“There is a big difference between being expected to do something and being invited to try something. Inside traditional medicine, patients expect to wait. They expect insurance to cover their visit. When it is not, they expect a fight. Patients today say they expect a disengaged physician and staff and an unpleasant visit when at their doctor’s office. We can do better. Concierge Medicine Patients are Invited rather than Expected. This counterintuitive approach creates a massively loyal and engaged audience. Other subscription-based business models [e.g. Costco, Amazon Prime, etc.] apply this same approach. Here’s what we can learn from them …” ~Editor
By Michael Tetreault, Editor-in-Chief
It’s a powerful thing to see physicians step into their dreams.
For the past 20-years Concierge Medicine has created a loyal and growing following of patients who subscribe to the creative and relational dynamic that their physicians choose to deploy. In essence, many physicians have found the work they love. Notice we used the word choose, however.
You might be surprised to learn that in both Concierge Medicine and its sister model, Direct Primary Care, that many physicians considered quitting medicine altogether. For example …
- … In a 2017 DPC Journal poll physicians were asked Prior To Opening Your “DPC” Practice (ie Cash-Only), Had You considered Entering Another Career Field Outside of Medicine Altogether?
- Answer: Over 37% of DPC Physician respondents said ‘Yes!’
- … In a similar poll by Concierge Medicine Today, physicians were asked Prior To Opening Your “Concierge Medicine” Practice, Had You Considered Entering Another Career Field Outside of Medicine Altogether?
- Answer: Nearly 60% of Concierge Medicine Physician respondents said ‘Yes!’
In a recent physician workforce stress and burnout survey, one physician wrote to us just this week …
“Working 10-12 hours daily. I am the transcriptionist, the billing clerk, and the Doctor (plus reviewing labs, XRays, giving orders, etc.) I am frustrated being bossed around by people who don’t know anything about medicine. The quantity over quality is damaging all of us. I became a Physician for a higher calling, and may loose my career entirely at this point. Something is very wrong in a system where electronic records are more important than the highly trained minds forced to use them.”
In a recent interview with a Concierge Physician from New York, she says “the truth is, sometimes patients and physicians simply get what they are given. They receive an inherited experience. They change their business model and throw some new paint on the wall and expect people to change [their attitude]. There is nothing new, nothing innovative and nothing creative.”
More than that, physicians now have taken on the mantle of responsibility to change an outdated process and make it better.
“The Independent FFS is disappearing,” says Bill Cossart, CEO of MedFirst Partners, LLC. “Most are selling out to Hospitals and many then regret it. I am still surprised that some are not aware of the option to open a membership medicine practice.”
Imagine what it would be like for patients to come to a doctors office ready to participate and engage with their doctor as a trusted advisor and friend. We see a Concierge Medicine Physician display their best when they prioritize and are intentional about the communications they have with their patients both inside and outside of the practice.
“The idea was that doctors could have a smaller census of patients who required more attention and were willing to pay a fee to get that attention,” says Dr. Steven E. Reznick, who owns a concierge practice in Boca Raton.
Therein lies the first reason we have observed that Physicians have subscription fees.
1) The fee motivates people to take action.
Historically, businesses with subscription-based revenue models have been massively successful at building loyal followings, in part because they created environments around routine relationship and matched expectations.
“There was a time when patients valued their family doctor, trusted our opinion and called us after hours to help decide if symptoms needed urgent attention or could wait,” says Dr. Ellie Campbell of Campbell Family Medicine in Cumming, GA in an interview with Concierge Medicine Today. “Our phone trees, answering services, and after hours call-sharing doctors make it unlikely that any given patient will actually speak to their own doctor. So they don’t bother, and they seek care wherever it is most convenient.”
Met and exceeded expectations can make or break a Concierge Medicine or other subscription-based healthcare model.
Neil Chesanow with Medscape writes … Only a fraction of your traditional patients will typically join you in a retainer medicine practice, experts caution. It’s not unusual for a traditional primary care practice with 5000 patients to have trouble attracting the 300-600 patients needed for a full concierge practice, or the 1000 or so patients needed for a full direct primary care practice. Doctors who open with half-full practices court financial collapse. “Unrealistic expectations are what I hear in many doctors’ comments,” Tetreault reports. “Doctors set themselves up for hard times over the next 12-24 months by underestimating the market. We’ve seen physicians fail because of lack of capital. They think, ‘My patients love me. There’s no way they’re not going to continue to use me after I transition. I’m affordable. How can they not choose this? This is great!’” One family doctor, who left a primary care group practice to open a solo concierge practice in 2003 — without a single patient going in (a restrictive covenant prevented him from taking practice patients with him) — told Medscape that he wiped out his entire savings keeping the practice afloat, and that he finally earned $100,000 in 2012, 9 years after he left traditional practice.
