Are Concierge Medical Services on the Upswing?

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."

While running her pediatric practice years ago in St. Louis, MO, she was seeing up to 35 patients a day for about 10 minutes each. "Once I realized how much time my staff was spending on third party payrolls, and then I added that cost up for the year and over the years, it was so sickening," she says.

That's when she decided to launch her personal practice, with a "six or seven house call day," she says. She is moving her business office to San Francisco, and hired a CEO to run the company, which includes about 10 physicians scattered throughout the country, as well as the Dominican Republic and Peru. There is one physician based in Chicago who's targeting executive healthcare, another in Iowa focusing on elderly care, she says.

"You have a completely paperless loop, between patient and physician," she says. "You have high level communications. Patients supplant their records from Google PHR or Microsoft or whatever. Patients pay membership fees like they do for their cell phones or other Web-based services." The average acceptable price for consumers is about $125 a month, she says.

"Patients of course still need some kind of health insurance, but they don't have to be exorbitant," she says. "They need a high deductible plan to cover them for cancer or being hit by a bus or being in the ICU for two months. Remember insurers don't provide services. I provide services. The physician."

My former physician, a terrific guy, told me a few years ago he was getting out of his practice, tired of the insurance hassles, and was opting for the concierge route. When he finally left, he invited me to join his other patients as part of his concierge business.

After our private conversation, he sent a letter. It was going to be a lot of money, the fixed amount, each month. In return, I would get his personal care, and lengthy individual appointments. I evaluated it. After some thought, I didn't think it was worth it. The last time I left his office, I thought, "Oh well, I'll be looking for another doctor."

I have a feeling Natalie Hodge wouldn't accept that, and would keep working to get potential patients like me on board.