Following news Massachusetts General Hospital will open a concierge practice in August that will charge patients $6,000 per year for exclusive service, the concept is gaining attention.
Supporters suggest it’s a smart way for hospitals to draw more revenue, while detractors argue it creates a tiered system of healthcare that favors the rich.
While hospital concierge care isn’t new, as some hospitals have had programs for years, the time might be right for a boom in programs due to the growing culture of customer-driven healthcare and the influence of Mass General, whose backing of the trend may carry significant weight thanks to its 200+ year reputation for caring for the poor and its ongoing position as a No. 1 hospital in numerous categories ranked by U.S. News & World Report.
Several healthcare experts weighed in with Healthcare Dive on the pros and cons, and whether they predict a trend. They suggest the main issues hospitals face are determining whether concierge care is an appropriate fit for their unique circumstances, and managing any perceived unfairness.
Greg Charleston, CTP, CFA, CPA, Senior Managing Director of Conway MacKenzie Inc. and leader of the firm’s Healthcare Advisory Services Group
"I think hospitals will continue to develop higher margin value added services. They will likely be out-of-pocket items not covered by Medicare or Medicaid. These types of services can drive improved profitability. The downside may be the perceived unfairness between the quality of treatment by the ‘haves’ vs. the basic care for the ‘have nots.’”
John D’Andrea, Drinker Biddle managing partner and vice chair of the firm’s Healthcare Group
“I do think other hospitals are likely to follow suit. Many have already gone there.
While the concept of concierge healthcare services seems inconsistent with the health reform movement and the charitable missions of many tax-exempt hospitals, there continues to be demand, often in large city markets, where high-earner consumers are willing to pay for a concierge level of service.
Hospitals will naturally want to compete for this business. They will need to reconcile this business objective with their charitable purposes, which typically include making high-quality, low-cost care available to the broader communities they serve.”
Jeff Hoffman, senior partner and health care strategist in management consulting group Kurt Salmon's Health Care Group
“Concierge care isn't necessarily an inappropriate fit for hospitals. But there's not much rationale for its broad adoption. At the end of the day, even if 1,000 people sign up, that's only $6 million. For hospitals in general, that's not going to outweigh the potential negative publicity of appearing to create a two-tiered system. This will not be a big deal in the scheme of any hospital's financial success or failure.
This is a strategy that has been around for 20 years and has not made any broad in-roads for hospitals across the country… efforts to reduce the overall costs of health care are taking root, and we're moving toward telehealth and broader roles for nurse practitioners and other non-physicians in patient care. Concierge members may soon be paying for services and access that will be made redundant by telehealth and other technologies.
Where we do see this have appeal is in areas where there is a high concentration of both affluence and healthcare competition where it becomes a logical part of a donor strategy. But for safety-net hospitals and those with a reputation for charitable care, such an effort could actually leave a bitter taste, and the public relations implications aren't to be taken lightly.
Because many hospitals are 501c3s, they're not paying taxes. But if you start creating two tiers of medicine, you start chipping away at your argument that you're a charitable institution.
If a hospital has to make doctors available on demand, those doctors can't have a full practice and see as many patients. That's a lot of wasted efficiency. Hospitals must weigh whether the inefficiencies inherent in catering to a small population outweigh the benefits.”
Bob Teague, MD, Quorum Health Resources’ vice president of medical transformation
“As hospitals seek alternative sources of revenue, this offering may increase in the market. Systems with strong brand awareness and reputation like Brigham and Women’s are more likely to be successful selling this ‘fee-for-care’ service, as they can command a premium price and attract a sufficiently large private pay patient base to fill physician practices.
It is difficult for physicians who take Medicare patients to offer concierge services, since Medicare only allows physicians to charge a ‘fee for extra care’ for concierge services that are not available from Medicare. With the additional primary care-oriented services now reimbursed by Medicare (transitional care, wellness visits, and chronic care management), it may be increasingly difficult to meet this standard. And most hospital-employed physicians are likely seeing Medicare patients.”
Traci Bild, founder and CEO of national healthcare consulting firm Bild & Company
“Healthcare typically is not service driven; I do not think other hospitals will follow suit. They may envy Massachusetts General and even attempt to model them but facilitating this type of transformation requires tremendous leadership and accountability to results. In a chaotic environment grappling with tremendous change (with readmissions being a top priority), I think it’s at least five to 10 years out before we really see this type of change in the hospital environment.”
Andre L. Lee, DPA, FACHE, adjunct faculty member at Kaplan University School of Health Sciences and former hospital CEO
“On the whole, I do not see this as a natural outgrowth of the majority of hospital services because it is not something that is typically covered by insurance carriers. It is, however, a very nice deluxe program that seeks to meet every conceivable medical and comfort desire of a patient. Some might even call it the top of the medical food chain, setting a standard that we wish everyone could have.
I do not consider it inappropriate at all. No matter what product or service you can conceive in this country, we always have one portion that is above average if you can afford it. That could be watches to pizza to barber shops; there is inevitably one more level above average.
Despite the emotional appeal in health care to help everyone in every way possible, it is still a business. As long as the core mission of an organization remains in place to try and meet the needs of the community, then having a choice of services is a part of doing business.”