Real Examples of Innovative Subscription-Based Business Models:
Craft Breweries for example, are even starting to engage their local consumers and offering unique value through subscriptions. For only $42 per month, The Craft Beer Club discovers exceptional craft brews from around the country and delivers twelve new beers to your door each month. Every selection is produced by small-production, independent brewers who use only traditional brewing ingredients and time-honored brewing methods. It’s one of the newest ways to enjoy craft beers.
“Patients are feeling the pressure too, and they want an ongoing, trusted relationship with their physician, and in many cases, they are willing to pay for it,” writes Wayne Lipton, CEO of Concierge Choice in a Diagnostic Imaging article in April of 2017 entitled Concierge Medicine Can Save Your Practice. “The continuing constraints being put on large health systems, along with the de-personalization of medicine, make the rebirth of private care inevitable.”
Nurse Practitioners and PAs are adopting these subscription-based service models as well. Indeed, Concierge Medicine has been a catalyst for others to try something different, be innovative and create. Just look at how Direct Primary Care (DPC) has morphed into its own niche as a mass market variant of subscription-based healthcare delivery geared towards Millennials, Gen X-ers and under 50 crowd. Check out Well Being ABQ or Celebrate Primary Care out of Florida.
“Consumers buy what they understand. It has taken years for the industry to educate consumers about the basic components of concierge medicine. Build upon that existing knowledge base and take the time to further educate them on how your practice uses labs, technology and other tools that will elevate their health.” ~Sonja Horner, Healthcare Business Innovator | Outcomes Advocate
For example, Concierge Medicine Today supports Concierge Medicine Doctors in working with pharmacists and pharmacogenomic companies to develop clinical decision support tools that will assist and guide prescribers in the use of pharmacogenomic information. There are a number of offerings in the marketplace with more to come in the years ahead as these tests become more mainstream. Comprehensive screenings with more than 50 well-established pharmacogenomic genes in a single, cost-effective test will be able to provide medically actionable and clinically relevant data, allowing Concierge Physicians and their patients to make more informed and thoughtful treatment decisions. [READ MORE HERE …]
But I digress.
Let’s get back to the topic at-hand. How does the fee motivate people to take action and what are some successful marketplace examples?
Starting from $25 every 2 months, The Artisan Brew Club sends subscribers a pre-made beer each month. Loyal customers actually instead get recipes and ingredients that match their personal beer preferences. Then from there subscribers can go ahead and brew their very own beer.
Julie Robinson, Vice President of Operations at Cypress Concierge Medicine, a healthcare company based out of Nashville, TN specializing in providing direction and support for physicians who have a desire to convert their traditional practice to personalized healthcare says “Concierge Medicine isn’t just for ‘big city’ folks that have a lot of disposable income. Patients all over the country are looking for the type of care a concierge physician offers – more time, individualized proactive care, and an alternative to the less personal, hurried, reactive care that physicians are being forced to provide.”
So in closing, the money’s been spent; best to take advantage of the membership.
Furthermore, the magic is that by paying a fee to access these items, the shopper [e.g. patient] leaves feeling a bit privileged. As long as the price is right, that’s a formula for success that has been proven.
The Pricing Conundrum Inside Membership Medicine
2) Patients are Invited rather than Expected.
Every so often, I recall the words of one of Concierge Medicine’s founding fathers, as we will probably one day title these sentiments …
“I am amazed we have received so much recognition that within a few years an entire field of “concierge” practices emerged nationally,” says Dr. Howard Maron of MD2 (Squared). “Our Practice was designed around this ideology: provide the convenience, accommodation, and best-of-class service you expect from every service provider in your life. The very nature of these relationships necessitates we limit our practice to so few.”
“There is a big difference between being expected to do something and being invited to try something.” ~Editor, CMT
“I wish I could sit down with you and tell you story after story about him [Dr. Michael Monaco of MDVIP], as it’s hard to show the expressions and hear the emotions when putting something in writing. The value that my family has received from being cared for by him in this type of practice has been incredibly significant. I would be writing a book about Dr Monaco with everything he has done for our family. I know if you would come and walk with our walking group, you would get stories and praises about Dr Monaco from them too! Many of them have been with Dr Monaco for years, even before he became a concierge doctor. He understands our life and family dynamics, our stressors and natural supports. He offers encouragements, tips and health care advice on our walks. This is healthcare delivery that is totally patient centered, one on one care with a deep understanding of who we are, what our lives are like, and we are so much healthier for it, mind body and spirit!” ~T., Patient; Not a paid endorsement; Actual Patient.
