Some physicians suffering from chronic underpayment are turning to alternative payment models to increase profits.
One such model is concierge medicine, sometimes called “retainer” or “boutique” medicine, whereby patients pay an upfront fee in order to secure the services of a physician.
It used to be that only physicians in affluent areas used the concierge model, but times have changed. Physicians with a variety of patient bases are starting to practice concierge medicine.
Could concierge be the way to go for your practice? Today we’ll look at the pros and cons of switching over to the concierge model.
More Time for Patients
This is the most frequently stated benefit of switching to concierge medicine. The upfront fee, usually monthly, allows you to bring in more revenue per patient. Because of this, most concierge physicians can cap their patient base at around 300 or so with no loss of revenue.
Concierge medicine keeps you from having to rush patients in and out of the examination room.
By charging an upfront fee, much of the billing and collections procedure can be bypassed depending on the services included with the fee. For instance, you can choose to have standard visits covered by the fee. That way, if a patient comes in a few times in one month for standard visits, only a single monthly fee is collected.
The cuts are even greater if you plan to bypass insurance entirely, as some concierge practitioners do. By having patients simply pay the fee and then pay directly per service, you can do away with coding and collections staff.
Switching to concierge medicine means your practice can be targeted to meet your community’s needs.
If you’re practicing in a high-income area, your community might be willing to pay a higher fee for the extra care and features of concierge medicine. In contrast, if you practice in a lower-income area, you can charge a low fee like Dr. Rodriguez of San Antonio who targets patients who couldn’t normally afford healthcare.
Loss of Patients
This is the primary problem with switching to a concierge medicine. Many patients are used to the standard model of healthcare, and transitioning means you risk losing these patients.
In one study, physicians switching over to a concierge model from a standard model only kept 12% of their patient base on average. The study didn’t discuss how many patients those physicians eventually gained because of the switch, but that’s still a huge initial loss to take.
Fewer Patients, Higher Expectations
Seeing fewer patients doesn’t necessarily mean more time out on the golf course. And giving patients more time with you when making visits won’t be enough to get them to pay an upfront free for your services.
Patients seeking out the concierge model of care expect to receive the added benefits most concierge practices provide. These include things like 24-hour physician access, availability for house calls and the physician’s cell-phone number.
Although you should have fewer patients, they may take up even more time requesting the special services concierge practices provide.
Risk of Pricing Error
One of the risks inherent in adding any type of fee is that you may get the pricing point wrong. And just like with any business, doing so means you’re less likely to be profitable. Your product in this case is the expert medical care you provide.
Set the upfront fee too high and you run the risk that your community looks to cheaper solutions to their healthcare needs. Set the fee too low and you still have to take in the same number of patients you do under the standard model, eliminating one of the primary benefits of switching.
As you can see, concierge medicine can take your profitability to the next level or create substantial losses. With this in mind, would you ever consider switching your practice over to the concierge model?
For additional insight into practice management, take a look at our Complete Guide to Practice Management.