for direct patient care, said that the Qliance clinics had grabbed the attention of payers, purchasers and the government. “Large purchasers of health care (corporations) are saying ‘This makes sense — you work hard on things that matter, not cranking out a bunch of visits and billing for them.'”
Insurers recognize the potential for this model, as well, and some are looking at insurance plans that work with DPC clinics and keep costs and premiums down, said Bliss.
Expedia, Inc., one of the world’s leading online travel companies recently partnered with Qliance, a leading healthcare organization operating a network of clinics that provide comprehensive primary and preventative care services, to open an onsite clinic at its Bellevue, Washington headquarters. Now, Expedia, Inc. employees and their dependents have easy access to primary health care services, including Saturday hours. The company hopes this effort will help prevent treatable symptoms from becoming chronic issues and encourage employees to use their sick time and medical benefits when needed. In just the first month of operation, employees and their dependents utilized nearly 300 office visits at the clinic.
“We are really pleased at how much use the clinic has received so far,” said Symes. “It’s great to see that the tools being provided are making health and well-being more convenient and accessible. As an employer, we spend a great deal of time attracting the best and brightest talent and we are equally focused on helping them be active and engaged employees of Expedia, Inc. We have a vested stake in the vitality of our workforce, and so we really can’t afford not to make preventative care a top priority for our employees.”
Sharon, who operates a DPC Clinic on the east coast tells The Direct Primary Care Journal that she’s finding many of her patients are receiving their open enrollment information right now. “It appears to her that DPC fees should be able to be paid from an HSA?” asks Sharon.
Ramthun noted, “No this has never been clarified. Advise patients they cannot deduct or pay their annual fees with HSA dollars or other similar accounts. They should be able to reimburse fees for individual services if the doctor can produce a few-for-service bill.”
Associated Mutual has stated it is offering a wraparound policy but hasn’t announced details yet. Physician Care Direct is working with DPC practices and networks, as well as multiple carriers, to facilitate wider adoption of the DPC model. They expect the combined cost of the DPC wraparound policy and DPC fees to be less than a standard health insurance plan.
DPC doctors and concierge medicine physicians both help keep costs for patients by avoiding unnecessary referrals and by referring mainly to specialists willing to offer significant discounts.
Dr. Robert Nelson of MyDoc in the Atlanta metro area, a DPC doctor, states “If you walk into a Quest or Lab Corp facility the cash price for a routine blood chemistry panel (CMP) will be $62.58 and $46, respectively. I can offer the same exact lab test to my patients for $15 which covers my costs and the time related to clinical follow up as well. This shows the power of free-market leverage when you get out from under the third-party payment model. The good news is that these direct fees paid to direct-pay physicians or discount labs can still be applied towards a deductibles and always go towards total out-of-pocket expenses for the year.”
CNNMoney reports “By cutting out the middleman, [one doctor] said he can get a cholesterol test done for $3, versus the $90 the lab company he works with once billed to insurance carriers. An MRI can be had for $400, compared to a typical billed rate of $2,000 or more.”
Interestingly, this is all happening at a time when the rise of health care costs has gone into pause.
“I have noticed that any patient that comes in as a “cash pay” will always pay less than what a hospital or imaging center is billing the insurance for the same test. Also, remember, that some tests ordered are not typically covered by insurance (like a coronary CT) so, cash prices are extraordinarily important for these scenarios,” said Dr. Tiffany Sizemore-Ruiz, a concierge doctor in the Miami/Fort Lauderdale Area.
The actual cost of medical care fell for first time since Gerald R. Ford was president of the United States.
‘I can get much cheaper prices for my patients. My PSA’s are $30.00 and Lipids $15.00…and that is with a mark-up. General Health Screens (CBC, Thyroid, Liver Kidney and glucose tests) are $35 at my office. Next door at the lab, GHS SOT is greater than $200 and Lipids are higher than $100.”
So what’s behind the slowdown in health care spending?
Clark Howard writes, ‘First, employers are switching to high deductible health plans where you’re responsible for so many thousands of dollars upfront before the company picks up the tab. When that happens, you start to treat health care like a consumer and become more cost conscious. Second, generic drugs are on the rise, which keeps the cost of health care down.’
Bob Adelmann wrote in The New American, ‘Naturally the insurance industry isn’t too happy about it, but at present there’s little they can do. For the moment, “concierge” medicine and its more modest iteration, “direct pay” medicine, is increasingly being seen by patients and doctors alike as a way out of the maze of medical practice requirements caused by government intervention in what used to be a simple transaction: a private matter between a doctor and his patient.’
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