'Pseudo-Concierge' Practices

October 5, 2007
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Sick of stretching his practice, his finances and his sanity to make up for declining Medicare reimbursement and sky-high health insurance administration costs, Jason Myers, a physician affiliated with Munson Medical Center in Traverse City, has given up on the health care complex. From now on, Myers is working without the middle man.

His new practice, MembersHealth Medical Center, launched in partnership with Dr. Lorah Wright and physician assistant Kirsten Schmitt, will operate on a monthly fee of $75 per individual and $140 per couple, plus $5 for each additional family member. Just like a health club, members can make as many appointments as they desire at no extra cost. The program does not cover hospitalization or specialist treatment, but coupled with a high-deductible health insurance plan, the MembersHealth system will provide roughly the same coverage as a traditional plan, but at a significantly lower cost — for doctor and patient both.

“Looking at our practice and the way it’s been going the past couple years — having to see more and more patients and spend more and more time in the office — we said there has got to be a better way of doing this,” explained Myers, an alumni of Aquinas College in Grand Rapids and a former intern at Metro Health.

“There has to be some way we can provide care directly to the patient and cut out a lot of this middle administration cost.”

While decreases in Medicare reimbursement have had a terrible impact on his practice, Myers was equally concerned with another expenditure of time and money: managing insurance claims. After a harried 35-patient day, he consistently found himself dealing with paperwork late into the night and on weekends. And the administrative cost of the claims was a significant expense.

“It can cost a practice with a couple of physicians over $100,000 a year just to bill insurance companies,” said Myers. “That is a pretty large chunk of our overhead.”

MembersHealth is a twist on a sometimes controversial practice known as concierge medicine. In its original form, concierge medicine meant a physician had a relationship with patients in which the patients made a periodic or lump sum in exchange for preferential access. A retainer of sorts, this payment covers all normal medical expenses, but in some situations could just be seen as a membership fee, with additional charges for usage. The first such practice of note, Seattle-based MD2 (pronounced MD Squared) has a patient-to-physician ratio of 50-to-1. A family of four can receive all their required primary care for an annual fee of $24,000.

However it is set up, a concierge practice allows a physician to decrease the size of the practice from, for example, 2,500 patients to 500 patients. These patients have streamlined access to medical care, while the physician has a more manageable workload and is relieved of the burdens of Medicare and private insurance claims. These types of practices are most common in areas where there are a large number of individuals with high wealth and high medical utilization, such as Florida, Arizona, southern California or similar areas with a strong supply of wealthy retirees.

The concern is that, as these practices shrink in size, the less wealthy lose access to medical care.

“You can say that about anything,” said John Marquis, an attorney at Warner Norcross & Judd LLP in Holland who specializes in concierge medicine. “This is not going to be the right choice for everyone.”

Marquis co-founded the Society for Innovative Medical Practice Design, an association representing concierge practices and other untraditional models. Earlier this year, he testified on the practice before the U.S. Senate.

“Concierge medicine would be wiped off the map if Medicare reimbursement were increased,” Marquis said. “It is an economic reaction to the cuts. … Doctors lives have become too harried, their professional lives aren’t satisfying, and they are looking for an alternative.”

Interestingly, the second wave of concierge physicians — doctors such as Myers, a Marquis client — are not offering a “couture” service. MembersHealth markets to Medicare patients who want a more personalized level of care, to small business owners looking for an alternative to increasingly costly health insurance packages, and to the uninsured as a means of primary care.

Dr. Vic Wood runs such a “pseudo-concierge” practice out of two Doctors Urgent Care clinics in the Ohio Valley. The Wheeling, W.Va., location, made national news when the West Virginia insurance industry mounted a campaign against his Clinic-Based Health Care plan, available for a monthly fee of $83 for individuals and $125 per family.

“When I came up with this four years ago, I was looking at it as preventative care,” said Wood. “I was tired of looking into patients’ eyes who couldn’t afford health care and had a chronic disease that they weren’t going to get treated.”

Wood set up his practice, which includes X-ray services and a generic pharmacy, to serve the uninsured, with special attention to those suffering from diabetes, high cholesterol, HIV and other chronic diseases. Wood recently prevailed in the West Virginia legislature over the insurance industry, and the state is now using his program as the model for a series of pilot projects.

In Grand Rapids, a similar service is available at The West Michigan Center for Family Health. Operated by Beth Boltinghouse and Dr. John Lemke, the center charges patients a flat annual fee of $250. The center also has X-ray services and a cash pharmacy, Bill’s Pills, on site at 1425 Michigan St. NE.     HQX

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