Here's why membership medicine is gaining physician attention

February 10, 2017

Patients pay fees for bundle of services instead of-or in addition to-going through insurance

Physician practices described as “membership medicine” have been springing up across the country during the past decade. These practices, in which patients pay a monthly or annual retainer to their doctor or medical office for a contracted bundle of services, offer an alternative model for physicians who hope to spend less time on paperwork and more time with patients.

Jay Keese, executive director of the Direct Primary Care Coalition and a lobbyist with Capital Advocates in Washington, D.C., says those who switch from medicine-as-usual to membership medicine typically reduce their patient panel size from about 2,500 to 600. 

 

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Patients in membership medicine practices typically pay about $60 per month for the bundle of services, which are usually standardized within a practice and not individually negotiated, Keese says. With 600 patients, that “adds up to a pretty good revenue stream, and you can probably cut down on administrative personnel,” resulting in cost savings, he says. 

In addition to benefitting from improved income stream, more time with patients and less paperwork, those who have gone the membership medicine route say they’re happy they don’t need to participate in the Quality Payment Program established under the Medicare Access and Chip Reauthorization Act of 2015 (MACRA).

Eric Potter, MD, who practices internal medicine and pediatrics in Franklin, Tennessee, under the name Sanctuary Functional Medicine, was pleased when the business consultant who helped him set up his business told him that the new Medicare reimbursement program didn’t apply to his new practice. 

“How much time do we need to spend documenting things rather than just taking care of patients?” he says. Given how relatively new and unregulated membership medicine is, he adds, “It’s a little like cutting down the forest and building a log cabin. You feel like a little bit of a frontiersman.”

Kylie Vannaman, MD, a primary care physician and co-founder of Health Suite 110 in Overland Park, Kansas, says she’s also glad to be avoiding MACRA. Otherwise, when dealing with Medicare, doctors have to spend time on paperwork “and checking boxes to prove what kind of care [they’re] giving, rather than actually giving care,” she says. “It’s exhausting, and not worth it.”

 

Benefits of Membership

Among the benefits of membership medicine is the flexibility it affords in communicating with patients, because physicians no longer need to figure out how they’re going to bill for a visit, Keese says.

“Texting over secure text applications is very prevalent. You’re really raising the level of the experience, so the relationship between the doctor and the patient is less defined by a visit,” he says. “You can have a consult using technology-phone, e-mail, any of these things-rather than having to come in and see the doctor.” 

 

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Vic Wood, DO, a primary care doctor in Wheeling, West Virginia, is among the earliest practitioners of membership medicine, having opened a practice in 2003 after reading in Medical Economics about a type of membership practice called concierge medicine (see sidebar for definitions). 

He initially aimed his program, which he calls Primary Care One, at the working poor-those making a bit more than minimum wage and incomes below the poverty line-but after the Affordable Care Act passed and many of his initial patients became eligible for Medicaid, Wood’s population shifted to more affluent patients whose deductibles had risen over the years.

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Wood charges monthly fees of $83 for an individual and $125 for a family and hasn’t changed those prices in 13 years. His contracts include unlimited access to his primary care services, as well as medications for acute conditions; medications for chronic conditions cost about $10 per medication per month. 

About 15% of Wood’s income, which he pegs at $25,000 per month, and about 500 of his patients (through 200 to 250 individual and family policies), come through Primary Care One, while the rest pay per visit or are covered by insurance. 

Wood says he’s able to spend the necessary time with his Primary Care One patients “because the guaranteed income allows you to carve it out,” although he says he gives his traditional insurance patients equal time and sees the steady income stream as the primary advantage to membership medicine. 

“I wish that I had a whole practice full of Primary Care One patients because I don’t have to chase the money, and I don’t have the billing costs associated with it. It’s a simpler process,” he says. “It’s helped me keep my doors open. This is one way, once again, for … doctors to make money and to be profitable.”

Caring for the whole person

Potter launched his practice in June 2014 but had been thinking about such a move-not necessarily into membership medicine,  but something along those lines-during more than a decade of chafing at the increasing paperwork load and decreasing time with patients. “I wanted to practice medicine where I could take care of the whole person, but it didn’t seem like there was enough time,” he says.

 

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Potter began to get serious about membership medicine after attending a conference in January 2014 where practitioners presented their stories. “I spent at least a few months thinking, ‘This is too good to be true. Is that legal?’” 

After meeting with one of the speakers from the conference, he became convinced, drew up a business plan and started seeing membership patients part-time in Spring Hill, Tennessee, but also worked part-time in a more traditional setting while building up his membership practice. He’s now taking membership patients full time.

Potter moved to a larger office in nearby Franklin in August 2016. He employs a relations manager who handles billing, one full-time and one part-time nurse, and he’s looking to hire another full-time nurse and a physician’s assistant.

The practice offers a monthly plan, the price of which depends on the age of the patient(s) covered, with discounts for larger families, although Potter declines to reveal specific dollar amounts. He has an in-house pharmacy that sells prescriptions at cost.

Consultations can take place over the phone if the patient doesn’t need to be physically examined, and patients can send him messages, look at their records and lab results and pay bills through a secure patient portal. “We can discuss their lab results after they pull them up on their computer, and they don’t have to physically be in the office,” Potter says.

