Wealthcare’, or a return to basics of health care?

Retainer/’concierge’ medicine growing trend

Critics call his practice "boutique medicine" or "wealthcare," but the way Michigan physician John Blanchard, MD sees it, he and his partners at Premier Private Physicians are putting control of health care back in the hands of their patients.

Blanchard and a growing number of other general practitioners are treating patients who pay the physicians from $65 a month to more than $1,500 per year for the privilege of not having to wait to see their doctors; controlling what tests, procedures or medications they want (or don’t); and — the greatest luxuries of all — house calls and 24-hour phone access.

In essence, the physicians are on retainer, much as clients would contract with an attorney or accountant who is paid a retainer. And while the number of patients signing up indicates there are plenty of people in the United States who are willing to pay a price for more personal attention, there are also critics of this type of health care delivery. Blanchard serves as president of the national Society for Innovative Medical Practice Design (SIMPD), an association of physicians whose practices are based on retainer, retail, or cash pay models that was formed by the merger of the American Society of Concierge Physicians and the Charleston, SC-based National Organization of Retail Medicine. Blanchard estimates there are approximately 200 physicians in the United States who are running their practices this way.

"Essentially, health care is not subject to free-market forces," says Blanchard, whose practice has offices in Clarkston and Grosse Pointe Woods, MI. "Two competing primary care physicians are not really competing with each other. They sign up with an insurance company, and they get all these patients. But the competition is at the insurance level, not at the provider level.

"So what happens is, you drive down quality and drive up cost. A free market drives down cost and drives up quality."

As is often the case in medicine, Blanchard, as a young physician, found himself unable to deliver the kind of care to his patients that he’d dreamed of as a medical student. The third-party pay system, he says, took the practice of medicine away from him.

"The reality of insurance-related issues pressured us to see more patients, while spending less time providing quality medical care," he says. "We, like our patients, were dissatisfied with the assembly-line approach to health care. We wanted to take the time to thoroughly assess our patients’ medical history, explore their current health issues, and develop an all-inclusive program to facilitate optimum health. The system, however, was concerned with patient volume, not patient satisfaction."

Blanchard points out that 100 years ago, and even into the 1940s and 1950s, patients had relationships with their physicians that were lifelong and personal. Family physicians knew their patients and provided what they needed, when they needed it. And patients paid physicians directly for their services.

But today, he says, the relationship between patients and physicians is almost adversarial, and he blames that on our system of health insurance.

"Basically, there’s this big bucket of money that insurance companies hold. And over time it has increased in size, and in health care, whoever is savvy enough to extract money from the bucket, wins," he says. "For the insurance companies, the motivation is to offer the most coverage for the least amount of [patient] premiums, combined with restricting access to those covered services, and the physician is forced into the middle."

That arrangement doesn’t work in favor of physician-patient relations, because it causes the patient to get mad at the doctor and the doctor to be unable to always provide the best possible care to his or her patient, Blanchard claims.

Paying for the health care they want

Critics say, for doctors to return calls promptly or at odd hours should be just a routine part of health care, not a paid "extra." Also, questions have arisen about what happens to those patients who can’t or won’t pay their primary care physician the retainer fees when he or she converts a traditional practice to a concierge practice.

Proponents of the idea say getting out from under the thumb of third-party payers means physicians are free to cut their patient load back, charge lower fees, and have the time to give patients the attention and time they agree are deserved.

Some retainer practices accept insurance for covered expenses, and the monthly or annual fees charged to patients are for perks such as no-wait appointments, ready access by phone, and house calls.

Other practices refuse insurance altogether, and patients pay for all medical expenses in addition to the retainer fee.

As to the expense for all this personal attention, Blanchard points out that many people who do not consider themselves wealthy might be surprised at the money they spend on items or services less critical than health care.

"There are many people out there spending $90 or more every month for a cell phone, and $3 a day on lattes, which amounts to about $100 a month," he says. "Most fees charged by practices like ours don’t add up to even that much."

Those who can’t pay still need care

Still, not everyone wants retainer care, nor can everyone afford it, and the American Medical Association recognized the dilemma this poses when a traditional practice converts to retainer care. In its 2002 Council on Ethical and Judicial Affairs report on retainer medicine, the AMA points out that it has always been the responsibility of physicians to provide care to those who cannot afford it.

"If a practice switches from regular, insurance-paid care to retainer care, and low-income patients can’t afford to sign on, does that create a burden for the patients?" the report states.

Blanchard says retainer practitioners build subsidized care and free care into their practices, to maintain their ethical responsibilities to render care to those in need.

The AMA’s position is, because the conversion of an existing practice to a retainer practice forces some patients to seek new physicians and establish relationships with them, physicians converting their practices must facilitate the transfer of the patients to new physicians and ensure a smooth transition of care. Physicians are required to transfer departing patients’ records to their new providers at no charge.

