Whether to switch to a concierge practice is weighed.
Q: I'm a solo family doctor and I am interested in switching to a concierge practice, but I'm not sure it's the right move. What do I need to consider?
A: As reimbursements from Medicare, Medicaid and traditional insurers decline and the costs of running a medical practice soar, more and more physicians are considering converting to a concierge-style practice, also known as a boutique or direct medical practice.
Under this business model, doctors charge patients an annual fee (or retainer) to be a preferred patient within the practice, entitling the patient to additional access that may include longer visits, same-day appointments, off-hours access and, in some cases, home visits. Oftentimes, doctors even give preferred patients their cell phone numbers and personal email addresses.
First of all, do you have a busy practice that is overwhelmed by the current volume of patients? Are there long waiting times for appointments? Are you concerned that care is already suffering because of the number of patients you must see every day in order to meet expenses? If so, converting to a boutique practice may be the answer.
You should also consider the financial status of your patients to determine if they can support the fees associated with a boutique model. A quick analysis of your accounts receivable may provide an indication of whether your patients are struggling to meet their current commitments. Additionally, you should research the median incomes associated with your patients' professions.
You must also ask yourself if you are honestly willing to commit to providing the greater access that patients expect from a concierge model, including possibly limiting the number of patients you will accept in order to deliver the individualized attention that is required. If your patients are merely paying a fee for the same level of service they received before the conversion, loyalty will suffer.
Before embarking on a transition, you should engage in an open dialogue with your staff to see if they share the desire to "go concierge." You should consider amending or revising your current corporate or operating agreements to plan for what happens if the practice transitions to a concierge model.
You should also consult with legal counsel about drafting a patient agreement that details the amount of your annual patient fee and specifically what services are included. Other regulatory and legal issues, including Medicare compliance, should be analyzed by your attorneys. They can provide you with relevant guidance.
One alternative that some groups have pursued is a "hybrid" model in which patients can choose the practice type that works best for their needs. A hybrid model, however, does not come without its challenges, including the awkwardness that can result when you have to explain to nonconcierge patients that they will have a different level of access.
Answers to readers' questions were provided by Allison Farey, Wells Fargo Practice Finance, Emeryville, California, and Jonna Daleiden Eimer, Much Shelist, Chicago, Illinois. Send your practice management questions to firstname.lastname@example.org