Practice models for primary care offer revenue and lifestyle advantages

Key Points

It seems as if the only choice these practices have is to increase volume, which leads to limited access, rushed appointments, and decreased communication between doctors and patients-and, therefore, low patient and provider satisfaction. Many primary care physicians (PCPs) are leaving the current system of medicine altogether, and fewer graduating medical students are choosing to go into primary care fields.

Despite what seems like the possible extinction of the PCP, new business models for primary care delivery are emerging both from policymakers and entrepreneurial physicians. In the following pages, we describe several models of primary care delivery that are on the horizon or already here.

Even if the Patient Protection and Affordable Care Act is overhauled or repealed after the 2012 elections, it is likely that accountable care organizations (ACOs) and Patient-Centered Medical Homes (PCMHs) are here to stay. Both political parties see these models as ways to control costs and improve quality. In addition, ACOs and PCMHs are supported by major physician groups such as the American Academy of Family Physicians, the American College of Physicians, and the American Medical Association. Further, in anticipation of ACOs as the dominant model of healthcare delivery, many hospitals and existing healthcare systems are buying up primary care practices at a rapid pace. The past decade has seen a 75% increase in hospital-owned doctor practices, with more than half of physician practices now owned by hospitals, wrote researchers Robert Kocher, MD, and Nikhil R. Sahni in the March 30 issue of the New England Journal of Medicine.

ACOs are networks of doctors and hospitals that share responsibility for providing care to patients and seek to provide care that is both improved in quality and lower in cost. In return for meeting these goals, ACOs expect to share in the savings with physicians. At the center of the ACO is the PCMH, which is a team-based approach to coordinating care led by the PCP. Skeptics will argue that this arrangement sounds an awful lot like managed care, although the primary difference is that doctors and hospitals, not insurance company chief executive officers, are in charge.

PCPs may see increased salaries based on new reimbursement models, and younger medical students who seek lifestyle balance and don't mind following rules also might find the ACO model attractive. The downside is that the exact details of how PCPs will get more money-and specifically how much more-remain unclear. In addition, large, integrated models may deliver high-quality care, but they may do so at the cost of individualized attention and lack of continuity with a single PCP. Also, no strong evidence exists that ACOs/PCMHs actually will deliver on their promises.

RETAINER MEDICINE

Retainer medicine (sometimes referred to as concierge medicine) is small but growing at a rapid pace. MDVIP, one of the leaders in retainer practices, has more than 430 affiliated physicians providing care to more than 135,000 patients throughout the country. The idea behind the traditional retainer practice is that in exchange for increased access, including same-day appointments, longer visits, and 24/7 phone access to their physicians, patients will pay their doctors an annual fee. Most retainer models continue to bill insurers, including Medicare, for services rendered but benefit tremendously from the upfront cash and low patient volume.

Although the typical PCP manages a few thousand patients at any given time, a retainer physician keeps a panel size of only a few hundred. Retainer fees vary but are usually $1,500 to $2,500. An annual fee of $2,000 from 500 patients each gives each provider $1 million upfront before providing any medical care.

Management groups such as MDVIP usually take a substantial amount (about 30%) of revenues in exchange for administration, marketing, and other services needed to set up a retainer practice.

It's important to carefully consider the potential challenges associated with the retainer model. Physicians may not like turning away many of their patients who are not willing to pay a retainer fee, and they may not enjoy taking care of patients who have high expectations for the high premiums they will pay. In addition, new physicians cannot start a retainer practice from day one, because a retainer practice generally requires a small group of loyal patients willing to pay a high price to keep their doctor.

Other traditional retainer practices include SignatureMD ( http://signaturemd.com/) and ModernMed ( http://modernmed.com/). Concierge Choice Physicians (CCP)(choice.md) is another retainer practice company. CCP, based in Rockville Centre, New York, offers physicians a hybrid model so that while many of their patients continue in the traditional insurance-based model, a few patients receive extended benefits through a annual retainer fee.