Boutique Medicine- A new trend of the future?
Article published Jan 6, 2008
The doctor will see you, anytime
But he seems considerably more relaxed, sitting on a sofa in an elegant side room at his medical offices during a midday break from seeing patients.
Today he will see a half-dozen patients, spending an hour to 90 minutes with each, and take phone calls from several others.
“It allows me to work better,” Caballero said. “I think they’re getting better attention.”
Welcome to the world commonly called concierge medicine, boutique medicine or, as its practitioners now prefer, “direct practice.”
In it, doctors essentially swap a high-volume, low-margin world for just the opposite.
A study by the Government Accountability Office in 2005 is still the definitive look at the style of practice.
The agency found concierge physicians take on far fewer patients, typically less than 400, and each patient pays an annual fee, usually $1,500 but as much as $15,000, in return for unlimited access to the doctor.
The result is guaranteed revenues of at least a half-million dollars a year, and far more in wealthier areas where residents can afford higher prices.
The combination of less stress and more stable income proves alluring. While only a handful of the country’s doctors have gone to direct practice, their numbers have grown rapidly.
There are about 500 such doctors across the country, reports the Society for Innovative Medical Practice Design, which began as the American Society of Concierge Physicians.
That represents a tripling from 2004, when the GAO found only 146 in its study.
The agency traced the trend’s origin to MD2, a Seattle medical practice that opened in 1996, founded by the former team doctor of the city’s Supersonics basketball team.
Most of the practices are clustered around affluent areas: GAO found the biggest clusters in Seattle, Boston and West Palm Beach.
Caballero was Sarasota’s first direct practice. He opened Private Physician Services in October 2001. He has since added a partner.
Two years ago, two of Sarasota’s most respected doctors — and members of two of its dominant practices — opened their own boutique practice.
“We jumped at the opportunity, and haven’t looked back since,” said Dr. Louis Cohen, partner with Dr. Brad Lerner in LernerCohen Healthcare.
Others probably will follow. Doctors of at least two Sarasota practices have told patients or colleagues that they are considering charging patients an annual retainer. Both said that they have not made a final decision.
But there are powerful draws for the direct-practice approach: Fewer hassles, lower overhead, and certainly more money.
A doctor’s view
At his old practice, Cohen would start his day at 6:30 a.m. with hospital rounds, see patients in his office from 9 a.m. to 5:30 p.m., and at night sometimes be the lone doctor on call for his group’s 50,000 patients.
“Controlled bedlam,” he said. “Was it the best way to deliver medicine? No, I think absolutely not. Was it a necessity of the way medicine is practiced nowadays? Yes.”
Now he cares for 300 patients instead of 4,200. That day he had five scheduled appointments, which allowed him to spend more time with each. The smaller patient load also gives doctors more access to each person.
“We feel that allows us the ability to be there anytime the patients need us, whether it be for a house call, for a nursing home visit, an office visit, to give them the level of service that they want,” Lerner said.
With the added attention comes special services. Caballero’s Private Physicians Services and LernerCohen both have dietitians on staff and draw blood in their offices, services often handled at labs or hospitals.
The style benefits the doctors, too, in more ways than just reduced stress.
By having patients pay up front, they are essentially a cash business. They do not have to haggle with insurance companies or government programs like Medicare or Medicaid. That means they can save money — at least $100,000 per year — on bookkeeping-type expenses.
They also likely make more money, by setting their own rates instead of accepting declining reimbursements from Medicare and private insurers.
LernerCohen’s prices range from $2,800 a year to $5,800 a year. Patients over 80, who they found required much more time, pay the highest rates. Caballero’s existing patients pay $2,500 to $4,000 per year, with those 65 and over paying the higher rate.
Both practices have held prices constant for existing patients, in part by charging a higher rate for newcomers; Caballero’s is $7,500.
Doctors know the financial structure is both advantage and drawback.
“The only thing negative I can see about what we’re doing is that everybody doesn’t have the opportunity to participate,” Lerner said.
“This is a luxury item and it costs money like a luxury item. Not everybody can afford the cost of this kind of service, and insurance companies won’t pay for this type of service.”
LernerCohen and other concierge practices urge patients to maintain their insurance or Medicare coverage. Medicare does not pay for concierge physicians’ fees, and by law the doctors cannot “double-dip” by billing Medicare. Concierge physicians’ fees cover only the primary doctor’s services and pay neither for specialists nor for hospitalization.
But multiply fees by patients, and a concierge practice can easily generate $1 million or more in revenue a year.
That has drawn scrutiny from the American Medical Association and the ire of some doctors.
Another doctor’s view
Dr. Randy J. Silverstine has worked 60- to 80-hour weeks in Sarasota since 1982, earning incomes in the low six-figure range, he said.
His patients have included cabdrivers, professors, retired doctors — and, lately, many people who could no longer afford their doctors, he said.
So he views concierge medicine and its potential million-dollar revenues as “unprofessional, unethical and a spectacular show of greed,” he said.
“It’s wanting to work less and make a phenomenal amount of money,” he said. “It’s not a solution for health care in this country. It’s health care for the rich and famous.”
Those questions have swirled around concierge medicine almost since its outset, and practitioners are well aware.
In 2001, the American Medical Association voted to study the issue, and its Council on Medical Service returned with the same answer: “A multitiered system of care already exists in the United States.”
The council saw no ethical problems with the concierge approach, pointing to established AMA policies that say doctors have the right to set up their practices as they want, and charge a fair fee established in a patient contract.