“Patients are educated, possibly more than ever, as a result of the changes to our healthcare system,” says Richard Doughty, CEO of Cypress Concierge Medicine based in Louisiana. “Patients are looking for answers and options and taking more initiative in their overall health. Following their doctor into Concierge Medicine for many patients is exactly the vehicle that meets their needs. In addition, knowing others who have benefited from that relationship with their Concierge Doctor confirms the value as their doctor makes this change.”
“The conversion process is not an easy one,” said Jeffrey S. Gorodetsky, M.D. of Stuart, FL. “My staff and I are cognizant of the fact that we must consistently communicate the benefits of this choice in care, with the challenge to increase my [memberships] numbers and convert other patients.”
In an article written in TIME (January 2016), they noted that … For Amazon, the astonishing growth of Prime is a tremendous win-win. Amazon benefits double with Prime because 1) it collects annual subscription fees from tens of millions of consumers; and 2) subscribers tend to spend a disproportionately high amount of money with Amazon compared to non-members. A year ago, a CIRP report estimated that the average Prime member spent $1,500 annually at Amazon, versus $625 for nonmembers. That’s a huge gap, giving credence to the theory that perhaps the biggest accomplishment of Prime is that once subscribers are hooked, they more or less stop shopping everywhere else. [See Cited Sources Below for Reference]
Numerous critics for years say the transparent, members-only, annual subscription of the Concierge Medicine Doctor’s office, isn’t fair or it is too expensive. With membership fees being touted routinely in the media [but inaccurately, might we add] and in some cases, with fees in the tens of thousands of dollars — people often say that any fee coming from a physicians office is simply too much to bear and far too high. But these stories are the exception and note the general case. In few cases, sure, this may be true in a few offices, but high-priced fee structures are simply the exception, not typical of 97% of the marketplace.
Through their simple actions and daily interactions with their patients, they challenge people who need to find the courage to make bold changes in their health. In many circumstances, households are paying more in cable or cellular phone bills than to have a Concierge Medicine physician. So I ask you, is there a double standard? Are there unmet expectations?
“… a 2013 JP Morgan white paper, Key Trends in Healthcare Patient Payments, showed that 74% of insured consumers are both able and willing to pay their out-of-pocket medical expenses up to $1,000 per year, and 90% would pay for medical expenses up to $500 per year.”
“Where we find value is strengthening the relationship between doctor and patient, and we think that’s where the magic is,” says Bret Jorgensen, CEO of MDVIP.
Lets look at another successful example, Costco.
A recent story noted … There have been recent rumors that Costco may increase its membership fees. And while the Costco membership fee is directed toward keeping prices low, it’s the company’s operational model and commitment to understanding its members that influences those members to buy more. Its recent switch to Citigroup, its limited selection of products, and its lack of aisle signs are all seemingly counterintuitive ways that direct shoppers to spend a bit more. Even the access fee is part of Costco’s formula for success that lets shoppers leave feeling a bit privileged.
As Costco states in its annual report: “(We) seek to maintain what we believe is a perception among our members of our ‘pricing authority’ — consistently providing the most competitive values.” This means reducing prices to meet those of its competitors as well as “holding prices steady despite cost increases instead of passing the increases on to our members, all negatively impacting near-term gross margin as a percentage of net sales.”
The article continued to note … Costco’s willingness to take a hit on gross margin is evidence of its commitment to its model, which is designed to appeal to a specific kind of shopper. However, if it increases fees in 2017, Costco will need to be transparent about its intention to keep prices low.
In an article written in The Huffington Post, Dr. Marcy Zwelling, an internist and critical care doctor in Los Alamitos California, charges patients $2,000 a year and takes no insurance. Insurance is for catastrophic illness, she said, and in many cases patients should carry just that and pay for smaller services out of pocket.
“They’ll save money if they do,” she said. Mammograms can be had for $75, and an MRI costs $200 cash — tops, she said. According to Zwelling, if you have a copay and deductible on top of a high monthly insurance premium, chances are it is less expensive for you to just pay out of pocket for these and other tests. I wrote about how this was certainly the case with filling prescriptions: It’s often cheaper to not put it through your insurance company but just pay out of pocket.
