Pros and Cons of Concierge Medicine
What is concierge healthcare?
See also Medical Practices
Although there are nuances, the general concept of concierge healthcare, also called boutique medicine, membership medicine and direct care, is that a patient pays a retainer either on a monthly or annual basis to get access to a physician. Most concierge healthcare practices still accept insurance, but the retainer fee is currently an out-of-pocket burden for the patient. Since the first U.S. concierge practice started in 1996, the number of concierge physicians continues to grow. Between 2005 and 2010 that number increased 900 percent with significant growth, especially in big cities, over the last year. According to U.S. News & World Report, 6 percent of physicians were practicing under a concierge model in 2014 compared with just 4 percent in 2012.
Pro: More time with each patient
Even before the Affordable Care Act (ACA), the United States had a shortage of physicians, and the implementation of ACA reforms only aggravated the issue. Each doctor at a typical practice manages 2,000 patients in contrast to a concierge doctor who aims for 500 patients or fewer. Simply put, these numbers mean if you opt for the concierge medicine model, you will have more time to devote to each patient and still cover costs because you set the retainer fee.
Pro: Packaged services can reduce overhead
Depending on what services you provide as part of the concierge fee and whether you continue to accept insurance, your practice could reduce billing and collection costs. For example, if standard office visits are included in your monthly fee and a patient comes in multiple times in a month, your billing department will only send out one invoice rather than multiple.
Pro: Create a medical practice personalized to your circumstances
If you choose the concierge model, there’s flexibility for you to create a medical practice specific to your community’s needs and your own professional goals.
Con: Lose patients
If a family is already struggling to pay insurance premiums, co-pays and deductibles, they may not be able to accommodate a concierge retainer. Most studies reveal that practices experience a drop in patients initially when they switch to a concierge model.
Con: More demanding patients
Patients willing to pay a concierge fee for healthcare are expecting a high level of service in return. Some of the expected benefits of many concierge plans such as 24-hour access and house calls may not align with the type of practice you envision.
Con: Challenging to get the correct formula
Since every medical practice is unique, it may be challenging to set up a successful concierge healthcare structure. You need to determine your retainer fee and what that includes. This structure needs to be palatable to your marketplace and your patients.
How to Use This Information
At Krause CPAs & Business Advisors, we help medical practices of all sizes achieve their financial goals. Considering a concierge model? We will help you work through benefits and challenges for your medical practice. For additional information please contact us at (303) 388-1010, or click here to contact us.