Concord (N.H.) Monitor

Hampstead    

           

Your own doctor, for $1,000 a year         

That's the promise of a new "concierge" practice      

 

By MARGOT SANGER-KATZ

Monitor staff

November 12. 2006 10:00AM            

 

Ken Williams / Concord Monitor

Dr. Michael Stein of Hampstead has reduced his overhead from $300,000 to $50,000 by optng out of taking insurance.

 

 

 

Four years ago, Michael Stein ran a medical practice that, by all conventional measures, was highly successful. Stein earned about $300,000 a year and provided primary care for nearly 4,000 patients.

 

But, Stein said, "I was killing myself."

He needed 10 full time employees to manage the workflow. He often had appointments booked as frequently as every five minutes. He would finish a 12-hour day with stacks of untended charts littering his desk.

Stein's alone time was in the mornings and evenings when he would bicycle the 40 round-trip miles between his home and his office. As his frustrations mounted, he started mulling new possibilities. On the bike one day, he reached a critical realization: If he could cut health insurers out of the equation, he could run a practice with a much lower overhead. He could see fewer patients a day, give them better medical care, and still make money.

It took a bit longer for the details to fall into place, but these days Stein practices medicine with a small office, one employee (his wife), long appointments and short waits. For $1,000 a year ($1,500 with certain extras), patients get unlimited access to Stein and his care. For no additional fees, they can come in for lengthy annual physicals; they can visit him weekly for advice as they quit smoking or change their diet; they can call him during the weekend when their child cuts a leg and meet him at his Hampstead office to get the cut stitched up. Because the annual fee guarantees his income, Stein can afford to see many fewer patients, which means he knows them all better and can spend more time with each of them.

Stein's practice is one of small but growing number of practices in the country that are tinkering with the traditional business model of the primary care practice. Stein's practice model is a variation on what's often called "concierge," "boutique," or "patient financed" medicine, a system where patients pay higher fees in exchange for more personalized care.

Proponents of concierge care say it has the potential to solve many of the problems doctors and patients are facing in primary care. But critics say that concierge care simply provides better care for those who can afford it, and offers little to help those without $1,000 to spare. Though many concierge doctors, Stein among them, offer charity care to a few needy patients, most poor patients, even those with health insurance through the government Medicaid program, will be unable to pay Stein's fee.

"He, in essence, is in a win-win situation currently, because he is able to cherry pick patients and charge them extra, but that raises all the ethical issues," said Dr. John Wasson, a professor at Dartmouth Medical School who studies innovative medical practice designs. "What he's doing is in essence good business and a model for success, but it's hard to replicate and obviously not very good for Medicaid patients."

Insurance complications

For Stein, changing his practice brought the wastefulness of the conventional health system into sharp focus. At his old practice, he estimated his overhead at $350,000, and he believes that most of it went toward meeting the needs of health insurers. He needed experts to read his charts and plug the right insurance codes into his bills. He needed staff to secure prior permissions for prescriptions and procedures. He had one employee who worked 40 hours a week just arranging patient transfers to specialists.

He also calculated that he needed to see 25 patients a day just to cover his overhead. In order to make his salary, he often saw 35 or 40. And he never could spend as much time as he'd like with them. According to his wife, Gena, practice employees had developed a ruse to keep Stein from talking to patients for too long. When a patient visit ran over, someone would knock on the door and tell him that another doctor was on the phone.

"You can't take care of 25 or 30 patients a day," Stein said. "That's not possible. What you're doing is running a cattle drive."

His new practice, he said, has an annual overhead of $50,000, and that number includes the flat screen television and leather couches in the waiting room, the Starbucks coffee brewing behind the reception desk, the electronic record software and the high-tech diagnostic equipment that Stein bought when he opened his doors.

Gena Stein answers the phone and schedules appointments, and she also helps during patient visits with vital signs or testing. (She was trained as a respiratory therapist.) The cushy waiting room is usually empty. That's because with a current patient load of 250, Stein often sees a half-dozen patients a day. That slower schedule means that patients can see him right away and frees him up to attend to emergencies when they happen. Stein would like to see his practice grow a little but said he couldn't imagine going higher than 600 patients.

The key to his financial model, he said, is that he doesn't sign contracts with insurance companies, which means he's not bound by their reimbursement rates and not subject to their rules. He can decide what tests to perform or drugs to prescribe without having to make phone calls or fill out forms. He also doesn't have to worry about laws governing health insurance or Medicare fraud. Since he doesn't bill the companies, he doesn't have to follow their rules.

Part of Stein's contract with patients is that he will be available at all times. Patients have his cell phone number and are welcome to call him at night or during the weekends if they're having a problem.

"If something's bothering me, I just dial him up on his cell phone," said patient Mark Galvin. "If I don't get him, I usually get a call back from him in five or ten minutes."

And Galvin has availed himself of Stein's emergency services. When his daughter split open her eyebrow while the family was vacationing on Martha's Vineyard, Galvin returned to New Hampshire to visit Stein's office rather than use a local emergency room.

 

"It's the best care I've ever gotten and my wife would not take my child anywhere else," Galvin said.

