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At Your Beck and Call

Concierge plans offer the kind of health care Michael Moore would love — if it were universal. But are they worth the out-of-pocket expense?

1Sep

Tired of doctors' visits that consist of waiting 45 minutes for a hurried 5-minute conversation? Try the boutique alternative. Also called concierge care or membership-based coverage, these services are becoming increasingly popular despite their high cost.

The idea is to charge consumers as much as $15,000 a year for better service than they can get through a conventional medical practice. Traditional primary-care physicians tend to serve 2,500 to 3,000 patients, and often the time they can spend with any one is limited by insurance as well as workload. Concierge doctors, in contrast, keep patient loads down to under 600. Most cut their ties to Medicaid and insurance plans. They promise their patients on-time appointments, 24/7 access, and medical tests that the physician, rather than the insurance company, deems necessary. It is medical care when, where, and from whom you want it.

"Most such practices are based on preventive care," says John Marquis, a partner with Michigan-based law firm Warner Norcross & Judd LLP, and a concierge patient himself. "Where traditional primary-care doctors are usually reacting to the needs of the patients in their waiting room, concierge doctors have the time to be more proactive." And by focusing on wellness, says Dr. Edward Goldman, co-founder of MDVIP Corp., a Boca Raton, Florida-based preventive-care network, such practices foster doctor/patient relationships that "identify and find disease."

Why Doctors Like It


How many doctors are currently practicing concierge care is unclear. An August 2005 U.S. Government Accountability Office survey identified 146 such practices nationwide. But Michael L. Blau, a partner in the Boston office of law firm Foley & Lardner LLP and chair of its health-care venture effort, believes the number "is two to three times that now." While the trend seems most active on the coasts, he believes that half the states have at least one concierge practice.

The practices are popular with physicians fed up with rushed patient interaction, mountains of paperwork, and lower reimbursement rates from insurers and Medicaid. The opportunity to increase their incomes doesn't hurt either.

In the decade since the founding of the first concierge plan, Seattle-based MD2, several models have evolved. In addition to stand-alone practices, some doctors now offer two-tier arrangements — concierge service along with traditional care or specialty services. There are even some operational models. All of the more than 150 doctors in MDVIP's network, for example, cap patient loads at 600. Their fees are among the lowest in the boutique field; each patient pays $1,500 to $1,800 per year for a guaranteed 1.5-hour physical, follow-up visit, personal wellness plan, and same-day appointments.

Doctors and patients familiar with concierge arrangements agree that a good doctor-patient relationship is essential, and that the provider should be qualified to treat any existing medical condition. Accordingly, before joining a concierge-care network, says Holly Isdale, managing director and head of Lehman Brothers's Wealth Advisory Group, you should have a detailed conversation with the doctor assigned to you. Questions to ask include how many times a year your personal doctor will be available for in-person
appointments and how often to expect a substitute.

Insurance arrangements must also be clarified. For example, Dr. Jeffrey Bass, a Brookline, Massachusetts-based physician who opened his own membership-based practice this month, requires his patients to maintain their insurance in addition to paying an annual retainer of $3,600 per individual or $6,000 per family. In addition, boundaries of coverage must be set. Some practices turn down clients whose health-care needs are deemed too complex.

A Question of Ethics


Not surprisingly, insurance companies are less than delighted with concierge-care arrangements. Large insurers such as Cigna and Blue Cross/Blue Shield exclude doctors with limited-caseload practices from their provider lists. One objection is that the growth of limited-caseload practices could exacerbate today's already-severe shortage of primary-care physicians.

There have also been rumblings from state insurance commissioners that concierge plans may violate state or federal laws. But the jurisdictions that have weighed in support the idea. In Washington State, for example, a bill enacted this spring called concierge medicine an "innovative, affordable option," and directed the state insurance commissioner to keep track of the plans without regulating them.

Other observers point to ethical issues associated with the plans. Prof. Joseph Restuccia, of Boston University's School of Management, notes that there are "community and societal issues" involved, for both patients and practitioners, because the plans exclude so many patients. And so far it's impossible to say with certainty that concierge care delivers healthier patients. Because this is such a young industry, says Blau, no long-term longitudinal studies have been done to quantify the health benefits for patients over time.

The statistics about the impact on health that do exist come from MDVIP, which claims that hospital stays are down 60 percent and emergency-room visits are down 80 percent among its 55,000 patients, compared with those covered by traditional managed-care plans. And reenrollment rates suggest another type of success. According to Blau, 95 percent or more of patients in the 30 concierge practices he works with reenroll annually.

Companies Catch On


Lately, companies are taking notice of what the plans can offer. In January, Procter & Gamble purchased a minority stake in MDVIP, signaling a boost in the marketing of the concept to both patients and doctors. At least one company, Humana, has added the MDVIP model to its employee health benefits. And a handful of companies are introducing concierge care into their executive health benefits.

At Houghton International Inc., a specialty chemical company based in Valley Forge, Pennsylvania, 9 of the 10 top executives, including CFO David Hays, are covered by an MDVIP doctor, says Wesley D. Warner, vice president, human resources. To Warner, such coverage is cost-effective and serves as insurance against business interruption. "There is nothing more disruptive than having a senior-level executive go out with some [ailment] that could have been prevented," he says, pointing to the wellness aspect of MDVIP.

Going forward, Blau predicts "relatively small, incremental growth" in concierge care. The trend will face numerous limitations, he says, including some related to demand constraints and demographics. To date, only two-thirds of the practices already in business are fully subscribed, he notes. Still, adds Marquis, "there really is no reason to dissuade an executive from doing this. The worst that could happen is that the doctor would discontinue the service and the patient would be stuck back in the old model."

Lori Calabro is a deputy editor at CFO.

Concierge Consumer

Five questions to ask:

  1. What does the annual retainer cover?
  2. Is insurance coverage still required?
  3. How many times a year is the primary doctor available?
  4. Who covers when the primary doctor is not available?
  5. What conditions will terminate the relationship?

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