Two-Tiered Medical Care for Haves and Have-Nots

As doctors leave the system, patients scramble to find care

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By Adam Graham-Silverman,
The Fiscal Times
May 18, 2010

Not long after Cynthia Thek gave birth, her gynecologist opened a new practice in Englewood, N.J. Gone was the traditional waiting room, replaced by a reception area with spa-like ambience. Instead of a hospital gown, patients got a plush bathrobe. “It’s a beautiful space. The staff is superfriendly. You don’t feel rushed by the doctor or even the staff,” Thek, 32, explained recently. “However, [the doctor] also stopped accepting any insurance.”

Thek stuck with her doctor, Jennifer Ashton, for one post-delivery visit, paying $250, about half of which her insurance reimbursed. But when she learned that care for her next pregnancy would run $8,000 to $10,000, much of it not reimbursable, she decided to look for a new OB-GYN.

A small but growing number of physicians are pursuing Dr. Ashton’s approach: abandoning traditional insurance-based practice to offer VIP treatment, including more time with patients, in return for upfront fees. In one common setup, often called concierge or retainer-based medicine, a primary care doctor charges an annual fee ranging from $1,000 to $20,000 just to get in the door. When doctors shift to this model they can cull their patient loads, selecting only those who can foot the bill. The services they provide often include a deluxe annual physical, 24-hour direct cell phone access to a doctor and escorts on visits to specialists. Some doctors still accept insurance and Medicare and bill normally for routine care. Others, like Dr. Ashton, opt out of that system in order to charge what the market will bear. Ashton did not respond to requests for comment . 

The Haves, the Have-Nots
Doctors say the concierge system makes life much easier for them and assures better care to their remaining patients. "At the end of the day, you can look yourself in the mirror and you know that you did a good job with the patients you saw," said Dr. Steve Reznick, a Boca Raton, Fla., physician who cut his roster of patients from 3,500 to fewer than 400 five years ago.  "You couldn't do that seeing 40 or 45 senior citizens a day in the past." While that may be true for the doctor and remaining patients, it's not always easy for the thousands who didn't or couldn't pay, and who had to find a new doctor. Some health care experts view this as an ominous trend that could exacerbate socioeconomic disparity in the health care system in light of a looming doctor shortage. They say this development could be especially troublesome once the new health care law adds millions of Americans to the health insurance rolls and sends them looking for doctors. "Doctors love it. But in fact, from a societal point of view it's a tragedy," said Dr. Richard Cooper, a senior fellow at the Leonard Davis Institute of Health Economics at the University of Pennsylvania.

The health care legislation recently signed by President Obama is aimed at lowering costs and adding insurance coverage for more than 30 million people by 2019, including 16 million new Medicaid and Children's Health Insurance Program members.  But it does not account for the projected shortfall of 35,000 to 44,000 new primary care doctors, nurses practitioners and physician assistants that are choosing alternate disciplines because of increasing workloads, low reimbursements, a paperwork burden and a huge gap in pay compared with medical specialists. 

The Doctor is Out
A 2009 survey by the American Academy of Family Physicians showed that 42 percent of family physicians were not accepting new Medicaid patients. 65 million Americans are already living in areas the government has deemed short of primary care practitioners. And they’re not the only ones dropping out of the system. Recently, Walgreens and two other pharmacies in Seattle, Wash., decided to deny coverage to new Medicaid patients because of low reimbursements. And in a surprising move by one of the most revered hospitals in the country, the Mayo Clinic stopped accepting Medicaid patients in Nebraska and Montana due to the high administrative burden and low reimbursement levels. Mayo’s primary care clinic in suburban Phoenix, Ariz., also stopped accepting Medicare this year. The move affected some 3,000 of the clinic’s patients.

Dr. Marc Siegel fired a warning shot about the doctor dearth in an op-ed in the Wall Street Journal last April.  “With more and more doctors dropping out of one insurance plan or another, especially government plans, there is no guarantee that you will be able to see a physician no matter what coverage you have,” he said. He cited a 2008 report by the Medicare Payment Advisory Commission stating that 28 percent of Medicare beneficiaries had trouble finding a primary care physician; another survey that year by the Texas Medical Association found that only 38 percent of primary care doctors in Texas took new Medicare patients. Texas is not alone, as more and more physicians try to find acceptable ways to practice medicine without feeling like they’re being exploited.

Top-of-the-Line Care for Top-of-the-Market Fees
Concierge-style medicine is one way that overloaded doctors have chosen to respond. The American Academy of Private Physicians, the trade group representing the concierge care movement, says more than 1,000 doctors have gone this route. By another measure, 1.2 percent of respondents to AAFP's survey say they practice concierge, boutique or retainer medicine.

While fee-for-service, or “private,” doctors have long existed, primary care doctors began converting to the concierge model about 15 years ago. Companies came along to help doctors set up these practices and handle the administration. The largest, MDVIP, has more than 380 doctors. (This rise of high-cost medical services was accompanied by low-cost fee-for-service programs aimed at the poor or uninsured.)