Earlier this year, Advisory Board CEO Robert Musslewhite opened the Future of Health Care Summit saying: "For years, we've talked about patient-centered care. Now we're entering a new era of patient-directed care." Few people know this better than Bret Jorgensen, chair and CEO of MDVIP, the country's largest concierge medicine provider.
Jorgensen spoke at the summit about his lessons in the emerging market for convenient care. The Daily Briefing's Juliette Mullin caught up with him afterwards for a deeper look at the MDVIP model and Jorgensen's perspective on the future of concierge care.
Question: MDVIP bills itself as an affordable, personalized, preventive care model with reduced-patient panel practices. Why this emphasis on capping a physician's patient load?
Bret Jorgensen: Well, what we do is reduce a typical practice from, say, 2,000 to 2,500 patients to just 300 to 600 patients maximum.
We expect the doctors to be able to do an annual wellness exam and develop a plan of care for the patients, have unhurried appointments, and offer same or next day appointments that start on time. At some point, it's math; you can only have so many patients if you're going to focus on prevention in addition to acute and chronic condition management.
That was the primary focus in starting the company 14 years ago, and the company's grown every quarter for the last 57 quarters consecutively. It's grown in revenue, doctors, and members.
Today, the company's got over 800 physicians. About 650 of those are already open; the rest are at some phase of transition. We have about 240,000 members in 42 states plus Washington, D.C.
Who benefits from concierge care?
Q: For the patient, how is getting care from an MDVIP physician different than it might be with a regular primary care physician through a regular insurance model?
Jorgensen: To be clear, MDVIP is not an insurance model.
Q: Right. It's a supplement to an insurance plan, right?
Jorgensen: Exactly. There are some direct primary care models that do some version of an insurance component. That's not what we do.
All of our patients continue to have whatever it is they currently have for insurance. For example, we have about 100,000 patients who have Medicare insurance, and it covers hospitalizations and all the typical tests and medications insurance would cover.
To your question of how it differs: The primary foundation of our model is that the member gets a host of non-covered services.
It starts with the annual visit, which includes a comprehensive assessment of their health and a personalized plan that gets formulated based on that wellness exam. Typically, people go to a primary care doctor because they have an issue, they're sick, or they have some problem. We try to jump ahead of those things through this wellness exam and the plan of care that follows.
In traditional primary care, you have busy doctors with large patient panel sizes who effectively have to triage fairly fast to other procedures, other extenders, or other specialists depending on what's going on with the patient. It's all a throughput process that gives doctors a limited number of levers to pull to deal with the financial viability of their practice. They can't adjust rates, so as a result what they can adjust is the number of appointments a day. Unfortunately, we feel that doesn't always lead to the best care.
Our doctors have the time for same-day appointments. They have unhurried appointments. Our patients have access to their cell phones, to their emails. It's a more convenient way to engage with patients to manage their health.
Our primer: What is concierge care?
Q: In this model, patients are paying X amount of dollars per year on top of their insurance premiums. Are they getting a return on that?
Jorgensen: Typically, our patients pay an annual membership fee of $1,500 to $1,800 a year—depending on the market and physician.
We know that's not an insignificant amount of money to pay. But put in perspective, our patients are often somebody like me—a busy, active executive—or they're people managing multiple chronic illnesses. At $1,500 to $1,800 a year, the cost is a cup of Starbucks a day. We think it's a manageable investment in somebody's health.
But there's clearly a little bit of a misalignment in terms of who pays the membership fee and who benefits economically.
We have a 70% to 80% reduction in hospitalizations and ED visits that has been documented over multiple years. Similarly, we've seen over 90% reductions in readmission rates for problem areas that Daily Briefing readers will be very familiar with, like chronic heart failure and pneumonia.
Now, we have 100,000 Medicare patients; these are patients who typically have two or three chronic illnesses. ED visits and hospitalizations are very much a risk for those patients. We have well documented evidence that Medicare could pay our annual membership fee for our members and get a 200% return on their investment in terms of avoided hospitalizations and ED visits.
