Healthcare's VIP Experience: Inside the Concierge Model

Premium services command additional fees across various industries, a well-established and broadly accepted concept. Even Healthcare Huddle offers such a premium service!

However, paying extra for premium services in healthcare delivery tends to provoke discomfort and skepticism. This introduces immediate concerns about ethics, access, quality, and costs—starkly contrasting the acceptance seen in other sectors.

In this report, I’ll cover the ever-so-popular concierge medicine and other retainer-based practice models, highlighting market trends and future developments within this niche yet expanding healthcare sector.

Concierge medicine is a healthcare delivery model focusing on personalized patient-physician relationships, aiming to improve access to and quality of care. This model is particularly attractive to those who desire more time with their physician, more personalized care, and greater access than what is typically available in traditional practice settings. It may also benefit patients with chronic health conditions requiring frequent monitoring and close management.

But it ain’t free. And it ain’t cheap.

In the concierge model, patients pay an annual or monthly retainer fee, often around $2,000 per year (accounting for inflation) or $170/month. This is in addition to insurance premiums.

Here are some key characteristics of concierge medicine:

This concierge medicine model is around 30 years old. It started in the mid-1990s in wealthy areas such as Boca Raton and La Jolla, targeting wealthy retirees willing to pay extra for increased access to their physicians.

There are two main types of concierge models:

The patient benefits in the concierge model are perhaps the most obvious. As stated above, patients get immediate access to their physician. Appointments are longer, and care may be better, especially if we assume that the price patients are willing to pay for increased access reflects their desire to “be healthy.” Additionally, the model may be cost-effective if these patients had otherwise utilized expensive healthcare services like the emergency department if they couldn’t access their physician.

The physician benefits in the concierge model are perhaps the most overlooked. In the concierge model, physicians have a reduced patient panel and, therefore, can spend more time with patients—which is why they went into medicine in the first place. The pressure to see 30 patients in 15-minute slots daily is nonexistent. The reduced patient panel also means less administrative work (charting, billing). Overall, reimbursement is more assured given the subscription-like model, and income may equal or surpass that of the typical primary care physicians. With increased time with patients, decreased administrative burdens, and same-if not better pay, burnout is consequently low.

Concierge medicine isn’t the only type of retainer-based practice model. To fully understand concierge medicine, it’s important to know the other types of retainer-based models used.

Below is a short list and description of retainer-based practice models.

As described above, concierge medicine involves a model where patients pay an annual or monthly fee to be part of a physician's practice. This fee covers enhanced access to the physician, same or next-day appointments, longer consultations, and sometimes additional wellness services.

As I’ll explain in the next sections, concierge medicine is becoming a popular model for non-profit hospitals and health systems.

Direct Primary Care is similar to concierge medicine but generally more affordable, with a straightforward fee structure. The retainer fee covers all or most primary care services, including clinical, laboratory, consultative services, and care coordination, without additional per-visit charges. DPC practices do not typically accept health insurance, which reduces the overhead and complexity of billing and allows physicians to focus more on patient care. I covered the DPC model here.

This model is broader and can include various types of healthcare providers, not just primary care. Membership fees are charged for access to a range of services, including primary care, specialty consultations, and wellness services. Like DPC, membership medicine practices may not accept insurance, and the services covered by the membership fees can vary significantly from one practice to another. One Medical is an example of membership medicine.

Boutique medicine is often considered a variant of concierge medicine but might focus more on high-end services or cater to niche markets (talking about the wealthiest of the wealthy). It might offer luxurious healthcare settings, highly personalized services, or cater to specific demographics such as executive health programs. The fees for boutique practices can be considerably higher, reflecting the premium services.

Some practices integrate retainer-based models with traditional insurance-based services. For instance, a practice might offer a DPC model for primary care services while also providing services covered by insurance, like certain diagnostic tests or specialist referrals. This approach helps to maintain comprehensive care accessibility while offering the benefits of a retainer model for primary care.

There is no robust data regarding how many physicians are in a concierge model. Still, the latest data suggests the number is around 6% (this was 11 years ago, so the proportion is probably much greater today). The market is growing. The U.S. concierge medicine market hit $6.7 billion in 2023 and is projected to grow at a CAGR of 10.37% by 2030.

The concierge market is typically made of solo physicians. However, other companies and non-profit hospitals have significant leverage in the concierge market. Below is a non-exhaustive list with the fees (if I could find them):

Non-profit (NFP) hospitals recognize significant opportunities to incorporate concierge models into their operations, as detailed in KFF's thorough reporting here.

Firstly, concierge medicine generates substantial recurring revenue streams, often exceeding $4,000 annually per patient, in addition to regular reimbursements from private insurance. This affluent patient base typically does not require charity care, which can streamline financial operations. Furthermore, the attractive benefits of concierge models can help draw and retain skilled physicians, thereby reducing turnover and enhancing stability within the hospital's medical staff.

