Concierge or Direct Primary Care Might be a Smart Move for Your Organization

Who would have thought that a new approach to healthcare business models would be the subject of a television series? “Royal Pains,” which ran from 2009 to 2016, centered on a doctor who had a concierge practice.

Concierge care, and its conceptual sibling, direct primary care, started in the 1990s. They offer an interesting option for many providers, whether an individual physician, doctors’ group, or hospital. Patients pay a regular fee on a monthly, quarterly, or annual basis. Depending on the particular structure, the fee may cover all or most of the services someone would need (direct primary care) or, instead, provide priority access to medical practitioners whenever needed (concierge care) with service fees still needing coverage, whether by insurance or personal payments.

That difference between the models is enough for many to claim that concierge service is intended for the wealthy. And it can be. But direct primary care needn’t be, and either can become part of a comprehensive service offering that provides better care for patients and a more sustainable model for providers.

According to the American Academy of Family Physicians, direct primary care is a model that can work for some organizations, particularly physician practices. The AAFP sees a number of benefits, including the following:

  • zero insurance filings
  • reduced overhead
  • reduced patient volume
  • more time with patients
  • fewer medical errors and, so, less risk exposure
  • improved collection rates

Patients still will likely need a high-deductible catastrophic illness insurance policy for major emergencies, but, for the most part, the physician group acts like the insurer for the patients. And many of the benefits also extend to concierge practices, with the inclusion of an additional revenue stream.

Such a program wouldn’t work only for physicians. A hospital running a clinic could offer a similar option.

Massachusetts General Hospital has a concierge practice housed separately from the hospital but integrated in its operations. The hospital has seen some criticism because it was established in the 19th century as a provider of care for the poor. Yes, it does cater to wealthier patients with a reported a $6,000 annual fee over and above the insurance coverage they have.

But the concierge practice can help subsidize the overall operation, according to the New York Times.

“Health care economics are such, as well as the needs and wants of some different patient populations, that we’re offering this concierge model,” said Misty Hathaway, Mass General’s senior director for specialized services. “It won’t be the right model for everybody, but it will help us generate different sources of revenue in a way to fund the core mission.”

Given the difficult dynamics of healthcare, innovation requires a look at different business models and the use of a mix of models ultimately to better fulfill an institution’s mission while retaining the levels of revenue necessary to do so.

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