The Huffington Post story continued to add … In the case of concierge medicine, Zwelling said, it’s not about better care for the rich or a case of doctors being greedy. It’s doctors who want to provide an enhanced level of care — spend time with patients, not keep them waiting for hours, coordinate their care with specialists, do research and stay abreast of new treatment options. And that doesn’t happen in a 15-minute office visit, she said. Concierge medicine “allows me to concentrate on the patients, not the paperwork,” she said. The fees she charges go to hiring additional staff. And doctors aren’t the rich dudes we all think they are, she said. “This is about doctors trying to stay in business. When their bottom line gets near zero, they can’t continue.”
Therein enters the cash-only side of medicine and discount side of both Concierge Medicine and Direct Primary Care practices and programs.
“In terms of Patient discounts, I try to negotiate discounted cash pricing for my Patients whenever possible. Whether it is for blood testing, radiology, or supplements/medications – I would rather they keep their money for my know-how/concierge fees. And a lot of times cash-pricing makes their life easier, because they do not have to wonder or worry about whether or not insurance will cover, etc.,” said Shira Miller, MD, a Concierge Medicine Physician in Sherman Oaks, CA.
A few years ago and every month since, our staff at Concierge Medicine Today as well as our sister publications, Concierge Medicine CANADA, The DPC Journal and others have been following these discount pharmacy and laboratory service cash prices.
RELATED PODCAST | AUDIO
(LISTEN) EP. 31 | The DOCPRENEUR PODCAST: “Membership” Pharmacy. Where Everyone Qualifies + Rx Is Affordable
(See supporting infographics below).
3) Environment Matters. If you don’t like it then change it.
If you don’t like the way your exam room visits are going, then change it.
“Smaller waiting rooms, with more flexible, comfortable furnishings, similar to a home environment; coupled with aquariums as calming distractions, and toys and spaces for children to play are the major changes adopted in the interior design of primary care or concierge clinics,” says Mitra Pakdaman is the founder of LA Healthcare Design, a Los Angeles-based interior design studio, utilizing over ten years of in-field experience to provide her signature elegant, fresh, and balanced design concepts to large-scale projects.
In a National Post article written by Kathryn B Carlson in 2012 entitled “Enter the maze: Ikea, Costco, other retailers know how to get you to buy more” she writes …
Retail stores are already testing what was only recently just a theory, and a whole industry has sprouted to deliver what one company calls “scent delivery solutions.” According to ScentAir’s website, it helps Bloomingdale’s U.S. locations capitalize on the power of the nostril: “The soft scent of Baby Powder speaks to a mother’s memory in the infant department. The intimate apparel department is inviting with the soothing scent of Lilac, while Coconut wafts through the swimsuit department.” But Prof. Murray said perhaps the most classic example of a retailer’s use of scent and sound is Abercrombie & Fitch, where upbeat music blares, the clothing is spritzed with perfumes and cologne, and where the lighting is almost obnoxiously dimmed. “They have an atmosphere that is very well-designed for the younger segment they’re aiming for — and it’s almost repellent, actually, to anyone else,” Prof. Murray said. “Everything works together to give the store a kind of nightclub feel.”
Here are some quick and easy ways, a checklist if you will, that you can use today to evaluate your physical environment.
Is Your Practice Environment Comfortable?
- Is the temperature pleasing?
- Is every piece of furniture useful?
- Is the seating is comfortable?
- Is the building safe and secure/HIPAA Compliant?
- Do you provide restroom extras (e.g., good-smelling lotions and soap, toothbrushes, personal products for women, or Scope® with disposable cups for men)
“When my husband and I developed the idea for Boca VIPediatrics, there were so many ‘Disney-style’ ideals I wanted to incorporate, to change the current ‘assembly line’ approach that is taken in most pediatric offices,” says Ashley Rudnick, President of Boca VIPediatrics in Boca Raton, FL. “I handle all aspects of creative marketing and personalizing the VIP experience for our families. As a mom, I’m more in tune to what is missing from the current state of pediatric care. And, because our business is family owned and operated, we offer that personalized, family-style approach!”
Unlike conventional interior designers, Cheryl Janis uses an interdisciplinary approach to design—evaluating the patient experience from the moment they walk through the door until the time they leave, and every step in between.
