The Healthcare Entrepreneur Blog

Concierge medicine: Until insurance can join in, it looks like they’re going to fight it

by Tannus Quatre PT, MBA | September 5th, 2008 | 1 response

Back in May I wrote about how Cigna and United Healthcare lashed out at concierge physicians by terminating them from contract panels, citing “contract violation” as the reason.  I wasn’t privy to all of the details as relates to the contracts, and wrote about the story not to form strong opinions, but rather to bring the story to the attention of our readers, some of which employ concierge practices.  As a business consultant to private practices, this story also held personal relevance to me and my company as we frequently find ourselves amidst the 3-way power struggle that exists between our clients (physicians and healthcare providers), their payers, and their patients.

I colored the post as an insightful, albeit brief, two-sided look at the issue, both from the perspective of the healthcare provider as well as from the insurer.  No real right or wrong, just the facts as they were understood.  I did give cause, I believe, to acknowledge the creativity and innovation of the concierge model, as we truly support and encourage the free market response to a healthcare system that truly provides a disincentive to the provision of thoughtful, quality care, in lieu of high volume, low cost service.

Now, we believe both in free market innovation from those providing care, as well as in the protections afforded us as individuals through the availability of healthcare insurance.  Both need to be able to survive financially if we are to help our collective society receive the care it needs.  We get it.

We actually go so far as to preach to our clients that in the face of tough financial decisions it is far more noble to protect the interests of the business that serves many, than the interests of few, if those few may cause the ship to sink.  We understand that this applies both to healthcare providers as well as insurers, and as long as each are acting in the interests of their patients, debate over the “best” model or the “best” contract can make for healthy discussion. 

What we don’t preach however, is that profit motives and power should at any point override our responsibility to advocate for the best interests of those we serve – a responsibility that has been called into question in the move by insurers to squash concierge care of late, simply because they aren’t a part of the model.

Today, the Arizona Republic reported that once again an insurance company, this time Blue Cross Blue Shield (BCBS) of Arizona, recently informed Dr. Steven Knope, a concierge physician in Tucson, AZ, that his contract is in violation and may be terminated.  BCBS claims that this move is in defense of their members, and they are concerned that their members must pay rates that are not agreed upon in the contract. 

When well spun it kinda sounds legit – I mean, if a contract says it’s going to cost X to receive Y, then you can’t charge a yearly retainer to get it.  The issue is, Dr. Knope doesn’t submit claims to BCBS for his concierge patients, so it’s unclear as to how this can in any way affect contractual obligations he has to BCBS

In defense of the concierge model, my overwhelming inclination is to this time shake my finger at BCBS and chalk this move up to a power play that desires to control the money flowing through all of the care provided by this physician’s practice – when they don’t need to. 

The outcome is the really interesting part of this move by BCBS.  If this show of power by BCBS doesn’t relent, this will serve to: (1) Sever the relationship of BCBS members with their longstanding physician, interrupting the quality and continuity of care they receive, (2) BCBS will formally take the position that member loyalty plays a distant second to their control of the flow of cash through a small practice in Arizona, and (3) Dr. Knope, while undoubtedly disappointed at the termination of his relationship with his patients, will experience an uptick in his profitability because an insurance company cancelled a contract that he didn’t really need in the first place because he operates a business model that doesn’t depend on the 3rd party payer system.

Tannus Quatre PT, MBA
Tannus Quatre is a private practice consultant and principal with Vantage Clinical Solutions, Inc., a nationwide healthcare consulting and management firm located in Bend, OR and Denver, CO. Tannus specializes in the areas of healthcare marketing, strategy, and finance, and can be reached through the Vantage Clinical Solutions website.
  • Bruce

    Private Health MD

    I had a visit to Dr. Ivan Castro’s new practice, other wise known as Private Health MD.
    Me being not really a doctor person was a bit hesitant to pay for additional medical costs for a “concierge” service!
    I have noticed recently that there are many other Physicians that are turning to this boutique style medicine, so I did my research.
    I called, browsed the internet, read up on Doctor history compared all my options and I came to the conclusion that if I was going to pay for additional costs it would be with Dr. Castro…his office was very helpful in answering all my questions, even offering to have me come in and talk directly with Dr. Castro for however long I needed to, very accomidating! I weighed my options on the different prices that all these new Boutique Practices are charging and came to the conclusion that I would much rather pay for a doctor that is not only available all the time to me but will see me in the hospital or at my home if I can’t make it to his office.

    I found that other Physicians operaring these VIP practices were not as accomidating for the amount of money they wanted, some did not want to see me in the hospital..or should I say couldn’t…they did not even have hospital privelages! Some wanted me to pay a yearly fee and my copays for each office visit and some wanted to restrict the amount. Be VERY careful before signing on to any of these practices. I found that some had so many additional costs that the intial fee was minute compared to the costs I would incur during the year for copays, blood work etc.
    Dr. Castro’s office was clean cut and dry…one yearly fee, unlimited office visits, no copays and they use your insurance to bill your blood work to and any MRI’s CT’s etc. EASY!
    I barely sat in the waiting room for 3 minutes before I was greeted by Dr. Castro’s nurse Marla…she is wonderful. I was able to speak with her and the Doctor with out feeling rushed at all..I checked out and had to do nothing…my blood was drawn there (none of this going to an outside lab) and me referral was scheduled with in minutes right in front of me , it was worth my dollar, for sure. Has anyone else had this experience with Dr. Castro or any other boutique/concierge office before?