Patient-Centered Medical Homes vs. Concierge Care

Recently I wrote an article about concierge medicine, a practice whereby a doctor promises to provide greater individual service to patients willing to pay a surcharge for the service. Most concierge doctors provide only office-level services and work outside of healthcare insurance plans, which requires patients to also carry full medical insurance in addition. Consequently, this approach is really aimed only at a relatively affluent cliental. It seems that both doctors and patients are happy with this arrangement. My conclusion was that it would remain a small, niche business in healthcare and would not contribute much to the evolving healthcare industry. I was somewhat offended because it appeared that these doctors had found a way increase their freedom, raise their pay, and do less work. So be it.

I claimed that an equivalent to the concierge type of service was becoming available to the general public at much lower cost. At the time I had in mind the type of care available from Disease Management Programs for chronic illnesses, and that described by Gawande in his “Medical Hot Spots” article. I was also comparing it to my experiences with Kaiser Permanente and concluding that I would have nothing to gain from a concierge doctor. Apparently, there is more movement than I thought in the direction of a more intense involvement between doctor and patient.

Tom Murphy provides a timely Associated Press article: Trying a New Approach to Primary Care: Prevention. He describes an approach with the unwieldy, and somewhat misleading, title: “patient-centered medical homes.” This term is generally shortened to just “medical homes, making it less unwieldy, but no less misleading. According to Murphy, this approach began in the 1960s as a way of treating children with problems that required complex medical attention. Recognition that complex medical problems (hot spots) are the greatest source of medical expense, doctors and insurance companies looked for ways to provide care for these patients more efficiently. In the last few years primary care physicians have begun to participate in approaches that not only provide more intense care to the most needy, but also recognize that cost savings can be had by practicing preventive medicine.

“Patient-centered medical homes focus on keeping patients healthy, which saves money by reducing hospital visits, especially for chronic conditions such as diabetes.”

“WellPoint Inc., UnitedHealth Group Inc., and other insurers have pilot projects around the country testing this concept. The departments of Defense and Veterans Affairs are making plans to use medical homes, and more than a million Medicare recipients are involved in another test.”

“All told, an estimated 40,000 primary care doctors work in practices set up as patient-centered medical homes, according to the Patient Centered Primary Care Collaborative. That amounts to about 13 percent of all doctors and pediatricians.”

Health insurers and doctors must change the way they do business in order to make this work. It requires that doctors do more than they would normally do in caring for their patients. One satisfied customer claimed it reminded him of the family doctors he had when he was growing up. This approach also depends heavily on digital medical records and supporting software in order to insure that patients receive the care they need. Murphy quotes one medical group leader who had to spend over a half-million dollars on software to play in this arena, but had quickly recouped the investment in greater efficiencies.

Patients also have to change their interactions with their personal physician. Much of the attention they need involves follow-up calls and visits to insure that the patient is following the prescribed regimen. Much of this can be performed by lower-cost support personnel. The patient must be willing to deal with what may end up being a team rather than just an individual doctor.

Is this beginning to sound like concierge medicine? There is one major difference. A concierge physician might have 600 patients at $100 per month. That is a potential income of about $720,000 per year for the doctor.

“Doctors running these medical homes generally receive an extra or bigger payment from insurers to manage a patient's health. The amount varies depending on the plan.”

“When it started a medical-home program in 2009, Blue Cross Blue Shield of Michigan increased office visit reimbursements. The extra pay amounted to about $7,500 more per doctor annually.”

The Michigan experience is consistent with wellness programs in general: two dollars saved for every one dollar invested. Of course, these are short-term savings. The real savings have to be integrated over the lifetime of each patient and, presumably, are much larger.

“All told, the insurer spends about $35 million a year to support patient-centered medical homes that now care for around 2 million people. In return, it estimates that it saved between $65 million and $70 million last year alone.”

Praising medical insurance companies is not an everyday occurrence. This example and a few others I have encountered recently seem to indicate that the insurers are taking the responsibility to rein in costs seriously. The progressive in me concludes that the market system can work—when properly regulated.