As the healthcare industry continues to evolve and improve the quality provided to patients, many physicians are learning that the established ways of caring for patients often leaves them feeling dissatisfied with the “assembly line” method that is often times employed throughout the day. On average, a medical provider spends between 10 and 15 minutes with a patient. This makes it no surprise that such a small window of time leaves the patient feeling underserved and the doctor overworked to drive business according to volume, rather than value. This has led many physicians to open integrative medical facilities but has also left them struggling to sustain their business.
As a solution to the growing issue of making medicine affordable in private practices while still accruing revenue, many providers are transitioning their practices to concierge or membership-based facilities. According to the American Academy of Private Physicians (AAPP), in 2012, 4,400 physicians classified themselves as concierge medical providers, up by 30 percent from the previous year. Of the more than 4,000 providers offering concierge medical care, a quarter of them operated on a cash-only basis. This new wave of medicine is driven by the need for independent, cash-only providers to survive without the cushion of insurance coverage money that other companies covered by Medicaid and Medicare are provided. With a national average of $135 to $150 per month, concierge medicine physicians tend to establish a yearly fee for their services and allow the patient to pay monthly, quarterly or annually. While some may think the amount is too much to pay out of pocket, compare it to the $15,000 paid out of pocket by patients on an annual basis for healthcare expenses and the savings could make it worth their while.
The profitability aspect of this payment structure is no sure fire way to increase revenue but a recent Bloomberg Businessweek report showed that the average salary for a concierge physician ranged from $150,000 to $300,000. Often times, this could even out a physician’s pay, bringing them up to their expected salary. While the increase in profits works to satisfy the business demands of a practice, it also assists physicians in providing more personalized care to patients. A main underlying concept behind concierge medicine is that physicians spend more time with patients, providing them with personalized care that is based on quality time spent listening to and understanding their ailments. While a typical physician sees an average of 3,000 patients on an annual basis, concierge medical providers tend to have a number of less than 600 patients. The balance of the concept comes from lessening the patient load while maintaining the revenue of higher volume.
As with any business structure change, physicians must determine whether or not the membership-based model is right for their practice. Research on the subject is needed, combined with a comprehensive evaluation of what services are offered through the plan as well as whether or not the amount charged is appropriately priced when compared to the overhead cost of the practice’s service lines. Often times, a matter of affordability is at play as well. Depending on the location and population the physician serves, the appropriate charge for a membership can still be an unaffordable price point for the patients in which the provider caters to. Combatting this hurdle, some providers divide their membership fees according to membership levels. Creating a tiered system, patients can be encouraged to take part in a membership by being given an option as to what type of plan they want. If they can’t afford a $5,000 per year membership plan, maybe a $2,500 membership with different services can still be of great use to them.
While the idea of concierge medicine is still gaining clout in the healthcare industry, many physicians are already choosing to hit the ground running and provide not only a more personalized method of care to their patients, but also a more strategic way to maintain the vitality of their practice. Keeping in mind the vast benefits to both patients and their providers, it’s safe to say the concept of a membership-oriented care structure is here to stay and will continue to gain momentum in the coming years.
Do you offer concierge service to your patients? Share your success with P2P readers!