Will ACA be a boon for concierge care?
■ Proponents of the model say rising patient demand will prompt more consumers to seek personalized care, but some conflicts with health reform rules might arise.
By Jennifer Lubell — Posted April 15, 2013
Mark Niedfeldt, MD, a family physician who practices concierge medicine in a Milwaukee suburb, is fairly certain he'll gain new patients when the Affordable Care Act's main coverage provisions go into effect in 2014.
Clients who recently joined the practice tell him, “I figure I should get in now because you'll be full, and I wanted to make sure I had a concierge doctor,” said Dr. Niedfeldt, who runs a traditional retainer practice for individuals as well as a corporate option that offers eligible employees concierge-level primary care. He also sees sports medicine consults. Many of the new patients are business owners themselves, “so they know what's coming,” he said.
Dr. Niedfeldt said the new patients are simply doing the math. An estimated 30 million additional patients will enter the insurance system starting in 2014, and based on the fact that many primary care doctors are nearing retirement age, consumers know there are going to be fewer physicians to treat them, he said. He has about 400 patients but is not quite at full capacity.
In concierge medicine, patients agree to pay an annual retainer fee in return for more personalized primary care services and better access to the practice. These physicians typically limit the number of patients they see to several hundred, and they don't always accept insurance, although some continue to participate in Medicare or with commercial payers.
In Dr. Niedfeldt's practice, individuals pay an annual retainer fee of about $1,800. But because he doesn't offer more complex medical services, such as surgeries or cancer treatments, his clients may decide to carry high-deductible secondary coverage to pay for that care.
An increasing trend
Concierge medicine makes up a small but growing percentage of medical practices. The American Academy of Private Physicians, which represents concierge and direct care health professionals, estimates that there are more than 3,500 concierge physicians.
In surveying thousands of physicians for the nonprofit Physicians Foundation, Merritt Hawkins, a national consulting and search firm in Irving, Texas, recently reported that about 7% of respondents said they were planning to transition to concierge or cash-only practices in the next one to three years.
The model of care has its critics. Because the practices charge fees to maintain smaller patient bases, they have come under fire for their potential to limit access to care only to those who can afford them, possibly creating a two-tiered primary care system. The American Medical Association has taken a cautionary approach to the model, adopting policy that the practices “raise ethical concerns that warrant careful attention,” especially if they ever became widespread to the point of affecting access.
But the face of concierge medicine is changing along with the health system, said Mark Smith, president of Merritt Hawkins. It's becoming more diverse, appealing to patients of different income levels and personal circumstances. “In the beginning, I think the marketing of these services were more to an elite group,” but over the years the model has evolved to a point that it varies widely in terms of what it costs patients and the types of people it attracts, he said.
On one end of the spectrum might be the corporate executive who pays $25,000 a year for a personal physician. At the other end might be the direct primary care practice, which charges a modest monthly fee in return for unlimited primary care services.
With so many practice models available, as well the market changes caused by health system reform, Smith predicts a growing interest in concierge medicine “and a larger number of physicians wanting to convert to the model. I think ACA is what's going to take concierge care to the next level.”
Attraction for doctors and patients
Some patients see retainer practices as a way to improve their health care situations in the wake of health reform. Smith, who owns a home in Florida, said he knows of Medicare-age people there who joined a concierge practice because they didn't see the ACA's provisions boding well for access to their primary care physicians.
Health reform puts tens of millions of people into a system that's already at capacity, he said. “I can see a big pushback in the market, because people expecting to sign on to Medicaid are going to assume they have insurance. I would correct them in saying: You have an insurance card, and that type of insurance does not guarantee you access.” As it is now, people on Medicaid — and some on Medicare — have a difficult time being seen. Some doctors have limited the number of those patients they see because public payers are not financially viable for them, he said.
These factors could persuade more doctors to convert their practices to concierge medicine, said Joshua Kaye, a partner in the health care practice of global law firm DLA Piper. Many physicians already are at capacity, and an influx of newly covered patients only will strain their workloads further.
“That's one of the key drivers of why doctors convert to a concierge practice,” said Kaye, who co-chairs his firm's health care sector. “They don't feel they are practicing in the manner in which they ought to be in terms of understanding the patient. Many of these doctors want to slow down the pace.”
