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Concierge Medicine and the States

Is it retainer medicine, concierge medicine or boutique medicine? When it comes to the practice of paying doctors a fixed fee for expanded primary care...

Is it retainer medicine, concierge medicine or boutique medicine? When it comes to the practice of paying doctors a fixed fee for expanded primary care services, the name is just the start of the controversy. That controversy increasingly is grabbing the attention of state regulators.

A growing number of doctors accept annual fees - which vary from the modest to the astronomical - and in exchange offer additional services, including longer appointments, more extensive checkups and 24-hour e-mail and phone availability.

No one denies that doctors on retainer are providing good care. The question is good care to whom? The question of the name - with some doctors cringing at being called "boutique" or "concierge" - reflects a deeper debate over a payment practice that critics see as worsening disparities in health care access.

The context is that, with more young doctors going into specialties, primary care doctors are increasingly in short supply nationally. In the process of providing additional services, concierge doctors usually see fewer patients. People who can pay get better care. People who can't are left out, exacerbating, detractors say, the primary care access problem. Plus, critics ask: Shouldn't all doctors be spending plenty of time with their patients at appointments and making themselves accessible via phone and e-mail?

To concierge doctors, however, being paid for such things is part of the point. They note that a big reason that new doctors have no interest in primary care is that it doesn't pay well. The fee-for-service payment system rewards specialists who order tests over primary care doctors who observe and offer advice. Specialists often earn two or three times as much as primary care physicians, who work longer hours. "They're totally disenchanted," says Wayne Lipton, managing partner of Concierge Choice Physicians.

Concierge medicine gets away from fee-for-service - or effectively builds in fees for the services that other primary care doctors provide for free. As a result, there's a case to be made that it isn't part of the primary care access problem, but part of the solution. If concierge medicine can offer a lucrative business model, supporters argue, doctors will return to primary care.

So far, states aren't mediating this overarching debate over concierge medicine. Instead, they've focused on a narrower question: Are concierge doctors actually providing a form of insurance? At least superficially, promising to provide medical services in exchange for an annual fee sounds a lot like health insurance.

The significance of the question is that insurance companies are tightly regulated. Among other things, they have to prove they have sufficient financial reserves. For a medical practice to meet these standards would be exceptionally daunting. If states deem concierge practices to be in the insurance business, effectively, they'd be saying that doctors can't practice concierge medicine.

Maryland is one of the recent states to investigate the issue. What the state found, says Beth Sammis, deputy commissioner of the Maryland Insurance Administration, is that not all concierge business models are the same.

Some doctors are practicing what Maryland calls the annual evaluation model. In exchange for their fee, these doctors promise unusually thorough physicals and clearly defined follow-up services related to the check-ups, such as nutritional counseling. If the patient has a sore throat or a stomach ache six months later, he or she must use insurance or pay out of pocket. "It's easy to see that that's not the business of insurance," Sammis says. "There's a set amount for a set service. You pay that amount of money and you receive that service and that's the end of it." As long as doctors are charging the market value for the services, they won't run into trouble in Maryland using the annual evaluation model.

Where the situation gets more complicated is in what Maryland calls the bundled fee-for-services model. Under that approach, patients are entitled to services unrelated to the physical. A doctor might, for example, offer an annual physical and up to a dozen office visits a year. He would know that the fees he charges are less than the value of those appointments - in fact, he might know he couldn't possibly provide that many appointments to all of his patients - but he would be betting that most of them wouldn't show up that many times. That, Sammis says, sounds a lot like insurance. Maryland didn't forbid the bundled fee-for-services model, but cautioned doctors on steps they must take to avoid running afoul of the law.

In this way, Maryland is discouraging concierge medicine in its purest form, but is allowing it in the way it is most commonly practiced. All of the known concierge doctors in the state use the annual evaluation model. Other states have come to different judgments. Washington, for example, allows the bundled fee-for-services model, but requires concierge doctors to get licenses.

Many states, however, are just getting around to looking into the issue. A few years from now, states are likely to have clearer guidance for doctors as to what they can and cannot do. It's possible by then we'll even have come to a consensus as to what to call these doctors.

Josh Goodman is a former staff writer for GOVERNING..
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