“In my thirteen years plus experience of designing boutique healthcare spaces, I’ve seen how a new design creates an overwhelmingly positive experience for patients,” says Cheryl Janis, Principal and Lead Designer at Interior Design for Health & Wellness based in San Francisco, CA. “As a result, referrals shoot WAY up at an average of 35% and oftentimes much more within the first 6 months of installing the new design. By using a few basic holistic and evidence-based DIY design techniques, this process can begin immediately. I act as a design consultant to all kinds of health and wellness businesses. I help you design exam and waiting rooms, treatment rooms, practitioner and physician offices, entire facilities and clinics, staff kitchens and lounges, and other healing spaces that make patients and clients, their families and teams feel deeply nurtured and safe. All this while growing your bottom line and increasing your professional aesthetic.”
Is Your Practice Environment Clean?
- Does every room in your medical practice smell clean and fresh?
- Is the office and all desks cluttered? All areas should be neat and orderly (e.g., extra boxes out of sight, pens and handouts in nice containers, no opened medical files from patients lying on desks).
- Is the entire Medical Practice spotless (e.g., floors, glass, and surfaces all white-glove approved. Think surgically clean!)
- Are your trash cans visible and emptied regularly?
- Does your staff constantly scan the floors for trash, small pieces of paper, dropped pens, etc.?
Environment matters. So, if you don’t like it then change it.
“The delivery of medical care has become complicated and costly. Nobody likes going to the doctor anymore, not even your doctor. We can change this,” said Dr. Julie Gunther who started an innovative, patient-centered direct primary care practice in her hometown of Boise in 2014. She founded sparkMD in 2014 to take back her relationship with her patients and to empower herself to be the doctor she set out to be.
A recent survey conducted on behalf of Concierge Medicine Today and its sister publication, The Direct Primary Care Journal (The DPC Journal) found that more than 60% of 1,000 American consumers from March 2017 to April of 2017, were more comfortable being treated by an Osteopathic physician, an RN, NP or a PA verses a traditional healthcare provider who had an M.D. behind their name.
So by now, we’ve made the case that there is certainly room for improvement in the healthcare marketplace.
Today however, it is the responsibility of the Physician or the Practice Owner to make the practice be the best it can possibly be. Like it or not, your physical environment and cleanliness, is a direct reflection of your competence as a physician, as is the actions or inaction, of your staff.
Finally, as with all good stories however, this story today comes with a cautionary tale.
Caution: Every innovation has an expiration date. Look for ways to improve the patient experience. Here are some ideas …
Let’s look at another example of innovation reaching an expiry date, church collection processes. Different in structure than healthcare but similar in its outdated processes. According to a recent interview we had with one mega church, the primary reason many churches cling to outdated models, for example, is that their programs lack innovation and leadership. What if one day you went to a church that cared more about delivering a message than collecting an offertory? What if one day, almost the entire collection, tithe and giving process was automated over an App that the church produced? I can tell you from experience, that this innovative idea in some religious circles is already being done.
Another example. Big-box hospitals and health systems are finding alternative methods to bring convenient care to their patients, renting retail space in Walmarts, opening their own clinic chains, or offering their physician practices at more convenient hours. These facilities started with runny noses and flu shots. Now retail health clinics are thinking bigger.
“Consumers will expect more from their physicians,” says Terry Bauer, CEO of Specialdocs in Chicago, IL. “I heard an interesting story from a colleague this week that some patients in a hospital telemedicine program rated videoconferencing more personal than an actual bedside visit by a physician. Why? Because the physicians being beamed in to the room were focused, undistracted by phone calls or pagers, and not in a hurry to complete their rounds. Wise physicians will take heed. With rising consumerism and transparency in healthcare, competition is rising, too. The most engaged and engaging physicians will be the winners.”
Is there room for improvement and innovation in the way physicians make surgeon and hospital referrals? Absolutely!
We’ve spent a great deal of time this past year looking into this topic.
In late 2016 to present, we asked physicians in both oral interviews and through polling When You refer A Patient For Surgery, How Do You Determine The Quality of That Facility or Surgeon? If the answers don’t alarm you, they should. We found that current surgeon referral methods lack any type of objective outcomes-based information. In fact, no respondents in our survey reported using actual data, with one-third replying that the primary way they choose a surgeon for their patients is based upon the opinion of a colleague who stated that the surgeon was good.
- 31% of physicians said “My Other Colleagues Told Me They Are Good.”
- 22% of Physician respondents said “Other Patients Have Had Surgeries There.”
- 19% indicated “My Patient(s) reported they had a good experience.”