It also said there was “no evidence that special physician-patient contracts, such as retainer agreements, adversely impact the quality of patients’ care or the access of any group of patients to care.”
In fact, the council said the issue was overblown. “It would appear that the amount of media coverage devoted to the subject has been disproportionate,” the report said.
But it did cite what it termed “risks” associated with concierge medicine: that smaller patient loads might dull a doctor’s skills, and that doctors switching to a high-fee practice might leave some patients without care.
That was at the heart of Silverstine’s lament.
“After developing real, meaningful, beautiful, caring relationships with many patients and their families, how do you turn around and demand they now begin paying 5 to 10 thousand dollars per head?” he asked.
“Just because something has a price doesn’t mean it’s right, doesn’t mean that it works or it’s good for the profession or for the patients.”
Some pay nothing
Concierge physicians are trying to counter that perception.
At Caballero’s practice, 20 percent of the patients pay nothing for care, he said.
Before a reporter’s visit, he had given one such “scholarship” patient a 90-minute annual physical.
“We do it because it makes sense, but we also feel a need to work with the community,” he said.
As a medical student, people invested in him — for example, letting a novice draw blood and practice procedures.
“The community invested in me; I owe something back,” he said.
LernerCohen does much the same. “A significant percentage of our practice are completely scholarship, or at a reduced cost, because we felt an obligation,” Lerner said. “We anticipated that would be a knock, and this was our way to respond to it before it became an issue.”
They also contend that concierge practices can produce better results because they have more time to learn about their patients.
“The level of involvement and the level of care and the level of knowledge that goes between patient and physician is infinitely higher,” Cohen said.
Doctors with smaller patient loads can practice more preventive medicine, catching small problems before they become expensive ones, Lerner said.
Not necessarily less work
But fewer patients does not mean less work, they contend.
“This is not an easy job,” Lerner said. “We are each taking our own phone calls 24 hours a day, seven days a week. Every patient has access to” each doctor “literally around the clock.”
Not every doctor wants to be in that position, he said.
Nor can every physician attract hundreds of patients willing to pay thousands of dollars a year that they did not have to pay before.
“You can’t just hang up a shingle as an unknown quantity in a town like this and expect to succeed in this type of practice,” Lerner said.
He and Cohen have practiced medicine in Sarasota for more than two decades, both of them founded prominent practices and both have been chief of medicine at Sarasota Memorial Hospital.
Caballero practiced in Sarasota for only six years before starting his concierge practice but carries an impressive resume, including Stanford Medical School and residency at Harvard-affiliated Brigham and Women’s Hospital.
About 100 of his 4,000 patients followed him to his concierge practice. Lerner and Cohen started with about 300 patients, a similar percentage of their original practices.
But patients who make the switch appear to be pleased. Caballero claimed 99 percent retention and a long waiting list. Lerner and Cohen declined to comment on their retention but said they balance any attrition with new patients.
Not all such practices last. In 2003, Dr. Tony Trpkovski started a concierge practice in Venice, reportedly spending $300,000 to outfit the offices. He later closed it, worked for a time at a Venice-area clinic and is now practicing at the Kauai Medical Clinic in Hawaii. He did not return calls seeking comment.
Still, the transition is becoming easier, in part because of a fast-growing Florida company that claims concierge medicine produces better results.
The concierge playbook
Boca Raton-based MDVIP has essentially franchised concierge medicine for seven years, making it easier for physicians to transition to the concept.
The privately held company now bills itself as the national leader in “personalized and preventive health care.”
“It is not enough to just put a toll booth at the practice’s door,” said Dr. Edward Goldman, MDVIP’s chief executive.
Now the company stresses its resources for disease prevention, such as its affiliations with the Mayo Clinic, Cleveland Clinic, Memorial Sloan-Kettering and other name institutions.
It also promotes its comprehensive “MDVIP physical,” which concentrates on a risk factor assessment as well as a battery of tests. The idea is to head off illnesses before they start, as opposed to spotting them via tests like mammograms and prostate-specific antigen checks.
“That is not prevention; that is early detection of disease,” Goldman said. “Let’s look at your potential for illness. We don’t want the pilot to get to 30,000 feet and find there’s an engine knocking. Let’s check it on the ground.”
The prevention emphasis pays off, he said. MDVIP claims that its doctors’ patients were hospitalized 65 percent less frequently than Medicare beneficiaries in 2005, and 85 percent less than commercial insurers’ patients. The statistics could not be independently confirmed.
MDVIP has grown to a network of 190 physicians and 65,000 patients, up from 154 physicians a year earlier — not bad, considering the company rejects 80 percent of doctors who apply, Goldman said.
The company’s president, along with about 100 direct-practice physicians, turned out recently for the Society of Innovative Medical Practice Design’s annual conference, outside of Washington, D.C.
Speakers including Newt Gingrich, former speaker of the House of Representatives, led a roster of experts in preventive medicine, information technology and health care finance.
Society President Chris Ewin said a more widespread acceptance of direct practice medicine could break physicians’ dependence on Medicare and private insurance — something he and his colleagues already enjoy.
“Some of us will never work for the government or the insurance industry again,” he said.
I am all about introducing fresh ideas and throwing out alternatives to those who are suffering within the burning hell of the current American medical system. Particularly, for those in primary care (God bless their souls), imagine seeing less patients and spending more time with each? Not only that, but just think of the decreased amount of paperwork, the freeing of oneself from HMO’s, and all the while preserving your income! Sounds like medical nirvana doesn’t it?