But the model is not for everyone. Fred Ralston Jr., MD, an internist in Fayetteville, Tenn., said he isn't interested in making the switch. Although the past president of the American College of Physicians understands why some doctors, worn down by the stresses of dysfunctional payment systems, are opting for concierge practices, that's a move he never will make.
“I feel too connected to my patients and community to in effect downsize when there is nowhere else for those patients to go,” Dr. Ralston said, speaking for himself. Instead, his practice has been transitioning to a patient-centered medical home. “We feel this is the best long-term approach for many of our current medical challenges,” he said.
Individual practices' decisions won't be the only factor driving the evolution in concierge medicine. Payment reforms that base rates on keeping patients healthy are driving hospitals and health care systems “to try and have as much market share and capture as much of the health care delivery system as possible,” Kaye said. Many of these systems have become interested in acquiring physician practices and employing doctors. “One of the branding differences a lot of health care systems are looking to offer is the ability to offer concierge medicine,” he said.
The potential impact health system reform will have on employer-based coverage also is a major consideration. The way the system is structured, employer-sponsored plans are paternalistic, covering roughly 80% of the costs with the employee covering 20%. “And while that 20% is still fairly significant, it's still not significant enough to impact where and how an employee receives their health care,” Kaye said.
A number of employers, however, are rethinking that approach. The fact that larger businesses will be required to cover all workers starting in 2014 or pay penalties probably will raise costs for many of them, he said. Some companies might require employees to take on a greater burden of their health care costs.
“At some point, when the employee becomes more responsible for their health care, I think the question of concierge medicine is going to be a major driver in terms of how employees select their health care,” Kaye said.
Some practices may conflict with ACA
Even with these potential new opportunities, concierge practices that accept insurance payments could face some compliance problems if the services they offer for an additional fee already qualify as services that the ACA requires insurers to cover. A similar situation already occurs with Medicare, Kaye noted.
Medicare prohibits health professionals from charging a beneficiary extra for services the program covers. The ACA's creation of the annual wellness visit for Medicare beneficiaries brought into question whether a concierge practice still could require patients to pay out of pocket for an executive-level physical, which is very similar to the annual wellness visit.
In these instances, doctors “want to have their cake and eat it too by continuing to participate in Medicare and attend to Medicare beneficiaries while also offering a concierge-style medical practice,” Kaye said. As a result, retainer practices may want to revisit their models to make sure they're complying with applicable Medicare laws.
Timothy Jost, a professor at Virginia's Washington and Lee University School of Law, said the same issue may come up with ambulatory health services, which are considered an essential health benefit that many insurers must cover under the ACA. If this required package of services effectively is what a concierge physician is providing for an annual fee, then the question becomes why the patient is paying more out of pocket, he said.
Exactly how essential health benefits are defined in each state could determine how this conflict is addressed, Jost said. It's possible that the personalized services concierge doctors provide “can be described in such a way that they are not [essential health benefits] and that people are willing to pay for them, and the regulators are willing to accept them as services that are not covered.”
Kaye said it remains to be seen whether essential health benefit services will overlap with the type of executive physicals that typically are offered by concierge practices and whether the ACA will prohibit a physician who accepts insurance from charging a separate fee for those services, Kaye said. These are the issues concierge practices need to consider in structuring their programs for 2014 and beyond.
Nancy Falk, MD, a general internist who runs a solo concierge practice in Chevy Chase, Md., said she doesn't see the ACA applying to her, because she stopped accepting all forms of insurance a while ago, including Medicare.
While she charges a yearly retainer fee of $1,500 for her concierge patients, she continues to see other patients on a fee-for-service basis and at times offers them reduced rates. “I usually work with people to see what they can afford,” she said, especially some of the patients who have been coming to see her for many years.
What eventually may happen is the federal government starts requiring physicians to see a certain number of covered patients, either those on Medicaid or those insured on private plans through the ACA's health insurance exchanges, to maintain their medical licenses, Dr. Falk said. “I see that coming down the road, because otherwise there's going to be lot of people walking around with an insurance card who can't a find a doctor who will take care of them.”