[Editor’s Note: I have lots of requests for posts on owning, managing, and selling practices. Lots of docs, particularly in primary care, are experimenting with direct patient care or concierge style models these days in an effort to retake control of their lives and practices, provide better patient care, reduce burnout, and maybe even increase their income.

The following guest post about these models was submitted by Cameron, “a physician advocate”. His full name, the name of his company, his company’s and the link to the company were removed after publication when the post was found to be in violation of our guest post policy, having been previously published elsewhere.]

There’s one question physicians, and practice owners ask themselves above all others:

How can I continue to practice medicine with the low and inconsistent reimbursements rates my practice gets from the insurance companies?

First, find a reputable company to negotiate the insurance payer reimbursement rates for your practice. Most practices neglect this, but if you haven’t negotiated your rates in the last 18 months, you’re leaving money on the table, missing out on short and long term profits, and limiting your options.

Switch to a Direct Care or Concierge Practice Model

Second, is to switch your practice to a direct medical care or concierge medicine model. Concierge and direct care practices minimize or eliminate the headache of billing and collecting from insurance.

It’s true that the transition is a large undertaking, which is why you want to first negotiate higher rates with the payers, so you have more income to help you transition. The results allow many physicians to focus on patient care, improve their income, avoid burnout, and lessen their administrative burden.

The trick to switching to a concierge or direct care mode is to convert your practice strategically and know what questions you’ll need to answer:

concierge medicine

What’s the Difference Between Concierge and a Direct Care/Primary Care Practice?

Patients and health care providers often regard a Concierge practice and Direct Care practice as the same thing when, in fact, there are a few differences:

Direct Care Practices

  • Patients pay a monthly fee directly to the provider
  • Most DC practices often only offer primary care (Direct Primary Care)
  • Fees cover longer appointments, labs, managed care, and coordination with specialists
  • Usually, don’t accept insurance or reimbursement from government plans
  • Allows the practice to have more predictable income and expenses

Concierge Practices

  • Most require their patients to sign an annual contract with fees that are higher than DC practices but include more access to the provider
  • Patients are often given physical exams and screenings that are far more in-depth than the typical annual physical or specialist visit
  • Concierge practices often continue to accept insurance payers/government plans and bill them when applicable
  • Fees are often higher than DC practices

There are other differences, but it boils down to the fact that Direct Care is usually only Direct Primary Care practices, and Concierge practices offer more premium care at a higher price. Direct care and concierge models are possible with many specialties; particularly for patients with a chronic condition, including endocrinologists for diabetic patients, urologists for erectile dysfunction, and OB/GYN for pregnancy. Almost every specialty can adapt to this model.

6 Questions Asked About Transitioning to a Direct Care or Concierge Medical Practice Model

#1 Will Practice Costs Go Down?

One of the biggest attractions of the direct model is that physicians no longer need to bill and collect from insurance payers. The amount of time and overhead spent on billing and collecting from insurance companies is enormous. Physicians spend, on average, 15% of their total revenue on billing and collecting. Concierge and direct care practices spend very little time or money on the patient collections process, as most practices charge the patients credit cards every month. Removing the insurance payer, coupled with a lower cost to collect, allows concierge physicians to earn a higher income and give patients better access to care for less money.

#2 Do I Need to Attract Only Wealthy Patients?

This is a common myth about concierge medicine that needs to be debunked. Inexpensive subscription-based models can be both affordable for a patient and offer a great salary for the physician.

#3 Can My Practice Convert Our Medicare Patients?

This is a tricky question. Medicare allows physicians to contract with patients to provide service privately, but the physician needs to opt-out of Medicare. They may not return to Medicare for a period of two years and cannot bill Medicare for this duration for any Medicare beneficiary. Try to approach Medicare patients with the understanding that it pays relatively well compared to commercial plans. That certainly isn’t always the case, but many physicians feel that the current payment rates and the ease of billing Medicare means that they continue to see Medicare patients even with a concierge practice.

#4 What Role Will My Existing Insurance Plans Play in the Process?

If you have the financial ability to start from scratch and drop all your contracts, great, most physicians don’t have that luxury, which is why negotiating your payer rates is essential. The best approach is to convert slowly and strategically, and higher rates allow you to do that.

Review the lowest paying contracts as they may be costing you money or barely breaking even. Complete an analysis of your hourly overhead (fixed and variable) to see what you are earning under your contractual rates. If these contracts aren’t making a profit, consider converting these patients to concierge patients.

#5 How Can I Convince My Existing Patients to Make the Transition?

Patients with high deductibles are starting to understand that more of their healthcare will need to be paid for out-of-pocket. Still, converting patients to concierge medicine takes some patient education. Physicians need to communicate to their patients the added benefit of paying a little extra for better access, same-day appointments, shorter waiting times, and other premium care. You will need to examine your marketing strategy to promote your new practice and attract new patients in addition to converting existing patients.

#6 What Changes Would I Need to Make to My Practice?

The most significant change you’ll need to make is with improving your customer service. Concierge patients will expect extra services such as same-day appointments, shorter waiting times, and better physician communication and accessibility.

A concierge and direct care patient demands a higher level of customer service from your staff.  Utilize technology to satisfy concierge patients’ expectation of better accessibility to their physician. Purchase a HIPAA compliant system that allows telemedicine and patient interaction – the ability for a patient to email their physician means less unnecessary visits.

It might be daunting to think of transitioning to a new model, but ultimately, Direct Care and Concierge models are the future of healthcare. They result in a better income for practices, better care for your patients, and the opportunity to practice medicine without the headaches of the insurance companies.

What do you think about Direct Care and Concierge medical practice models? What are some of the pros and cons? Would you consider the transition? If you have transitioned to Direct Care or Concierge medicine, what have you learned in the process? Comment below!