Cash-Only Practice: What You Need to Do to Succeed

Neil Chesanow

Disclosures

July 24, 2013

In This Article

Other Legal Hassles

Concierge physicians may face other hassles that traditional physicians don't. One of them is the possibility of being dropped by commercial insurers.

"Our model says, (1) stay in Medicare, and (2) if your state doesn't have any peculiar laws that would prohibit you from staying in network with your insurance carriers, then stay in network," Greenspan says.

However, in Greenspan's home state, Illinois, "the minute an Aetna or a Blue Cross or a United gets a whiff of the fact that any of our physicians in the Chicagoland area are 'going concierge,' they're out of the network immediately," she says. "They're just booted out. And that is something any commercial insurance company is privileged to do."

Even though concierge physicians can still bill insurers as out-of-network providers, the prospect of suddenly losing all of their commercial insurance contracts is enough to cause many doctors to have second thoughts.

"Many physicians don't seem to grasp the concept that there is a complete switch in revenue stream -- that the vast majority of their annual revenue is coming directly from annual fees," Greenspan says. "The office fees that they bill to Medicare and commercial insurance, whether in or out of network, are really almost irrelevant. Of their entire annual income, maybe 15%-20% is office visit fees. And yet they panic."

The possibility of violating state insurance laws also gives rise to alarm. You can't, for example, tell patients that if they join your practice, they will no longer need insurance -- that for an annual fee, you will attend to all their medical needs. "That would mean that the physician himself is becoming a self-contained insurance provider. That is illegal in the lower 48 states," Greenspan warns.

"The other thing that's an issue is that the patient is being enticed to join the concierge practice by being offered things that you wouldn't normally see in a medical practice, such as spa-like amenities or a nicer waiting room or transportation services," Jordan says. "Those could be considered payment for joining the practice and could be held under scrutiny under anti-kickback laws."

"When you present all these things to physicians, it becomes a little scary," Jordan says, "and may cause them to think twice before they take that leap."

Demanding Patients

"Hell is other people," the French philosopher Jean-Paul Sartre famously wrote. Concierge doctors often get a taste of this firsthand. After all, they promise their highest-paying customers a very high level of service on a 24/7 basis. It is any wonder that these patients expect them to deliver it?

Take Helen Hadley, who is a patient of a concierge physician. "For what I pay, I want a very high level of attention," she says. "When I walk in the door, I expect to get a very warm greeting, no wait time, you go in, you sit down, you say hello, and someone comes out to get you and you're in with the doctor."

As a concierge patient, Hadley has had some good experiences and some not-so-good ones. "Some physicians don't realize that there is a high level of customer service that they're going to have to market to their patients," she says. "Not just that you're going to give them your cellphone number. I want something extra. When I call, I want to be put through. When I walk in, I do not want to sit for 10 minutes. From a customer service perspective, some concierge physicians may not realize that they have a little more work to do in that area."

Albenberg, who was formerly on the board of the American Association for Concierge Physicians (now the American Academy of Private Physicians), a professional society, agrees. "Since the beginning of time, we've known that doctors are not businessmen," he says. "The ones who have been successful at this have been able to unravel themselves from the culture of being helpers, and the indoctrination that takes place in medical school and residency environments, and said, 'Hey, we need to create a product that has value.'"

But even Albenberg sometimes has trouble offering value to high-end patients, whose needs can be insatiable. "We have patients who will call and say, 'I have a spot on my arm. Can I come right now?'" says Susanne Jackson, Albenberg's assistant. "You really have to say that that's what we promised our patients: We are here for them. We are accessible. But it does leave room for abuse."

"If it's not a true and urgent issue, you may have to wait a couple of hours or even another day to see the doctor," Jackson admits. "He can't always be there if you call for every little scrape and cut. But we want to be there when you really need to be seen. It's a delicate balance."

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