News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Patients using a concierge medicine practice expect to pay cash at the time of service, but few medical laboratories are equipped to collect from patients at time of service

One big challenge for clinical laboratories and anatomic pathology groups is how to adapt to the changing role of the consumer in healthcare. It a major goal of healthcare policymakers to have patients pay more out of pocket for clinical care so as to motivate them to select hospitals, physicians, and clinical labs based on a combination of cost and quality.

One sector of healthcare that is benefiting from this consumer-first dynamic is concierge medicine. Statistics show that recent increases in the number of people seeking concierge medicine is changing the way many individuals utilize the healthcare system in the United States.

Cash for Services in Advance: A Problem and Opportunity for Clinical Labs

Concierge medicine—also referred to as boutique or retainer medicine—is an arrangement between physicians and patients where the patient pays a flat membership fee for basic medical services, such as annual physicals, preventive care, basic health screenings, and routine visits for minor issues. In this model, patients usually have to pay cash for provider services in advance.

Membership fees for access to concierge physicians typically cost between $130 and $150 per month. This is typically a supplement to traditional health insurance. Menu-style pricing structures for additional services and tests, like clinical laboratory tests and X-rays, also are paid by the patient up-front. This represents both a problem and an opportunity for medical laboratories. It is a problem because most labs are not set up to collect cash from the patient at time of service. It is an opportunity because these patients expect to pay at time of service and thus the lab not only gets paid up front, but it saves the administrative costs of not having to submit claims to a health insurer.

Concierge Medicine an Advantage for Doctors and Patients

The concierge medicine model can be very advantageous and attractive for both doctors and patients. A traditional primary care physician in the United States maintains between 2,000 and 4,000 patients, usually seeing 25 or more patients every day, according to the American Academy of Private Physicians (AAPP). This is an organization that represents concierge practices. Due to this high volume of patients, appointments are often limited to 15 minutes or less, wait times are high, and even getting an appointment can be extremely difficult.

In contrast, concierge physicians usually have about 600 patients and treat six to 10 patients per day, according to AAPP. The lower patient volume enables doctors to devote more time to the medical needs of each individual. This extra attention allows concierge physicians the ability to establish trust and rapport with their patients, and administer innovative and comprehensive care focused on overall health and wellbeing.

Because fees are paid directly to doctors on a cash basis, there is no need for insurance companies to become involved in the payment process. This structure reduces overhead and administrative costs and alleviates the issue of delayed reimbursements to physicians. It is this fact that makes concierge medicine attracting to an ever-increasing number of physicians.

According to Concierge Medicine Today, the concierge medicine method of billing patients directly could reduce physician shortages nationwide. (Image copyright: Concierge Medicine Today.)

According to Concierge Medicine Today, the concierge medicine method of billing patients directly could reduce physician shortages nationwide. (Image copyright: Concierge Medicine Today.)

Longer Appointments and Better Access to Physicians

Patients also benefit from using boutique medical services. In addition to receiving a higher level of personalized care via longer appointments, they are usually guaranteed an appointment within 24 hours. Doctors are available to answer questions and give advice during all times of the day as a fundamental component of paying the membership fees.

Patients have direct access to their physicians via telephone, e-mail, and social media. Concierge doctors also provide valuable insight, coordination, and assistance when a patient is referred to a specialist or needs to be admitted to a hospital.

Patients can still use their traditional insurance for medical testing and costs associated with seeing a specialist. However, if a patient is paying cash for additional services, a concierge physician will often negotiate with labs to secure discounts for their patients.

Traditional Health Insurance Compatible with Concierge Medicine

Having a concierge physician does not completely alleviate the need for health insurance. But, some patients may save money by utilizing retainer medicine in addition to traditional health insurance. Many members of current insurance plans never meet their high annual deductibles.

There are currently about 6,000 concierge medical practices across the United States. The number of boutique medical practices has increased by as much as 25% over the past few years, according to the AAPP. That number is expected to increase as more inexpensive options propel the growth in boutique medicine.

Health Clinics Using Concierge Business Model

Multiple-location clinics that charge membership fees for access to basic medical services are also burgeoning in popularity. Companies like Qliance, MedLion, and SignatureMD Inc. are targeting a broader consumer base by diminishing costs so more people can afford their services. These clinics typically cover basic checkups, screenings, and other basic healthcare needs in exchange for the retainer fee and are based on the concierge medicine model.

Pathology Groups and Clinical Labs Need Strategy for Engaging with Concierge Doctors

According to Concierge Medicine Today (CMT), a trade publication for the concierge medicine marketplace, the four most popular specialties in concierge medicine are:

1. primary care;

2. family medicine;

3. cardiology; and

4. pediatrics.

CMT reports that concierge physicians typically earn about the same annual income as a medical specialist, such as an oncologist or a cardiologist, but incomes can vary greatly. Data compiled for 2014-2015 found that only one percent of concierge doctors made less than $100,000 per year. Nineteen percent earned between $100,000 and $200,000 per year, while 23% had an annual income of $200,000 to $300,000. Fifteen percent of concierge physicians brought in $300,000 to $400,000 per year and 20% made $400,000 to $500,000 per year. Twenty-two percent earned over $500,000 per year.

High-income individuals were the original consumers and target clients of concierge practices when they were originally conceptualized in the 1990s. Patients paid thousands of dollars per year for the benefit of having access to a personal physician at any time. As concierge medicine continues to become more accessible and affordable, it will likely play a larger and more relevant role in the U.S. healthcare landscape.

As the statistics demonstrate, consumer interest in the concierge medicine model of medicine is increasing. For that reason, it would be smart for clinical laboratory executives to develop a strategy and the service capabilities needed to serve this fast-growing sector of healthcare.

—JP Schlingman

Related Information:

Expanding VIP Care: New Concierge Doc Models Focus On
Employers, With Some Offering Specialists

Concierge Medicine Is Reaching New Markets

What Is Boutique Medicine or Concierge Practice?

Pros and Cons of Concierge Medicine

How Will Hospitals Embrace Concierge Medicine

How the Internet is Helping Concierge Medicine

How Private Medicine Leads to Better Physician-Patient Relationships

Want Comprehensive Care? Seek a Private Physician

Dispelling the Myths about Concierge Medicine

Private Medicine—Not Just for the Elite

A Comparison of Public and Private Medicine

What Does Concierge Medicine Cover?

Five Benefits that Concierge Doctors Offer

Why Concierge Medicine is Worth It

How Concierge Medicine Fits into the Future of Healthcare

Demand for Concierge Medicine Outpacing Supply

Why Physicians, Patients are Choosing Concierge Medicine

Concierge Medicine Trend Continues and Creates New Clients for Clinical Pathology Laboratories

More Doctors Consider Concierge Medicine as Healthcare Reform Looms