But Medicare doesn't pay the membership fee. We'd love it if they did. They do get the benefit of avoided costs.
Meanwhile, the members get the benefit of avoided specialist visits, unnecessary procedures, copays, all of those things. We have a more than 90% retention rate with our members, and we have about a 94% satisfaction rate.
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Who uses MDVIP (and overcoming the 'wealth care' stigma)
Q: You mentioned that you have 100,000 Medicare patients; that's a big number. But who is the average MDVIP patient member, and what kinds of patients are you reaching out to as you grow?
Jorgensen: Right now, we have a little more than 240,000 members in 42 states and D.C.
They run pretty much the same sort of profiles socioeconomically as what you would typically find in a primary care practice. They clearly skew towards middle class and upper middle class, but we have everybody from school teachers to retired truck drivers to corporate executives to everything in between.
It clearly is not something that everybody can afford, and we're aware of that. But it is affordable health care, and we've intentionally priced it at that level. Our typical patient is about 64 years old. (We do have, actually, one member who is 111. In fact, we have about 300 members who are over 100 years old.)
I think there's a temptation for people to think concierge medicine is wealth care. It's very much affordable health care. It's a different model and it does have some incremental costs, but it's a very affordable model of care.
Q: Do you feel that perception—that concierge care is wealth care—is shifting as the system and as the industry changes?
Jorgensen: Yes, and for a couple reasons.
I think there's a greater amount of awareness of this model of care. Early on, there were probably too many doctors that were called concierge doctors who were charging, in my view, unfriendly prices. If you charge somebody $5,000 or $10,000 for primary care, as wonderful as primary care is and as critical and important as it is, it's a little hard to justify $5,000 or $10,000 in value of primary care.
For us, it's so important to be at an affordable price point, and there's nothing about our price point that screams "wealth care." It's affordable, personalized primary care. We've intentionally done that. We have doctors in our network who haven't increased their price for 10 years. And even the price increases we tend to do are in five-year increments and limited to 10%.
Becoming a concierge doctor
Q: So we have a good sense of the average MDVIP patient. Who is the average MDVIP doctor?
Jorgensen: About two-thirds of our doctors are in some form of a small group practice, which we mostly define as having 10 or fewer doctors. But a fair amount are solo doctors as well. And we even have large multi-specialty groups and health systems that have a number of MDVIP doctors.
The majority of the doctors are internal medicine doctors. The next biggest subset is family practitioners. Because it's very much focused on adult medicine, it's mostly internal medicine or family practitioners who largely migrated in that direction. About 20% of our doctors have some other sub-specialty in cardiology or rheumatology or something else, but they're still practicing as a primary care doc even though they may have some sub-specialty focus as well.
Q: I imagine you have situations where some of the doctors in a practice are part of MDVIP and some are not. What are some of the complications with that?
Jorgensen: It depends on the group, but I think it's a very manageable dynamic and we've done it in countless situations. They coexist just fine.
We tend to have what we call a non-waiting, waiting room. Our doctors aren't stacked up the way some of their peers are for appointments. Sometimes, we have to do some reallocation and changes of the physical environment or overhead space, because they just have a practice that's substantially smaller and much more supported by member fees. Our doctors are very focused on member satisfaction and taking care of patients, because our patients vote with their wallet.
Q: From the hospital perspective, what's the advantage of having an employed physician under the MDVIP model?
Jorgensen: I think there are patients within any health system who would value this model of care. Whether or not it's available is a different issue.
There are some hospitals that have done this type of model on their own; there are some hospital systems that have done it through MDVIP. I think for the health system the benefit is we can help them identify who the right doctors are and analyze the panels consistently across the whole health system network. We can actually market more effectively and know how to message more effectively and build more viable practices.
We're also very experienced at moving patients within a doctor's panel who choose not to join into another panel within the environment or hire another doctor. You can imagine that's always a big factor for us to make sure that the 80% of patients who don't join have a place to go. We don't abandon anybody. In fact, we won't proceed with a doctor unless we have a place for the non-joiners to go.
