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Are Concierge Medical Services on the Upswing?

Joe Cantlupe, for HealthLeaders Media, April 29, 2010

A longtime pediatrician, Natalie Hodge, MD, was living the life of primary care despair.

For years she rushed from patient to patient in her office, giving them a few minutes here and there, doing a ton of insurance paperwork, and then decided enough was enough. Like many physicians, she felt drained and lost.

"People calling, people answering phones, people scheduling, people verifying eligibility, people checking on insurance, people . . ." she says. You get the picture.

It wasn't her style to sit still. Eventually, she founded Personal Medicine, essentially a concierge medical service, which avoids third party payers as much as possible, and adds its own unique touches, like specialization in house calls, and thriving on "virtual" communication. As she sees it, the mix is the bedrock for a "new reality for the future of primary care medicine," built around "emergent technologies." Curtailing insurance has cut costs about 80%, she says.

There are growing numbers in the medical arena interested in what she has to say. She was interviewed by the Associated Press, made a presentation to the Mayo Clinic, and in a few weeks she's preparing a speech about her practice before primary care physicians at the University of Kentucky on May 9. She tells me times are good.

If anything, these are certainly interesting times for concierge medicine, though whether it is the wave of the future remains to be seen. It's not an easy sell for everybody, either patients or physicians, who number about 5,000 in concierge practices. The medical establishment, too, has viewed concierge medicine skeptically though there are many out there who see it as worthwhile because physicians are continuing to work, and patients will be treated. That's OK, no?

Docs want to make money, and in concierge, they are making some headway. In a February survey by the Concierge Medicine Research Collective, an independent healthcare research center based in Atlanta, nearly 60 % of all current concierge physicians are doing "better" financially than a year ago. Still, 29% indicated there was no change; and 13 % fared worse, according to the poll.

An attorney, John R. Marquis, has written a paper recently stating that the new Patient Protection and Affordable Care Act "is going to cause serious problems for (concierge) practices and will require them to restructure in order to accommodate it." Fiscal restraints imposed by the law will impact physicians who remain in Medicare and charge a periodic fee as well as those who opt out of Medicare and then charge the patient a fee for providing all the medical care the patient needs, he said. Marquis discusses the health reform impact on concierge medicine physician practices, particularly related to Medicare, in his paper, "New Health Care Act Deals Serious Blows to Concierge Medicine."

Hodge said she had been unaware of the paper, but expressed little concern after reviewing it. "We are a network of physicians that create direct patient financial relationships," she says. "We do not have any interest, nor contractual relationship with Medicare or Medicaid. So this has nothing to do with our business. Lawyers also like to create a lot of mystery and fear around Medicare. PM has a contract with patients. PM has a contract with physicians, that's it."

She doesn't like the term concierge for what she does, preferring to call it direct medical practice.

"We are entering a whole new ballgame for healthcare strategic planning—the post reform era," she says. "The service line strategy moving forward must be integrating cash revenue stream opportunities and (personal medicine) is a way organizations may implement this as the third party payer pie continues to shrink."

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