October 26, 2017

Why not-for-profit hospitals, from Mayo Clinic to Duke Health, are hopping on the concierge bandwagon

Daily Briefing

    While "concierge medicine" is typically associated with private practices that work with the ultra-wealthy, a few not-for-profit hospitals are offering the service, Shelby Livingston reports for Modern Healthcare.

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    By adopting concierge medicine, these hospitals have a better shot at retaining patients who would otherwise leave for a private practice, Livingston reports. Further, some providers say offering the services allows hospitals to redirect the revenue to services for lower-income patients.

    Concierge medicine

    Concierge medicine first emerged in the 1990s as a way for doctors, who were under pressure to see high volumes of patients, to provide "highly personalized care" for fewer, high-income patients.

    In exchange for an annual fee, patients get largely unlimited access to their physician along with care coordination specialists. Health insurers don't cover the annual fee, though doctors typically bill insurers for individual visits.

    Some hospitals adopt concierge medicine

    Livingston reports that a few hospitals are starting to offer their own concierge medicine services. While there isn't data on the number of hospitals that run concierge practices, such hospitals generally tend to be big-name systems in urban markets, with the space and high-income clientele needed to support the model, Livingston reports. For instance, Boston's Massachusetts General Hospital, Duke Health, the Mayo Clinic, and Stanford Health Care all provide such services.

    Hospital-owned concierge practices have lower retainers than typical concierge practices—at $2,500 to $6,000 versus the tens of thousands of dollars for some private providers—and correspondingly don't provide the same degree of luxury as a conventional concierge practice, Livingston reports. Still, patients of the hospital-owned concierge practices can access primary care more easily than they could without the setup.

    Why hospitals are offering concierge services

    According to Livingston, some hospitals offering such services do so as a way to subsidize harder-to-fund areas of care.

    For instance, Paul Huang—a concierge doctor at Massachusetts General Hospital, which over the next few years plans to expand its two-doctor concierge service to a six-provider team—said the concierge practice brings in money that can be redirected to services for lower-income patients. "We are not doing this just to make more money—we are doing this to make money to put back into the mission of the hospital and to support programs that otherwise would be difficult to support," Huang said.

    Separately, Leland Teng—medical director for concierge medicine at Virginia Mason Health System, which began offering concierge services in 2000—voiced a similar sentiment, saying the revenue increases the hospital's bottom line and "helps the hospital take care of those who are potentially less able to afford health care."

    Teng also said the concierge program can work as a "test lab," with the lower patient volume allowing doctors more time to innovate. For example, the concierge team began following up with patients within three days of discharge as a way to reduce readmissions, then formalized the practice and helped roll it out through the rest of the hospital system, according to Teng.

    At Mayo Clinic, the concierge practices in Arizona and Florida were established to better keep up with patients' busy lifestyles. Stephanie Hines, the physician leader in Mayo's executive health division, said, "No two patients come to us that are alike, so we are trying to be flexible."

    The service remains rare

    According to Livingston, hospital-owned concierge practices are still relatively rare, at least partly because offering different levels of care to different patients goes against how hospitals have traditionally operated.

    Tom Cassels, a consulting partner at Advisory Board, said, "It's a cultural learning curve, because most not-for-profit health systems are geared toward providing the same level of service to everyone in their community." He added, "The fundamental model of concierge medicine is to price-discriminate."

    Further, some observers have suggested concierge medicine presents an ethical question in that it arguably allows individuals with higher incomes to access what some consider better care than others. That said, Huang noted that enrollment in concierge medicine does not mean a patient can "jump the line" when it comes to specialist access or hospital admission.

    Ultimately, Teng explained, "If we can help keep people out of the [ED], if we keep them out of the hospital, if we keep them out of the nursing home, we more than pay for ourselves in terms of improved outcomes for the patient. ... Honestly we think we're part of the answer to the health care issues in the world" (Livingston, Modern Healthcare, 10/21).

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