Concierge, Direct Pay, or Hybrid: Is One Right for You?

Leigh Page

Disclosures

April 06, 2016

In This Article

Joining Big Practices

While most concierge and direct-pay practices are small, there are a few large operations that have been growing rapidly, propelled by contracts with employers and insurers as well as generous funding from venture capital firms.

MDVIP, one of the oldest and largest, is a concierge company with a national network of almost 900 physicians, serving more than 260,000 patients. The venture capital firm Summit Partners bought MDVIP in 2014.

MDVIP physicians are not employed. Instead, they're free agents who pay MDVIP a per-patient fee for services like marketing, branding, and other support. With this arms-length relationship, the company used to think it was shielded from malpractice actions, but no more. In February 2015, a Florida jury returned a verdict of $8.5 million against MDVIP for the actions of one its physicians.[7]

In the direct-pay world, even the big practices are much smaller than MDVIP, but they've been growing rapidly. Some of them employ physicians, but this doesn't bother Dr Eskew. "There is a place for employed physicians in direct pay," he says.

Here are some of the major direct pay companies:

Qliance, founded in 2006, had 14 primary care physicians serving 20,000 patients, as of June 2014. Growth has been boosted by contracts with employers, unions, and Medicaid. Dr Eskew says that Qliance physicians deal with 20,000 Medicaid patients.

MedLion, founded in 2009, now operates in 16 locations in five states. In a 2014 release,[8] the company said that it aimed to be in all 50 states within the next few years, and it was approaching employers in "dozens of states" to contract for care. The release added that the company "may be open to strategic investments in the future to allow for even faster growth."

Iora Health, founded in 2012, had 140 employees in 11 practices as of March 2015[9] and planned to open at least 10 more by the end of the year. The company is heavily funded by venture capital and often works with employers to provide healthcare for their workers. Iora practices are composed of teams of doctors, nurses, health coaches and others. In a new contract with Humana,[10] Iora doctors are treating the insurer's Medicare Advantage patients.

Facing the Critics

Physicians who opt for membership-based practices have to face the disapproval of some colleagues. In a position paper[11] on concierge and direct-pay practices released in November, the American College of Physicians (ACP) questioned the ethics of membership practices.

The paper noted that these practice models "may lead more physicians to stay in practice." But it argued that when physicians dismiss patients who won't convert to concierge practices, they "must be aware of ethical and legal considerations relating to patient abandonment." The paper warned that such practices "create a greater potential of being discriminatory against underserved populations and require special attention by physicians to the ethical considerations involved."

Dr Eskew thinks the criticisms are "condescending" and unfair. In a blog post,[12] he wrote that the ACP showed a lack of understanding of concierge and direct-pay practices. He pointed to the extra care that direct-pay physicians provide compared with that of the traditional large practice. "If a physician has a panel of 3000 patients, and she sees each patient on average less than two times per year for an average of 12 minutes," he wrote, "is this actually considered the effective delivery of primary care?"

"There is definitely an ideological divide on whether concierge and direct-pay practices are good for US healthcare," Marquis says. The Michigan lawyer sees clouds on the horizon if membership-driven practices were to grow rapidly. With each physician seeing about 600 patients rather a typical panel of 3000 patients, there would be huge drop in access to care, and policymakers might start calling for restrictions. But he doesn't see that happening anytime soon.

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