Diversifying your practice
There are effective ways to merge a direct pay or concierge model with a traditional practice, to the benefit of both
When Kevin Kelleher, MD, and Mark Vasiliadis, MD, launched Executive Healthcare Services in Reston, Virginia, they viewed their fee-based membership practice as a way to continue practicing primary care in the way they loved. Executive Healthcare Services, which has a model somewhat similar to concierge practices, charges its patients a fee for enhanced access and greater coordination of care, letting the doctors spend extra time with patients. “It allows us to be the family doctors we’ve always wanted to be,” Kelleher says.
But when the physicians opened their doors in 2004 they didn’t abandon Generations Family Practice, a traditional one they have operated since 1998. Instead, they recruited two other physicians to treat Generations’ patients. Meanwhile, the success of Executive Healthcare Services has helped them bolster and sometimes subsidize Generations, which, like many fee-for-service practices, has felt the pinch of a tight reimbursement climate. (They don’t refer clients to each other, however, because the practice is illegal under the Stark Laws.)
“Because they’re two separate businesses, we try not to have it function that way,” Kelleher says. “But because they’re owned by Mark and me, it often turns out we have to subsidize the traditional practice. The traditional practice loses money some years and makes money other years. There have been years where our concierge practice, as a business entity, has helped us cover costs or loss at the other practice.”
Kelleher and Vasiliadis aren’t alone in finding that running two separate practices--or a hybrid concierge practice that includes fee-for-service patients--can be a smart economic model. Attracting patients willing to pay extra for conveniences or more extensive care can ease the financial burden on physicians who want to continue treating fee-for-service patients for whom insurance reimbursements often are declining.
Statistics on how many physicians are straddling the worlds of both traditional and concierge medicine are hard to come by, but in general concierge practices and hybrid versions of them still represent a small part of the medical landscape.
But many physicians do seem to be toggling between fee-for-service and some form of concierge practice, according to data from the Concierge Medicine Research Collective, which works with universities, physicians and others in the field to gather data. It has found that more than 80% of concierge medicine practices do accept patients who are covered by commercial insurance or Medicare.
Some physicians juggle the two temporarily, until they have enough concierge patients to sustain such a practice alone. Others don’t want to abandon patients who can’t afford concierge care. “We believe most physicians would prefer to retain their patients,” says Matt Jacobson, MBA, founder and chief executive officer of SignatureMD, a concierge medicine network based in Santa Monica, California, that helps physicians convert their practices. He says 80% of the physicians in the network have “segmented” practices.
Whether such a hybrid approach is temporary or long term, it can come with challenges. For one thing, given the rigors of running a single medical practice, it can be hard for an independent physician to juggle the administrative responsibilities that come with operating two separate practices, or a single practice with two distinct groups of patients who pay according to different models.
Here are some tips for making it work, so that the concierge or executive practice enhances your traditional practice.