According to MPIRICA Health, a Washington-based healthcare quality transparency company that scores hospitals and surgeons based on actual outcomes for specific surgeries, “Quality Scores should be designed as an objective comparison of facilities and physicians, so it is essential that the quality measurements upon which the score is based are themselves objective, and that the underlying data is adjusted to account for providers who take on higher-risk cases.”
We agree. And, this is quite possibly a great starting point for most Concierge Medicine physicians to begin improving their referral process, making more informed decisions using patient outcome data as well as innovating and creating value for their patients that is part of the annual membership.
Based on currently available data that are reported by hospitals, key measurements critical for evaluating quality should include: mortality; re-admissions; and complications. Concierge Medicine Today continues to support health care professionals and their patients in promoting and advocating for the transparency of information and trust that comes with having clinically driven, scientifically valid and weighted calculations pertaining to quality and making that information available and accessible to patients in a simple to understand format.
“Building relationships with local labs, imaging and specialists,” adds Bill Cossart of MedFirst Partners. “Specialists can be solved with consulting services like Doctor Pocket. Lets keep fighting the good fight, and rely on the ideas for support. If [this] feels lonely, look at it this way, you have no competition.”
“The typical primary care physician practice may have 2,000 to 3,000 patients it handles regularly,” adds Jorgensen, chairman-CEO of MDVIP. “Because of the retainer method, concierge doctors can get this workload down to 300 to 600 patients, they serve, and keep time on their schedule for same-day appointments in half-hour time slots, whether during the week, in the evenings or on weekends.”
Walgreens also has made several other maneuvers aiming to free itself from the drugstore mold in recent years. For example, it partnered with DeKalb Medical in Decatur, Ga., to deliver medications to the bedside from the on-site pharmacy. It formed accountable care organizations with physician groups in New Jersey, Florida and Texas to strengthen collaboration between physicians and pharmacists. And it launched a care transitions program last year called WellTransitions, to help bolster medication adherence and reduce readmission rates and costs.
“To be able to practice in this fashion, the patient roster is limited to a maximum of 600 patients. Each patient enjoys a 90- to 120-minute annual wellness visit similar to an executive style physical. This includes an exam, review and coaching for every patient. Follow up visits last 30 minutes. Under this calculation, doctors see eight to 12 patients a day. Physicians benefit on multiple fronts. We enjoy financial stability in this uncertain time. We regain the freedom to practice the way we were trained. Our time, tools and technology improve our abilities and make us even more valuable to our patients than we were before. Partnering with a consultant or an organization who provides the resources to transition successfully to this model is critical particularly to ensure that your practice is compliant with all federal and state laws. The model even improves national outcomes. Hospitalizations are down – by 79% in Medicare patients in one year and 72% in commercial patients. Readmission rates for common problems (Acute MI, CHF and pneumonia) are all under 2%, as compared to the national averages that range from 15% to 21%. Control of chronic conditions is better against all benchmarks and together, these saved the healthcare system over $300 million a year. The patient benefits of a smaller size practice include same-day appointments, 24-hour availability, no waiting and a higher level of coordination of care. As a result, patient satisfaction tops 94%, with nine in 10 patients renewing annually. Moreover, physician satisfaction is over 95%. With the right tools and model, we get to practice medicine the way we had been trained. We find the time to talk. We tease out buried details, identify issues, and become the hands-on healers we once were. For their part, patients become more accountable and see real results.” ~Dr. Andrea Klemes is the Chief Medical Officer of MDVIP.
Dr. Ellie Campbell continues to state “if an urgent care center has a $150 visit fee regardless of the level of care provided, and it is more convenient than their primary doctor, patients will choose an unknown “luck of the draw” provider. There was a time when patients valued their family doctor, trusted our opinion and called us after hours to help decide if symptoms needed urgent attention or could wait. Now our phone trees, answering services, and after hours call-sharing doctors make it unlikely that any given patient will actually speak to their own doctor. So they don’t bother, and they seek care wherever it is most convenient. Patients value speed and low cost most of all for most minor complaints. The open accessibility of drug stores makes the “while I’m here, I might as well be sure I don’t have strep throat” too convenient to decline. Many patients say, “I just did not want to bother you on the weekend, and I was near there anyhow.” Instant care, instant prescription. Even the time to wait for me to phone in a prescription can be insufferably long for some hurried or anxious patients. As long as we live in a world of drive-though windows, ATMs, and garage door openers, patients are going to value and pay for any service that gets them in and out quickly, on their time schedule, with their desired objective. Primary care doctors need to learn to adapt, as this model of care delivery seems here to stay. Unless we offer on site dispensaries, extended hours, and no appointment needed delivery, we will be deferring more urgent issues to these models. Perhaps then we will have more time to devote to preventing disease and reversing the burden of chronic conditions, if only we can convince third party payors that there is value in that.”