For the health system, if you can manage to keep the patients who don't join the reduced panel, you keep that patient within the health system and obviously any of the responsibility and benefits that accrue to the health system for having those patients. On top of that, you open up a new revenue stream by offering a different model of care that's meeting the needs of a different set of patients in a way that you aren't meeting it today. I think that's a double benefit, because you gain economically and the patients gain clinically.
Concierge medicine in the retail health care market
Q: You spoke on a panel with representatives from CVS Health and Walgreens at our Future of Health Care Summit recently. How does the concierge medicine service that MDVIP offers compare to the convenient care options that these retail giants are offering?
Jorgensen: Well, I think it's fairly different—but there's obviously a small bit of overlap.
I think that those retail models are obviously here to stay and they're meeting a niche in the marketplace. They're convenient, and that probably takes away some of the easier business of a typical PCP practice—the kind of patients that they often use to catch up on their schedule, a simpler visit than a multiple chronic illness elderly patient coming in.
But I highly doubt that our members are using those services for the simple reason that, with MDVIP, it is very easy for them to communicate with our doctors and to see doctors on a very convenient basis. I think those retailers are meeting a niche in the marketplace, but it's a bit of a different niche for us.
One thing I found so interesting about the Future of Health Care Summit was how health system executives are learning to talk about patients as consumers, while the retail guys who always talked about consumers now are talking about patients.
MDVIP talks about both. We refer to our members as members, but they're obviously patients as well.
Q: We're seeing a concerted effort to coordinate care under one risk umbrella—be it through bundled care, ACOs, or other value-based arrangements. How does the MDVIP model fit in there?
Jorgensen: I think it helps in those environments for all the reasons we've been talking about. However, our fee currently is paid by the member, so it's not part of the calculus for the typical ACO. We're not taking a slice of that pie for what we do.
Q: Can you see a future where MDVIP is actually incorporated into these value-based models?
Jorgensen: I can see some rationale and potential to do that, but we haven't done that yet.
Take Medicare Advantage for example. Certainly based on the outcomes we've been able to prove, you would think that they might even subsidize this model of care or give a discount to insurance because of it. We've not done any models like that, but we're certainly exploring them because at some point it may make perfectly good sense.
This model also fits into a lot of the commercial payment models, the high-deductible health plans with HSAs. (MDVIP is an HSA/FSA qualified payment.) In fact, I think our model fits very nicely when somebody migrates toward a high-deductible plan and invests more into their personalized care and primary care.
The future of MDVIP and concierge medicine
Q: When you look in your crystal ball, what does MDVIP look like in five or 10 years?
Jorgensen: I think what you'll find is there's a broader reach of our network. Today, we're probably 10 to 20 times larger than our nearest competitors in terms of patient size. I expect that will continue.
I think you'll probably see a wider range of earlier engagement in prevention and wellness. My guess is you'll see a much bigger adoption of consumer engagement at an earlier age. We're seeing some of this is patient awareness driven and some of it is economically driven.
As you know, the financial responsibility for health care is shifting more and more to consumers. So in five years, I hope to have been at the absolute forefront of educating the market on the benefits of managing your own health care—and hopefully driving consumers to this kind of concierge model.
Q: As consumers are learning to manage this new responsibility, many for the first time, are you seeing patients look more holistically at the cost of care rather than just the dollar amount of the premium they pay every month?
Jorgensen: Absolutely. It depends on when and how they're engaging in their health, but I believe that will be a very pervasive part of the market.
Today, high-deductible plans are not always that consumer friendly. For a typical consumer, I think it's very hard to get that holistic view of health costs and needs, partly because we've put a system in place for decades now that has made it very convenient for them to not know.
That's all now changing.
The high-deductible plans are by far the fastest growing plans out there, and they are starting to get paired with more awareness of prevention and wellness engagement tools. MDVIP fits beautifully with the flexibility of spending within those plans. It's still a small slice of the market, but in five years it's going to be a much, much bigger slice.
Screening and Prevention,
Chronic Care Management
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