The State of Pediatric Concierge Medicine

The Fall SOAPM newsletter has been out for a bit and yours truly did a piece on concierge medicine.  I have a fun follow-up  to it, too!  Make sure you join SOAPM – it’s only $30/year – to get the rest of the newsletter…

The State of Pediatric Concierge Medicine

The practice of “concierge medicine” (boutique medicine, direct care, whatever you want to call it) has grown substantially in the last few years. Unsupportable patient volume, managed care payment and administrative challenges, and clinical dissatisfaction have led to literally thousands of physicians getting out of the insurance-dependency loop and into smaller, slower practices. With physician satisfaction at an all-time low, especially in primary care, is it any wonder that pediatricians are looking for better ways to work with their patients? Perhaps the most telling sign of the arrival of concierge medicine is that there are more than a dozen national organizations that exist solely to help doctors through the process of changing practice models (www.choice.md, www.modernmed.com, www.mdvip.com, etc).

Section on Administration and Practice Management (SOAPM) members may not even be aware of how the concept has infiltrated the system. The SOAPM list itself has documented accounts of practices who charge annual “administration fees” to pay for traditionally non-covered services, like school form generation or special phone services. In addition, there are already a handful of successful pediatric concierge practices and they are not limited to affluent suburbs and communities— they exist in places like Pittsburgh and Maine. (See one AAP member’s own account at http://practice.aap.org/content.aspx?aid=2346.)

There are some aspects of the concierge model that seem particularly well-suited to pediatrics. A concierge practice, by definition, provides a medical home with a mutual patient-physician focus on preventive care. However, the difference between the demand for pediatric services in the first years of life and the later years is so large that it makes it difficult to price easily. States without universal coverage also add a significant immunization expense for which someone has to pay. Most of all, though, pediatricians would rather deal with the Devil-They-Know (insurance reimbursement) than give it all up to run a practice the way they envisioned on med school graduation day.

What can we do, then, to capture some of the satisfaction that both patients and physicians in the concierge market experience? There are baby steps, appropriately, that may be the answer. More than one of the professional groups working with concierge practices outlines hybrid- or mixed-models that make the transition to or, more importantly, addition of concierge services quite possible. For the purpose of this discussion, there are 2 types of concierge medicine: fees for non-covered services and fees for care. Let’s discuss the fees for non-covered services first as we consider some of the baby steps.

Fees for Non-Covered Services

As I pointed out earlier, SOAPM list members are already familiar with the first model, as a number of you are already doing it. (Did you realize that you are a concierge practice?!) For those of you who do not yet package services like form completion or medication refills—and that number grows smaller daily—why not turn what is commonly treated as an unwelcome addition to your overhead as a revenue center? Imagine the never-ending chore of completing school forms, when your office typically does the least possible work, becoming a true clinical opportunity and chance to market your practice. Your competition, remember, is not simply the other pediatricians in town; it is also FedEx, Netflix, Apple, Nordstrom, and any other service-oriented organization.

What kinds of services are being picked up by these nascent concierge practices? On SOAPM, and online, you can find a relatively common list:

  • Medication Refills
  • Telephone Advice (before or after Office Hours)
  • Insurance Claim Management
  • Travel Research
  • Forms Galore
    • Pre-authorization/Medication Forms
    • School Forms
    • Home Health/Therapy Forms
    • School Excuses
    • Attention-Deficit/Hyperactivity
    • Sports Forms Disorder Questionnaire Forms

There are other, more substantial non-covered services, from house calls to personalized clinical plans, that are already in use by practices around the country. Note that even incredibly modest fees, such as $25 a year per family, add up to enormous potential gains for the practice, which can be used to develop the quality of the service.

The SOAPM population, in particular, should work to provide policies, practical examples, and standards for these types of services. Even without official endorsement, an understanding among leading pediatric practices about the proper ways to serve the patients is immensely effective.

There are 2 challenges to offering non-covered services to patients. First, you must stay abreast of the status of the services—if a payer changes policies and suddenly “covers” one of your procedures (whether it pays for it or not), you have a problem. Second, patients are used to receiving many of these services for free at present. Not only does your communication with them need to convince them of your position, you need to package the services in such a way that the patients feel like they are getting something new and improved. There has been considerable documentation and discussion online about the lessons learned from developing these services that you should consult.

Fees for Care

The “Fee for Care” concierge model is what most people envision when discussing the subject. We all understand the concept, but take a few minutes to do the math that insurance companies don’t want you to do: Use your practice management system to determine your total revenue last year. Divide that figure by your total number of active patients. That is how much, on average, your patients paid you last year. Divide that by 12, and the resulting monthly rate is usually pretty shocking. I have seen as low as $20 but almost never over $50, depending on how you count “active patients.” Think about that: for $50 per patient per month, almost all of you who are reading this piece would actually make more than you did last year.

Of course, this is not a realistic, but it should give you a better sense of why it has been successful in most of the practices who have tried it. What are the options for those practices that cannot jump into the deep end?

One concept for larger practices to consider is to spin off a small concierge group from within the existing group. This is the medical version of the classic “shelf space” marketing concept from the first days of retail consumerism. Rather than have a local concierge group to open on its own practice down the block, perhaps you should be the ones to do it. Take 1 or 2 of the slowest/most thorough/patient friendly docs you have and put him or her/them in an environment where his or her/their volume is not critical. Share your existing resources to shore up the practice in the crucial early period and treat it as an additional option you can offer to your patients, especially those on plans with which you do not participate. By giving your patients a choice to see your practice in the manner that suits them best, you expand your opportunity to reach into the community and grow your practice in a healthy manner.

Should you consider this hybrid approach (or any of the others, for that matter) make sure you do not give the impression of having 2 “tiers” of care in your practice. One way to avoid this is to not have an individual physician work on “both sides of the fence” and be in a position of having a concierge patient jump to the front of the line, ahead of the non-concierge patients.

Finally, as with any endeavor of this nature, you need to consider the legal ramifications. Pediatricians in California, for example, have to contend with the Knox-Keene Act (which is designed to protect patients from ill-designed insurance coverage). Start with the national concierge medicine organizations and listen to what they say distinguishes them. Speak to your peers, locally and on the SOAPM e-mail list, and, if nothing else, strongly consider what you need to do to provide the convenience that your patients demand.

As I mention above, I have an extension to this piece from Physician’s Practice magazine.

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