"Costs in concierge care are going down, and our patients are surprised at how much we can do for how little," says Blanchard. "If people can’t afford my practice, they pay what they can afford. So there is some percentage of these [retainer] practices reserved for subsidy and free care."

Is there an ethical dilemma?

The AMA, in its guideline on retainer medicine, has determined that such practices "appear to be consistent with a system based on pluralistic means of financing and delivery of medical care." Under AMA principles of medical ethics, physicians are "free to choose the environment in which to provide medical care" and, except for emergencies, are free to choose their patients.

The AMA urges that a retainer provider not present the arrangement as a way to more or better diagnostic and therapeutic services, however. The standard of care cannot be based on a patient’s ability to pay, so a discrepancy in the quality of medical decisions in a mixed practice (in which the provider treats retainer patients and insurance-only patients) "would be particularly condemnable," the AMA guidelines state.

On the other hand, the AMA points out, it is possible that the personalized attention and patient satisfaction that could result from a retainer arrangement could lead to better patient-physician communication and patient compliance, which could improve outcomes in certain cases.

The response from insurance companies has been mixed. Some networks are including concierge practitioners in their network of providers (still, only paying for regular, covered expenses). Others have determined that the idea of retainer contracts is in opposition to their mission to provide health care to as many people as possible and for member physicians to accept new health plan members without restrictions.

But practitioners must be alert to the dangers of billing Medicare patients for services already covered by Medicare. The U.S. Department of Health and Human Services Office of Inspector General (OIG) issued a warning in 2004 reminding physicians of the liabilities they could face if they request any other payment from Medicare patients for covered services.

"Participating providers may also, of course, charge beneficiaries for any Medicare deductibles and coinsurance without violating the terms of their assignment agreements," says Dara Corrigan, JD, a Washington, DC-based attorney who was acting principal inspector general when the alert was issued. "If participating physicians decide they want to charge patients additional fees, they should be mindful that they are subject to civil money penalties if they request any payment for already covered services from Medicare patients other than the applicable deductible and coinsurance."

The OIG in 2004 alleged that a physician committed just such a violation when a retainer contract asked patients to pay an annual fee of $600. Among services offered under this contract were the coordination of care with other providers, a "comprehensive assessment and plan for optimum health," and extra time spent on patient care — all of which the OIG deemed were already covered by Medicare. The physician agreed to pay a settlement amount to OIG and to stop offering the contracts to his patients.

Specialty practices employing the idea

A handful of specialists, including cardiologists, dermatologists, and obstetrician-gynecologists, have begun incorporating the idea of retainer medicine into their practices.

Blanchard says some specialties are more suited than others for the retainer models. Because they often see patients only on a referral basis and only for short periods of time, a retainer contract would be difficult to design and sell. Others, like cardiologists and obstetricians, know they will see patients for a longer time and can incorporate the concierge model into their practices.

Michael Blau, JD, a Boston-based health care attorney who has helped some specialists design retainer practices, said specialists rely on a "practice within a practice," a two-tier arrangement that allows them to take referrals and consult with primary care physicians and others, with the traditional insurance reimbursement, and to establish retainer arrangements with patients who are longer term.

Blanchard says retainer-based practices "are a tiny, tiny part of the whole health care system, hardly a blip on the radar."

"You can’t predict the future, and the future of this type of practice depends on the future of health care in this country, but the idea is to restore the traditional physician-patient relationship. I think it has the potential to offer a level of service head and shoulders above what people can get in the traditional health care setting."

Sources

  • Howard Markel, MD, PhD, Center for the History of Medicine, 100 Simpson, Box 0725, Ann Arbor, MI 48109.
  • John Blanchard, MD, Premier Private Physicians, 6483 Citation Dr., Suite B, Clarkston, MI 48346. Phone: (248) 620-1400; fax (248) 922-3327. Web site: www.premiermd.com.
  • Michael Blau, JD, Partner, McDermott, Will & Emery, 28 State St., Boston, MA, 02109. Phone: (617) 535-4010. E-mail: mblau@mwe.com.
  • Dara Corrigan, JD, Partner, Arnold & Porter, Washington, DC. Phone: (202) 942-5508. E-mail: Dara_Corrigan@aporter.com.
  • Society for Innovative Medical Practice Design Web site: www.conciergephysicians.com. E-mail: info@simpd.org.
  • U.S. Department of Health and Human Services, Office of Inspector General, OIG Alert, March 31, 2004. "OIG Alerts Physicians about Added Charges for Covered Services." Web site: www.oig.hhs.gov/fraud/docs/alertsandbulletins/2004/FA033104AssignViolationI.pdf.