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Physicians fed up with bureaucracy, lower pay, and trapped by medical code diagnoses have opted out of traditional medicine in record numbers for fee-based medicine. On the other side of the equation, patients are joining fee-based clinics in hopes of better healthcare at affordable prices.
Numbers vary, but between 6.8% and 15% of physicians are expected to convert over to some kind of fee-based practice. If the population follows in similar numbers what will that do to the current healthcare system?
Could all of this movement put downward pressure on the U.S. healthcare system to “right-size” their pricing models? Maybe.
The High and the Low End of Fee-based Care
Concierge practices represent the high-end of patient care. A private practice converts their patients over to a membership-based service where an annual fee is usually charged. The fees can vary from as little as $200 per year up to $6,000 for each patient. The higher the patient charge, the more exclusivity they’re buying. Most patients continue to have health insurance and use concierge care as an additional benefit.
At the low-end are walk-in clinics, which tend to have lower monthly membership fees and a la carte services at discount rates. Monthly fees tend to be between $50 and $100. Some lab work and doctors’ visits might be included, while patients will pay a discounted rate for other services like additional labs or pharmacy needs.
Could the Low End Adjust the Market?
At the moment concierge care practices are growing as physicians convert practices over, but the real growth is coming from the lower end. While there are hundreds of physicians working stand-alone clinics, there are also large companies as diverse as Proctor & Gamble and Walmart getting into the med-clinic market. Often these clinics are staffed heavily with nurse practitioners and physician’s assistants and less with physicians. They also provide services such as lab work at cheaper rates.
If enough patients pay less for medical services will the entire market have to readjust their pricing? Will HMOs risk losing revenue from things like labs, or will they fight to keep their market share by lowering costs to consumers?
There is a Down-Side to Clinic Centered Care
As more patients go to clinics, the level of care could be compromised. A primary care physician will be familiar with patient history and can treat around any medical issues. While staff at clinics can easily handle a minor injury or a simple cold, they could face patients with more serious problems and not have the expertise to treat them. Finally, if serious illness occurs requiring hospitalization, a patient could lose continuity of care and be stuck with a hefty bill.
It’s an interesting question. With Obamacare just rolling out, the market will need to watch how Americans choose to spend their medical dollars. What do you think? Do you think Med-Clinics and similar businesses will start a market adjustment for patients? As always if you are an M.D. or D.O. we’ll be discussing this inside Sermo as well. Please join us.
I’m not sure it’s fair to call the ‘low-end’ of fee-based medicine ‘walk-in clinics,’ at least when you’re discussing direct primary care physicians. These are for the most part regular doctor’s offices (nothing ‘low-end’ about them unless you mean affordable), they simply have opted out of third-party payment and instead have a patient base that pays a monthly fee to cover their treatment. I’ve profiled several of them on my blog, for example: http://theselfpaypatient.com/2013/10/03/deal-of-a-lifetime-offered-by-direct-primary-care-practice-in-kansas/
Minute Clinic and similar operations are walk-in clinics, and they fill an important niche in the market as well. But they are much different than fee-based direct primary care practices, contrary to the suggestion in this otherwise informative article.
Sean, thank you for your comments and I understand where you’re coming from. The high-end vs. low-end is from a business analysis point of view only (think of a bunch of venture capitalists discussing “the market” in a conference room somewhere) and not meant to place physicians into any categories. Several Sermo physicians run for-free clinics and are well-respected (even leaders) in the industry. And yes, there clearly is a difference between a minute-clinic and a for-fee facility, again for the purposes of this post and from that VC perspective they are similar enough to group together. The point was this is where the money is flowing too from the investment side. In this case “low-end” is very desirable. Hope that clarifies.
Thanks for the reply, Lisa. I think my objection was more to the ‘walk-in’ than the ‘low-end,’ but from a VC perspective I can see where it might make sense to lump them together.