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Premium practice: When patients pay top dollar for exclusive care

It's an advanced kind of fee for service -- you charge your patients hundreds or thousands of dollars a year for special access to your practice. It sounds lucrative, but is it ethical?

By Cheryl Jackson, amednews staff. Sept. 17, 2001.

They cost a little more, and they don't mind saying they're worth it.

Physicians are offering more boutique-style services, promising premium care, to patients who pay annual fees of up to $20,000 per family.

What you get for your money

For example:

MDVIP in Boca Raton, Fla., this spring had doctors closing their practices to those who wouldn't pay a $1,500 annual fee.
Platinum Health, also in Boca Raton, Fla., charges up to $1,800 a year for a membership that includes a personal medical concierge to coordinate appointments and insurance, and guarantees same-day visits with primary care doctors.
HealthAccess in Fort Lauderdale, Fla., is going for a less-affluent clientele with its $100 annual membership fee. But participating physicians are paid in most cases within 48 hours, and billing issues don't exist, the group says.
Interactive Wellness System's Menlo Park, Calif., practice is so exclusive that internists Scott Wood, MD, and Sadick Alsadir, MD, don't even advertise, let alone talk to the press. Patients demand a hush surrounding the practice, explains assistant Mark Jackson. "We honor their decisions," he said. Any marketing is done by word-of-mouth.

The oldest-known such arrangement -- MD2 (pronounced "MD squared") -- fancies itself a Ritz-Carlton of health care. It charges $20,000 per couple, $13,200 for individuals and an extra $2,000 for a child 14 to college age.

Physicians nationwide are considering such moves as a way to deal with high patient loads that they say don't allow for enough time to meet with patients. The patients pay more, but it allows doctors to spend more time with them, and they get a higher level of service, say proponents of the programs.

And doctors in such practices get more money from fewer patients, as well as more control in practicing health care, they say.

A premium practice can have from 100 to 600 patients.

That's the plan for Boca Raton internist Robert Colton, MD, who considered retirement before conceiving MDVIP, which began last December.

"I want to see 10 to 15 patients a day and spend lots of time with a patient," said Dr. Colton, who is not involved in the daily operations of the company. "I was thinking about leaving clinical medicine. I was tired and disenfranchised about the type of practice I was in anyway."

MDVIP physicians are limited to 600 patients, who each pay the company $1,500 a year. The bulk of that money goes to the physicians, Dr. Colton said. MDVIP trains member physicians' staffs and provides updated equipment, as well as marketing and legal services. Physicians provide annual physical examinations and spend about a hour with each patient.

"I am much more personally and professionally satisfied," he said. "The incentives before were wrong. It was to try and see as many patients as you can. Bring them into the office. Do the ancillary test in the office."

Dr. Colton expects to earn more money with fewer patients.

"As a result of my restricting my patients and using the technology and spending more money on staffing and operation of the office, I can virtually guarantee them same-day and next-day appointments, and quick turnaround in terms of messages. They can page me 24 hours a day."

There's no voicemail on the office telephone.

About half of his patients are on Medicare, which does not pay for the physicals. He doesn't take HMOs, which require physicians to treat a high number of patients.

"I have total control now. I feel like I'm in control again," Dr. Colton said.

Legal, ethical questions

U.S. Rep. Bill Nelson (D, Fla.), has questioned the American Medical Association about the legality of such moves with regard to Medicare payments.

The AMA's Council on Ethical and Judicial Affairs was scheduled to meet in August to discuss the premium practices. The group had discussed it briefly in response to a physician inquiry in July.

Currently, there isn't a code that addresses premium-care operations.

The council is concerned that trimming a patient load based on the ability or willingness to pay an annual fee would likely affect physician-patient relationships. If longtime patients cannot afford to pay and then are dropped, an ethics issue comes into play, said council head Frank A. Riddick Jr., MD.

Physicians who eliminate patients who don't pay the fees have an obligation to make sure those patients have access to other physicians, he said. And the patients should be given plenty of warning about the physician's intentions, Dr. Riddick added.

"We did not come to any definitive conclusion on it. Except that many members frown on this as creating difficulty in access and continuity of care for patients," said Dr. Riddick, an endocrinologist at the Ochsner Clinic in New Orleans, before the August CEJA meeting. "It's not intrinsically unethical, although the legality of it is in question."

Still, that's not stopping physicians from signing up for premium practices.

About 10 physicians have signed on since Platinum Health Services began operations in July. Physicians agree to see Platinum patients within 24 hours of a request, return phone calls within two hours and meet with patients within 15 minutes of their scheduled appointments. Doctors block out appointments in advance for use by Platinum patients, and Platinum pays physicians for their participation based on individual contracts.

Patients pay a $1,800 annual fee for the concierge service, which includes scheduling of appointments for primary care visits and handling all insurance-claims processing.

