Cash-Only Practices: 8 Issues to Consider

Neil Chesanow


May 15, 2014

In This Article

Experts Offer Surprising Insights

With rising costs and the problem of Medicare reimbursement still unresolved, many doctors have given at least a fleeting thought to switching to a concierge or direct primary care practice.

However, many doctors who are contemplating a switch are understandably confused by what they read in the media or learn from other doctors. Those who have successfully made the transition to either form of practice say that they can better focus on patient care and can more accurately predict practice revenue.

If the practice doesn't take insurance, practice administration is greatly simplified, fewer staffers are needed, and overhead can be reduced, these doctors maintain. If the practice continues to take insurance, membership fees, added to insurance copays and reimbursements, can boost revenues, they say.

But nagging questions remain. What's the difference between concierge medicine and direct primary care? Is retainer medicine only or mainly for doctors who shun insurance? What does 24/7 access really mean? Can any competent doctor do this and succeed? What are the downsides?

For answers, Medscape turned to 3 experts who can offer a national perspective. Internist Garrison Bliss, MD, a movement pioneer, sits on the board of the Direct Primary Care Coalition and is Founder and Chief Medical Officer of Seattle-based Qliance Medical Management, the nation's first direct primary care practice. Begun in 1997, it now has 5 locations in Washington State. Family physician Matthew Priddy, MD, is President of the American Academy of Private Physicians, a trade group, and lead physician at Priority Physicians, a 5-doctor concierge practice in Indianapolis, Indiana. Michael Tetreault is Editor in Chief of 2 online journals: Concierge Medicine Today and The Direct Primary Care Journal.

What they see is much confusion among doctors considering a switch, from which practice model to choose to how to succeed. Here are 8 common misconceptions that they address.

Is Concierge Medicine Elitist?

Some concierge practices are targeted to well-to-do patients, but most aren't.

According to Garrison Bliss, concierge medicine was born in Seattle in 1995, with the advent of an upscale practice called MD2. Patients paid a $1000-a-month membership fee. It covered all primary care services. The practice didn't take insurance. Today, MD2 has clinics in 8 cities, and each doctor's panel is limited to 50 families.

In the 20 years since then, concierge medicine has effloresced into countless practice variations on this theme. But in general, says Michael Tetreault, "concierge medicine doctors charge an annual fee that is typically accepted either annually or quarterly. Annual fees range from $1200-$3000 nationally. We believe that about 80% of the concierge physician community falls within this price range."

However, some concierge practices charge a good deal more: $5000-$20,000 per year, observers say. Wide variations in fees may reflect the level of personal attention that a doctor provides -- Matthew Priddy once knew a concierge physician in New York who cared for 4 families and traveled with them on their yachts -- the doctor's reputation, and noncovered services offered. These may range from medical spas to therapeutic massage, "aesthetic treatments," or sports medicine clinics, which may or may not be included in the annual fee.

Although concierge physicians started out as doctors to the 1%, over the years, the movement has taken a decidedly middle-class turn. For one thing, there are only so many concierge physicians that the high-end market will support. For another, not every primary care doctor wants a panel limited to affluent patients.

Many doctors find the term "concierge" off-putting. Even for concierge doctors seeking middle-class patients, it sounds unaffordably elitist. There have been several attempts at rebranding. "Private medicine" and "private physicians" are now the terms that many concierge physicians prefer to use, Priddy says.

Common benefits offered by concierge practices are same-day or next-day appointments, visits that last 30 minutes or longer, 24/7 cell phone access to the doctor, and a fancier waiting room than is found in the typical insurance-based practice. Some concierge physicians make house calls, Michael Tetreault says.

It's commonly thought that concierge physicians shun insurance. Not so. "According to our assessments over the years, 80% accept insurance," Tetreault says, by which he means both commercial insurance and Medicare.

To be able to offer same-day appointments and extensive patient visits, concierge physicians must limit the size of their panels. "In a typical primary care office, a doctor will have 3000-5000 patients," Bliss points out. "In a typical concierge practice, you would find a ratio of about 1 doctor to 600 patients."

Adding to the confusion, the terms concierge medicine and direct primary care often blur together. Priddy views the term private medicine as an overarching rubric for a continuum of care, with concierge medicine at the higher end in terms of cost, private medicine in the middle, and direct primary care at the lower end of the price spectrum.

"If it's a higher price point and you travel with the family, you truly are a concierge medicine doctor," he maintains. "If it's a medium price point and you do house calls, take care of your patients in the hospital, and do same-day appointments and longer physicals, then that's probably private medicine.

"The lower-cost practices aren't going to see you in the middle of the night in the emergency room, and they're not necessarily going to do house calls," he says, "but in general, they give you a lot more time than the typical family medicine or internal medicine practice would. Those would be the folks who fall into direct primary care.

"But in reality," Priddy says, "it's all the same thing. It's all private medicine."

Concierge Medicine vs Direct Primary Care

Confused by this semantic hair-splitting? Join the club. Even concierge and direct primary care physicians may be confused about which type of doctor they are.

"In polls, we're asking the actual physicians, 'Do you consider yourself a concierge doctor or a direct primary care doctor, or do you consider yourself both?'" Michael Tetreault, the journal editor, says. "Most say that they consider themselves a concierge doctor. But they still don't understand the differences. A lot of doctors consider themselves to be both."

Nationally, direct primary care practice is considerably newer than concierge practice -- and there are considerably fewer direct primary care than concierge physicians. Tetreault estimates that direct primary care physicians make up about 20% of the retainer medicine movement right now; the other 80% are concierge physicians.

"Generally, direct primary care is a cash-only practice," he says. "However, although we have no hard data, we estimate that less than 20% of direct primary care practices accept insurance. So there are some that do."

Direct primary care physicians charge less than private or concierge physicians: "from $25 to less than $100 a month," Tetreault says. "We believe that these fees represent about 90% of the direct primary care physician community."

That fees are payable by the month rather than by the quarter or year is important to many direct primary care patients, who may have cash flow problems in a tight job market. "That's a big difference," Tetreault says, "no long-term contract."

Direct primary care practices may or may not offer same-day appointments. Most probably don't, Tetreault says. The doctors probably won't give out their cell phone numbers, meet patients in the ER if they have a late-night crisis, or make house calls -- although some direct primary care doctors do make house calls, he adds.

If house calls are offered, they are typically billed separately, not included as part of the monthly fee. Flu shots and vaccinations are usually billed separately too.

"Many direct primary care practices do not build in concierge medicine service components, such as 24/7 care, cell phone text messaging, and instant or same-day appointments," Tetreault says. "And yet, some do."

Concierge practices composed exclusively of concierge patients (most practices include a mix of concierge and traditional patients) generally limit their panels to 600 or fewer patients per physician. "Direct primary care practices, because they charge a lower fee, need more patients on their rosters," Tetreault explains. "They typically have under 1000 patients."

The distinctions between concierge medicine, private medicine, and direct primary care may be ultimately meaningless, since some doctors call themselves whatever they feel sounds better, and there are so many practice variations, many overlapping, that it often isn't clear which is which.


Comments on Medscape are moderated and should be professional in tone and on topic. You must declare any conflicts of interest related to your comments and responses. Please see our Commenting Guide for further information. We reserve the right to remove posts at our sole discretion.