“With concierge medicine, the impact for patients and physicians is phenomenal,” adds Richard Doughty, Cypress Concierge Medicine CEO in an article on Baton Rouge’s The Advocate.
Following are some counter intuitive ways Costco has done this so far, with success:
The Amex switch: In 2015, Costco took the risky move of ending its exclusive relationship with American Express and signed a deal with Visa, making Citigroup its only credit card provider. This may have alienated a number of members, but Costco wagered the move would attract many more. “Limiting payment options and directing all perks through a single partner is yet another way of delivering lower prices and more benefits to customers,” wrote Denise Lee Yohn in her book, Extraordinary Experiences: What Great Retail and Restaurant Brands Do.
It is a little known fact that inside Concierge Medicine payment models, with the majority of subscription fees ranging typically from $100 to $225/pmpm, patients prefer to pay annually for their healthcare membership fee, versus monthly or quarterly.
- Similar, but different, inside the mass market variant model Direct Primary Care (DPC) which has prices ranges between $5/pmpm to $99/pmpm, subscribers prefer to pay monthly.
- The consumer [e.g. patient] population purchasing DPC services monthly range in age usually from 25-49. Conversely, most Concierge Medicine patients range in age from 50 and up.
The selection ceiling: Regardless of the variety of items one can purchase at Costco, from safari tours to caskets, individual product choices do not run deep. In fact, it reportedly only carries about 4,000 unique items at a time. It may offer just four toothpaste brands, while Walmart carries dozens of sizes and brands. The logic behind this limitation is simple: Studies have shown when given too much choice, consumers tend to purchase less.
For Concierge Physicians, Instead of Upselling, Offer Choices:
Many membership medicine and direct-pay doctors are incorporating a vast number of added-value services for patients to aid in patient satisfaction and retention. Services include: Heart burn and gastrointestinal disorders; B12 sinjections; Vitamin deficiencies; Hormone balancing therapies; Mole checks; Testosterone injections; Medically supervised fat loss programs and a diverse collection of other wellness-focused and anti-aging solutions.
“I give a lot of B12 injections and testosterone injections for those who need it,” says Dr. Sarah Mildred Gamble, D.O. of Greenwich, CT who runs a thriving concierge medicine practice. “I also do a lot of in-office procedures like mole checks and removal, trigger point injections … and then there is my Botox/fillers appointments too.”
One does not often correlate grocery store shopping with loyalty but I love diving deep into brand strategies and American grocery competition is intense. For example, this thinking gives Costco its most powerful advantage: Customers become loyal to the store. The customers remember having paid a membership fee and are more likely to visit Costco than a non-member would be likely to visit supermarket X – shoppers are less likely to shop at a variety of stores.
With several large supermarkets, Wal-Mart Stores, Inc. (WMT Wal-Mart Stores Inc WMT 75.24 +0.08%) Supercenters, Target Corp. (TGT Target Corp TGT 55.77 -0.14%), Sam’s Club, BJ’s Wholesale Club and a variety of neighborhood groceries and farmer’s markets, Americans have lots of choice about where to spend their weekly food budget. The same could be said for the healthcare consumer today. SEE our 2017 Free Market Healthcare Delivery Innovation INFOGRAPHIC HERE.
Revenues from membership fees are great for wholesale grocery clubs. Aside from a few minutes of an employee’s time, plus the cost of the card and subsequent promotional mailings, managing membership isn’t too costly. As such, Costco’s $2.5 billion in membership fee revenue is almost entirely profit. When you consider that, in 2015, Costco’s net income was only $2.38 billion, you can see why the company needs membership fees to stay in business. Thankfully, its membership numbers keep growing: They were up 8% in 2014, and 6% in 2015. The company is likely to not only maintain, but to increase its revenue and profit in the coming years.
Until recently, healthcare was not particularly free market friendly. Today, there are several free market healthcare delivery models entering the healthcare landscape. (SEE INFOGRAPHIC HERE.)
Dr. Chad Rudnick is a Concierge Medicine Pediatrician at Boca VIPediatrics, Boca Raton, FL writes The direct primary care, concierge medicine, fee-for-service, or the like-named system is not designed to be the one and only answer to solving our health care crisis. Rather, our health care system needs multiple options and solutions that best serve each individual and family.
