This article originally appeared in Modern Medicine.
It’s crunch time. You can feel the accountable care organizations, the Patient Protection and Affordable Care Act, e-prescribing and electronic health record noncompliance penalties, increasing overhead, and regulatory oversight breathing down your neck. Bottom line: The big payers call the shots.
You could sell your practice, go to work for a hospital, increase ancillary services, retire, or bury your head in the sand. Another option is to imagine escaping complexity by contracting directly with, and working directly for, the patient; practicing your best medicine; improving your lifestyle; and diversifying your revenue stream.
I converted my internal medicine practice to concierge medicine and never looked back. Could concierge medicine be right for you?
Around every corner lurks the daunting likelihood of increasing overhead with stagnant or declining pay. Seeing these prospects several years ago, I weighed the options, analyzed my practice, and then made the move to concierge medicine. In this economy, I realized a large income increase and decreased hours worked per week, all while practicing better medicine and maintaining business control in a simplified, smaller practice.
In a concierge medical practice, patients contract directly with the physician for noncovered services by paying an annual fee to the doctor. The physician may bill insurers for covered services, augmenting membership revenue.
With satisfied patients paying doctors directly, insurance revenue becomes less important. Eighty percent of concierge medicine practices still bill insurance. Diversifying your revenue stream by making insurers a minor stakeholder presents you with pleasant options. If one of your insurance contracts decides to go south, it’s not a big loss. You may increase your annual membership fee to offset the declining insurance revenue if you wish.
In my case, appreciative patients directly pay me two-thirds of my revenue. Insurers contribute one-third. The insurance third is diversified across numerous private and government payers. If an insurance contract becomes less favorable, I needn’t develop balance sheet anxiety, because I have diversified my revenue stream.
What’s the catch? There isn’t one for me, because I enjoy doing what my patients value: taking good care of them.
To thrive in concierge medicine, you need to establish a solid reputation for providing high-level care. Remember that concierge medicine is value-based and consumer-driven. Only patients seeing value sign up with you. Hence the catch: You must provide patients rock-solid value.
Are you up for the challenge? Is concierge medicine right for you at this time?
The answer probably is yes if:
- You practice high-quality medicine.
- You don’t mind working hard for your patients.
- You can persevere through the conversion process.
- You tolerate a certain amount of business risk.
Remember, in any service business, payers call the shots. In medicine’s current scheme, insurers set doctors’ rules and, in turn, answer to many constituents. Physicians and patients often feel shortchanged. Today’s primary care doctors, likewise, serve many masters. In concierge medicine, patients contract directly with physicians, cutting through these layers. The doctor simply answers directly to the patient.
As practicing medicine becomes increasingly, needlessly complex, it may be time for you to consider converting to concierge medicine.