A less expensive plan, at $600 a year, gets a patient those services minus the guaranteed physician access.

Doctors are limited to 200 Platinum patients.

Wealth care

Platinum is already eyeing other markets, President Les Schlesinger said.

"We recognize this is targeted to a high-end market. It's not cheap. It's for those in PPOs and POS and Medicare," he said.

Still Platinum might be considered tin when compared to Seattle's MD2, where internists Howard Maron, MD, and Scott Hall, MD, typically see a patient or two per day in the office.

Their $20,000 annual fee per couple includes all care that can be rendered in the physicians' office and some medications. But patients don't have to make office visits. Doctors will make house calls. Nurses will call prescriptions in for them and frequently deliver prescriptions to patients. Doctors not only make appointments for specialists, they accompany patients on the visits. If a patient were to come into the office, he or she likely would be the only patient in the office.

Offices feature marble hallways lined with antique artwork. And forget the stash of flimsy gowns. MD2 patients use monogrammed robes, slippers and sweat suits.

MD2 patients still need to maintain their insurance to see specialists and for hospital visits.

Dr. Maron had been team physician for the NBA's Seattle SuperSonics. He liked the idea that when he was needed he was expected to spare no expense to get athletes back into playing shape. When players needed access to a hospital, people behind the scenes pulled together to get them immediate care.

Other less-known but wealthy people would likely be willing to pay a retainer for the same upscale treatment, he thought.

Drs. Maron and Hall broke from their private practice group to start the venture in 1996 and had no problem finding takers. The practice was filled inside of a year, they said.

That's when they decided to sell the idea.

Having opened its first franchise in Bellevue, Wash., last October, the luxury physician practice is ready to move into up to 100 markets.

"Our belief is that every city has at least 100 families that are willing to pay for this medical care," said Duane Doberowitz, a 28-year hospital administrator who came to MD2 this year to lead expansion efforts.

It's charging physicians $75,000 per pair to establish a turnkey operation. Doctors who take them up on the offer should be prepared to build offices that conform to the style and decorating schemes of the original MD2. Each franchise must consist of a pair of physicians, a pair of nurses, and be located on a hospital campus. Doctors in pairs can cover for each other. More than that and the practice gets too crowded, Dr. Maron and Doberowitz explain.

The goal is to develop a network of top-performing physician pairs in major markets, sharing ideas and with the ability to treat each other's patients.

"What we saw was like a clinic without walls," Dr. Maron said.

The company is interested in physicians already treating local business leaders and status-bearing patients. Those are most likely the best performing, he said.

No apologies

Physicians have been inquiring.

The next franchise will likely be in California. Cities like Chicago and New York can easily support four to five such practices, Doberowitz said.

"They can take care of the patients; the doctors have a quality of life, and they're working 30 to 40 hours a week and have time to spend with their families," he said.

Patients are typically 45- to 65-years-old and healthy.

Physicians have to pay a 5% royalty fee, and should expect overhead to run about $1 million a year. But each doctor can walk away with $300,000 to $500,000 a year from the practice.

There have been rumblings about such practices only showing physicians' greed at the expense of most of their patients.

But Dr. Maron and physicians with other less-expensive operations are unapologetic about the practices.

"It's doctors wanting control over medicine. It gives them the ability to totally practice medicine and totally be in control of what they're doing, and not under the thumb of the insurance company," he said. "I still am a traditional doctor practicing traditional medicine. The difference is that I'm available to care for these people and can follow a problem thoroughly and provide a level of service that is not available in a high-volume office."

"If you're taking care of 3,000 patients, you're not solving the world's health care problems either. Why not 5,000? Why not 10,000?" he said. "All of us reach a particular point where we stop at a particular standard, and we close our practice.

"Marcus Welby was an MD2 doctor. On any given day, he only had one patient."

ADDITIONAL INFORMATION:

What you get for your money

MD2 ("MD squared")

Annual fee: $20,000/couple, $13,200/individual
Perks: Covers all patient care that can be delivered by physician in the physician's office. Only one patient in the waiting room, luxurious surroundings for office visits, house calls, physician escorts to see specialists, prescription drug pickup and dropoff.

Platinum Health

Annual fee: $1,800
Perks: Personal medical concierge to coordinate appointments and process insurance claims, guaranteed same-day appointments with primary care doctors, returned phone calls within two hours, patients see doctors within 15 minutes of scheduled appointments.

Platinum Health

Annual fee: $600
Perks: All of above with the exception of guaranteed same-day access to physicians.

MDVIP

Annual fee: $1,500
Perks: Comprehensive annual physical, returned phone calls, longer visits.

HealthAccess

Annual fee: $100
Perks: Discounts on services at physicians' offices and hospitals. For example, it charges $50 for a mammogram (normally $200), and $5,700 for a vaginal baby delivery (normally $13,000-$15,000).