'The doctor isn't happy'

Patients' access to Stein makes it easy to see why concierge medicine might be attractive to patients, experts say. But the slower pace and focus on patient care is also appealing to physicians, who, like Stein, have felt harried in conventional practices.

"No patient that I know is happy with the current health care financing system," said John Levinson, a cardiologist and professor at Harvard Medical School who runs a small concierge practice alongside his larger conventional one. "They are angry because they feel their phone calls aren't answered and they have 35 seconds with the doctor . . . what people don't focus on is the reality that the doctor isn't happy either."

That unhappiness is having consequences downstream. Despite a projected need for a growing number of primary care physicians as the population ages, the number of medical students choosing family medicine has been declining. Between 1997 and 2005, that number dropped by half, according to the American Academy of Family Physicians. Those declines, experts say, have come because of the low reimbursement and perceived poor quality of life for doctors in primary care.

"To me, the underlying message here is physicians are very frustrated and exasperated by the current situation," said Dr. Rick Kellerman, the academy's president, who said he could understand why a concierge model would be an attractive alternative to a conventional practice, but hopes that different, systematic changes will improve the lives of primary care doctors and their patients.

"I do think that maybe there's some things that we can learn from this model, and that is physicians want to provide personal care," he said.

It is physician frustration, not greed, that has driven doctors toward concierge models, said Roberta Greenspan, a former hospital administrator who opened a consulting firm in the Chicago-area, called SpecialDocs Consultants, to help doctors structure their concierge practices.

"They just can't do it, and this is not what they imagined they would be doing when they graduated medical school. They're frustrated. They love giving high-quality medical care, and they're frustrated by the bureaucratic paper pushing and justifying that they have to do in order to practice medicine," she said. "We usually smile when a prospective client calls. Because the first 10 minutes - we could probably write the script of what they're going to tell us. They all say the same thing."

Slow but growing

Greenspan said she's seen a slow but steady increase in the number of physicians trying concierge medicine, but overall, that number is still small. About 300 practices have adopted versions of the concierge model, according to the Society for Innovative Medical Practice Design, a professional association for concierge doctors.

In order for a practice to work, Greenspan said, you need an area with population density and enough socio-economic diversity that there will be people willing to pay the fees.

But if you ask Stein, his practice isn't just for the wealthy. He describes his patients as "from all walks of life," young parents, older retirees, a couple of wealthy executives, but mostly middle-class people who have health insurance from their employer. At $250 a quarter, it's all a question of what you value, he said.

"They're spending three times that on auto insurance," he said.

He also argues that practices like his will help shape the health insurance market, ultimately making him much more affordable. He encourages his patients to look for high deductible catastrophic insurance plans and health savings accounts, which allow them to put away money, tax-free, for medical expenses. Their savings on annual premiums, he said, will likely be much more than his $1,000 fee, and they'll still be covered if they get cancer or break their leg and need care he can't provide.

Still, critics say, it's naive to think that $1,000 a year is within reach for everyone.

"I think that's where the rub is," said Mike Green, the president and CEO of Concord Hospital, who thinks that concierge practices are not the best way to improve primary care. "I think for any individual practitioner, they might find it an attractive model, for any individual affluent or relatively affluent patient, they may find it an attractive model. But it really is in many ways a step toward a two-tiered health care delivery system, because not everyone can afford that model."

Critics also look to the system-wide effects of taking wealthier patients out of the conventional system. Because of the economics of conventional primary care practices, most independent practices already limit the number of patients they'll see who have Medicare and Medicaid, because those government insurance plans don't pay enough to cover doctors' costs. If all the wealthier patients with private insurance leave for concierge practices, the conventional doctors could have even more difficulty accommodating poor patients.

In a congressional committee meeting two years ago, Rep. Pete Stark of California warned that concierge medicine had the potential to disrupt the balance of the country's health care delivery system.

"The danger is that if a large number of doctors choose to open up these types of practices, the health care system will become even more inequitable than it is today," Stark said. "The wealthy will pay for exclusive access to quality care, and everyone else will continue to have inferior access to primary care physicians, specialists, and basic medical advice," Stark said.

Even if a concierge model might attract more doctors into primary care, slashed patient rosters will continue to exacerbate the physician shortage, Green said.

"There aren't enough primary care physicians coming out of training to be able to meet demand, even if this model worked well for everybody," he said.

Others, acknowledging problems with the model, argue that the market will ultimately help sort them out.

"I think these are going to be complicated political questions that our society has to work on," Levinson, the Harvard professor, said. "I do believe that the market actually works in lots of ways, mostly intelligently. I think that it's possible to be a society that uses the market for health care and is a truly caring society at the same time."

Return to roots

But to Stein, his practice is not a newfangled market-based innovation. He sees it as a return to the medicine that was practiced a generation ago, before the growth of health maintenance organizations.

The entrance of his office is marked with a mahogany-paneled door, which Stein made himself. Stein's name is stenciled in black and gold letters on the frosted glass.

"This is the way that medicine was practiced 40 years ago," he said.