Lastly, NFP hospitals gain from the referral dynamics inherent in concierge medicine. Affluent patients initially consult their primary care physician (at the top of the funnel), who then systematically refers them within the hospital’s health system to specialized (and often more costly) services, effectively retaining these patients within the hospital network. This referral mechanism ensures patient loyalty and maximizes the potential financial benefits from high-margin specialties.

Concierge medicine is a lucrative alternative to traditional healthcare delivery, defined by large patient panels and time-pressured visits. The benefits of the model, as I explained above, will attract more physicians. Perhaps these physicians are peri-retirement and want to increase their income while reducing their patient panel size and administrative duties. Or, they may be young physicians who have already seen and had enough of the traditional healthcare delivery model.

This model can potentially reduce burnout, which may draw even more physicians to it. In one physician survey, more than 80% of concierge physicians defined their professional morale as very positive, and nearly all said they’d choose medicine as a career again (note: this survey was done by a company that helps concierge practices).

A lot of the research done on concierge medicine was done pre-pandemic, which raises questions on how the digital health/health tech boom can facilitate physicians’ transition from traditional practice to concierge practice. For example, there are companies like Ease that help physicians build their practices—no MBA required. Imagine using one of these companies to help you start and scale your concierge practice. All you have to do is focus on patient care.

Additionally, with digital health technology like continuous glucose monitors, home BP cuffs, and smartwatches, concierge physicians can monitor all the patient’s vitals and other data remotely. This would decrease the number of in-person visits and allow the concierge physician to better manage comorbidities. If a referral is needed, physicians can use other digital health apps that work with specialty referrals.

This brings up the next potential direction: specialty concierge medicine. There are already concierge cardiology practices, which I’d assume are more expensive than primary care concierge practices. As reimbursement models change, specialty physicians may start a concierge practice for more steady recurring revenue and smaller patient panels. This model would also work well for cosmetic-focused specialties such as dermatology, which is in high demand.

Lastly, and something that I’m thinking about, is a concierge practice “side-gig.” If you predominately do shift work in the hospital, you could have a concierge side hustle, where your patient panel is concentrated to around 100. Digital health technology can help you streamline all of your operations. Even with AI, there will be a time when these LLMs can serve as “agents” and help triage patient messages and other inquiries.

Multiple ethical and economic challenges associated with the concierge model need careful consideration.

First, concierge medicine is often perceived as a high-cost, exclusive model primarily targeting wealthy and healthy patients. This exclusivity limits the supply of an already scarce resource—personalized medical care. As a result, the sickest and most complex patients, who could benefit the most from the extensive and personalized services offered by concierge practices, are often left out. Focusing on a wealthier clientele can exacerbate existing healthcare access and outcomes inequalities. Critics argue that concierge models are "elitist" and may intensify the primary care shortages, particularly in underserved areas where medical resources are already limited.

Further, the economic implications of concierge medicine are complex. A recent study using Medicare claims data indicated that enrollment in concierge medicine was associated with a 30% to 50% increase in total healthcare spending by patients despite showing no benefits in mortality rates. This suggests that while patients may enjoy more face time with their doctors and quicker access to services, it does not necessarily translate into better health outcomes at a population level.

From an ethical standpoint, the concierge model challenges the principles of medical equity and justice. The priority access granted to those who can afford the retainer fees raises questions about the fairness of healthcare distribution. There is a risk that such a system prioritizes profit over patient care, undermining the ethical foundation of medical practice, which emphasizes care for all individuals, regardless of their financial capabilities.

The discourse around concierge medicine and other retainer-based healthcare models touches upon fundamental questions of access, equity, and the very nature of medical care.

The broader implications of adopting models like concierge medicine extend beyond individual patient-physician relationships to impact the healthcare system at large. On the one hand, these models offer a potential solution to doctor burnout, improving job satisfaction and reducing administrative burdens, thereby potentially improving the quality of care. On the other hand, they risk widening the gap in health disparities by enhancing service quality for those who can afford it while potentially leaving behind the most vulnerable populations.

As we advance, the challenge lies in balancing these models with healthcare's foundational goals. This includes exploring regulatory frameworks, insurance innovations, and technology solutions that can broaden access and make personalized care more universally available and sustainable.

The future of healthcare could see a blend of traditional and retainer-based models, where the benefits of personalized attention and the efficiencies of broader healthcare systems are optimized to serve a wider population more effectively. Such integration would require thoughtful consideration of how best to allocate resources, ensuring that innovations in healthcare delivery contribute to an inclusive, equitable system that values patient care above all.

A version of this article was first seen on Healthcare Huddle.