The subscription-based healthcare delivery model owes its success to the balance of relationship and value it provides to both the doctor and the patient.
From a General Marketplace, Subscription-Based Business Perspective … “The subscription model is also not about getting a project done and then moving on to the next client. It allows us as a service provider to grow a relationship with the client and cater to their business or design needs as they change. It builds a substantial level of trust since the client knows that you have their best interests in mind and understand their business. We must always be pushing for innovation and exploring ways to make a greater impact, to be proactive instead of reactive.” ~Entrepreneur, Article: Why You Should Use a Subscription Business Model
So, when compared to traditional, insurance-based physicians working in a traditional primary care setting, Concierge Medicine Today finds [2016-2017] Concierge Physician salaries are on average, approx. $299,700 per year.
“Overall, Concierge Medicine is thriving in metropolitan markets with the majority of physician earnings increasing gradually each year and our independent analysis and observations line up with the same conclusions as the Medscape 2016 Annual Physician Compensation Report,” notes Tetreault. “Looking at the subscription-based healthcare delivery space in more specificity however, we did see the salary trend lines dip in 2013 and 2014 … because we observed other subscription-based healthcare delivery startup models enter the free market healthcare space [DPC, Urgent Care Programs, and MicroClinic models] and provide a service offering geared towards primary and preventative care, urgent care, chronic disease management and wellness support through a monthly care fee to patients with lower incomes. The service offering comparison, duration [in minutes], wait-times and tests offered under the subscription(s) varied dramatically. However, in 2015 and again in 2016, we noticed the salaries in Concierge Medicine delivery models moving in a positive upward direction as the other mass market variant models began to identify and define their own brand and distinguish themselves from Concierge Medical Care by price, retainer, insurance and/or Medicare participation and their patient audience demographic. Concierge Medicine continues to grow at a moderate and acceptable pace each year with physician earnings increasing gradually. We concur with other outside surveys and many industry consultant observations that moderate and gradual growth will continue each year in Concierge Medicine … as industry consultants continue to field more and more physician inquiries from entrepreneurial-minded doctors (from across the U.S.) about their business model options.”
Additionally, Concierge Medicine Today’s 2016 Salary Trends Report states … A surprising finding within these figures is the increasing number of specialty practices opening from February of 2010 to December 2016, up 6% in the past two years alone [2014-2016]. Those specialties include, but are not limited to: Pediatric, Dentistry, Spine Surgery, Dermatology, OBGYN, Functional Medicine, Cardiology and Nephrology, to name a few.
The Bottom Line
“Patients value speed and low cost most of all for most minor complaints,” notes Dr. Ellie Campbell of Cumming, GA. “Even my patients who pay a membership fee for all of their covered and non-covered services including 24-hour access to my personal email and cell phone number, and whose care for these complaints would be covered without additional cost, still use these [retail medicine style] health providers [i.e. CVS, MinuteClinic, TakeCare Clinic, etc.]. Many patients say, ‘I just did not want to bother you on the weekend, and I was near there anyhow.’ As long as we live in a world of drive-though windows, ATMs, and garage door openers, patients are going to value and pay for any service that gets them in and out quickly, on their time schedule, with their desired objective. We [Concierge Medicine and Direct-Pay Doctors] need to learn to adapt, as this delivery model of care seems here to stay. Unless we offer on site dispensaries, extended hours, and no appointment needed delivery, we will be deferring more urgent issues to these models. Perhaps then we will have more time to devote to preventing disease and reversing the burden of chronic conditions, if only we can convince third party payors that there is value in that.”
We’ve learned today that Costco, Amazon and the like have an annual subscription, coinciding with consistently low prices which help to build a strong consumer following. Inside many Concierge Medicine offices, the same is true. An annual fee for services NOT COVERED by insurance and negotiated discounts with labs, MRIs, hospitals, some occasional pharmacy (where legal) and the doctors are continuing to find the time to innovate the experience and value. In turn, they have an extremely high retention rate year after year.
With the consumer demand expanding domestically as well as practice revenues increasing year over year, Concierge Medicine looks poised to continue to grow moderately for years to come. It will be and currently is one of the early adopters of modern healthcare technology. Concierge Physicians are innovating in areas of healthcare that others are not and may never venture. Those areas of particular interest now include: Comprehensive and Limited Genetic Testing; Whole Genome Sequencing; Telehealth communication integration; EBM Solutions; anti-aging solutions; Pharmacogenomics, Advanced Lipid Testing and more.