Potter says his practice has about 200 patients who pay a monthly fee and another 200 per month who pay per visit, although some of the latter group will switch over to monthly as they build up a relationship and decide they want regular care. 

His patients skew toward low- to middle-income because “a lot of those in the higher-income bracket either have insurance or feel like they don’t need this,” he says. “It’s those looking for a value. Often small business owners, used to looking at the bottom line, sit down and calculate and realize this is a good deal.”

Some of his membership patients have insurance but it tends to be policies with high deductibles and copayments, Potter says. These patients appreciate the fixed-cost primary care that membership medicine offers, along with discounts on prescriptions and lab tests provided at cost, he says.

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Finding a sustainable pace

Vannaman’s practice, which opened in July 2015, has one other doctor-an internist-and has space for two more. She switched after practicing in a hospital-owned setting where she saw an average of 18 to 22 patients a day and felt pressure to see even more. 

“I quickly found that the pace was going to be unsustainable for me,” she says. “I felt I wasn’t providing the care that I wanted to provide, wasn’t able to spend time with patients, wasn’t able to get at the root of their issues. That model incentivized me to do testing and referrals, not to spend time and get to the bottom of things.”

 

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As much as Vannaman loved getting to know and care for patients and their families, she began to feel so burnt out she considered leaving medicine. She researched other models and did locum tenens work for about three and a half years, but wanted something more rooted. 

“As a doctor never trained in the business side of medicine, I never thought I would want to own my own practice,” she says. “But I realized that unless you take on the whole responsibility of the clinic, you’re never going to have the kind of meaningful relationship with your patients that you always wanted.” 

Vannaman bills patients directly each month for a bundle of services that she can provide more affordably due to her lower overhead, she says. That bundle includes virtually the full spectrum of primary care services, including all clinic visits, from preventative care to urgent care, from acute needs like wound care and joint injections, to chronic disease management. Her member patients also receive imaging, labs and prescriptions, provided at cost.

Membership practices often save patients money, Vannaman says. For example, some save more on their discounted prescriptions than they pay for the membership.

“The cost savings is certainly there, but it happens in a variety of ways,” she says. That can include services like skin biopsies, breathing treatments and EKGs, which are all included in the membership with no extra fee, as well as better overall health management that might avert irreversible or urgent conditions that can send expenses shooting upward.

 

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Although she does not take insurance, Vannaman encourages her patients to maintain a policy for catastrophic coverage so they don’t end up in financial ruin. “We have patients who have every type of insurance,” she says. “More and more people are getting high-deductible plans because they can’t afford anything else.”

It can take several years to build up the practice to where a doctor reaches his or her previous income level, Vannaman says. “The beginning can be really scary for [physicians]. In the long term, it’s going to be well worth it,” she says. 

Next: Building patient relationships

 

 

Building patient relationships

Uday Jani, MD, an internist with Shore View Personalized Medical Care in Milton, Delaware, has practiced as a solo internist since 2002, and his traditional practice had a patient panel of more than 3,000; he now serves 300 patients in a concierge practice that charges a monthly fee for services beyond what insurance covers. Concierge practices differ from direct pay membership practices, which generally substitute for insurance (see sidebar). 

“I was doing what normal physicians do, running from room to room, trying to see as many patients as I can,” he says. “You have to do that because the overhead is piling up and mounting. … It felt like it was, ‘What’s your problem?’[and] ‘Here’s the bill and let’s move on.’”

Jani started exploring membership medicine about four years ago, after seeing a patient with a combination of hypertension, diabetes, obesity, COPD and joint pain. He asked whether the patient had questions and the man said no.

 

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“I walked out of the room, and I stopped,” Jani says, realizing there must be unexplored issues. “I thought, ‘I can help this guy so much more.’” They talked about diet and exercise and other related issues for another 15 or 20 minutes.

Jani’s membership fee provides access to his cell phone, e-mail and other benefits, and he spends as much as 90 minutes on a physical exam. In addition to treating whatever issue brought a patient to him, Jani focuses on general wellness and asks questions about exercise, diet, and personal and family stress. He often recommends remedies such as yoga, tai chi and meditation in addition to medications.

“We sit and talk; patients don’t feel rushed,” he says. “It’s a better quality of life for [physicians], definitely, but the patient has to be the centerpiece. They will be healthier. If you’re thinking ‘I’m going to make more money,’ that’s not the reason to do it because that won’t happen.” 

Jani adds that the practice been a wash financially, but he’s seeing roughly two patients per hour instead of four. “Things come out that don’t come out when you’re in a rush. You find out why the patient’s blood pressure is high-because her daughter is going through a divorce [for example].”

Jani’s practice primarily attracts people like schoolteachers and bus drivers, and he doesn’t think doctors need to be in a high-income area to make a concierge practice work. “People who had to make some cuts [in spending] somewhere joined because they felt that their health was important to them,” he says. “I don’t think money is the issue.”

Those who practice membership medicine see a bright future for these practice models. “It’s the way of the future,” Wood says. “This is the only way to decrease costs and increase quality. We handle 80% to 90% of what people need on a daily basis.”