"Concierge" under ACA Betrays the Promise of Medicare

1/3/13

Medicare is more than the the massive byzantine interconnection between Government and health care providers, rather it is a promise to the elderly that has been its justification and its realization over the last four decades.  It is a promise that those in the declining years of life faced with inevitable debility and sickness shall not be impoverished by such effects of aging.

Since there were large numbers of such people, from the providers perspective the payment could be less than other insurance, as it would be made up by the volume of patients who would be treated.  This universality of care was ensured by this simple rule, if a doctor wanted access to this pool of clients, he or she must agree to charge no more than these lower rates to all elderly under this program. This had been the principle that was enforced by law for Medicare, until the department of Health and Human Services then under the Bush administration, Secretary Tommy Thompson made a change that opened the door to this practice.  His justification along with the possibility that under one provision of the ACA, it may no longer apply is discussed extensively in this article.   The author makes the case that the Annual Wellness Visit, although explicitly so limited as not even called an examination, is equivalent to the full examination that was a justification for the annual retainer fee.  The 2002 decision was an executive branch interpretation of the Medicare law, that could be reversed by the stroke of the pen by this Democratic president.  He has not done so.

Last week, the day after another showdown in Washington, when for a single day, before Congress retroactively restored what is known as the "doctor fix", Medicare payment had been slashed.  My primary physician, Dr. Bob,  is also a tennis friend, and by chance we crossed paths and I asked him what he was planning to do; and his response, which could multiplied by unknown numbers of others of his profession, illustrated what we are facing, "I had my letter written that would have switched my current practice."  He was not going to give up taking Medicare, which is a good chunk of his clientèle, but rather was about to sign up with MDVIP,  the main purveyor of a packaged version of concierge practice that is now growing rapidly with no public discussion.

To make life difficult, there are two names that are used for two very different business structures, "concierge," or as preferred by those who adopt it, "retainer" practice.  This essay is about the most common business structure, ill call it MDVIP practice,  those who continue to take commercial insurance or public programs such as Medicare, or usually both.   The second business structure that is NOT being described here ".... often also called concierge medicine" is illustrated in this N.Y. Times article.  Here physicians require an annual payment from patients directly for which they accept the obligation to do all required services of their practice no matter how extensive, without accepting Medicare or any other insurance.  This is less frequent than the retainer plus insurance model, and does not raise the concerns discussed here.

MDVIP practice is beneficial to the doctor, both in easing personal stress and increasing income.  If that were the whole story, if this were provision of other services, then there would be no problem.  But the practice of medicine is inextricably intertwined with government licensing and professional monopoly of distribution of life saving treatments.  As expensive as a medical eduction is, it is still heavily subsidized.  There is a social equation that must be considered.  The impending increase in clientele is a public choice that should not be an occasion for windfall increase in revenue for one part of the public health enterprise. 

 Those who promote concierge practice try their best to ignore certain harsh realities-that it changes the entire principle, the promise of Medicare. Rather than a redistribution from the successful to those less so,  this changes the direction of the flow.  Those with the wherewithal to pay the annual fee, will (most likely*) have more public funds directed to their own care. Increased visits will generate increased referrals and public payment.  While those who are the poorest, will receive reduced service, often by paraprofessionals.  This will not be any announcement of a policy change,  simply the words of a receptionist, "Sorry, the doctor is no longer taking Medicare unless you are a member of his concierge program."

Addendum as of 9/24/13

This annual fee plus insurance Concierge practice has recently expanded beyond primary physicians to specialists such as cardiologists, as described in this article, Putting a price tag on contacting your medical specialist, in the LA Times of  9/24/13.  While the $7500 per year is ostensibly only for easier email communication, it defies belief that such premium clients will not also get quicker appointments.   For this specialty, the extra fee under some conditions will be buying life itself!

There is another principle of allocation of medical care that is used in emergency conditions with insufficient capacity called "triage."  For this, priority is strictly based on how the medical resources can be used to save the most lives, with no consideration of payment.  Medical care always has an element of such an emergency for a given setting and scope.  The balance between the market model and the triage principle is a vital issue that must reflect the mixed economy of this country.    

Here's the letter that I sent to the publisher of the L.A. Times article:

The move to retainer, (concierge)  practice described in this article should be seen as only the beginning of the inevitable consequence of increasing demand under the ACA, while the law only minimally increases supply.   This resulting aggregate shortage is similar to that of WWII when existing market-pricing allocation became unacceptable as the greater deprivation would have been on the poor.  

The expansion of concierge practice should be an early warning that the ACA ideal of universal care may result in something quite different.  Those in the proverbial top one percent of income will draw an even greater share of the medical resources than previously since they are able to afford an annual fee;  but unlike when wartime rationing of scarce supplies were subverted by the illegal black market,  this time it will be  completely legal.   
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* Note:  My assumption that those on concierge programs will use more Medicare services has not been verified.   It is easily testable by tracking all Medicare payments of those in concierge programs compared to others of the same demographics.  This rather easy survey would provide tools to evaluate how this program affects the overall cost of Medicare among various income levels.
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If those supporting ACA are serious about achieving the ideal of making medical care a right, as we now accept the right to a minimum level of food sustenance for all, the effect of proliferation of this type of medical practice must be evaluated.  In the absence of such evaluation as is now the case, the argument against the entire program of ACA gains legitimacy. 


Link to website of MDVIP, to see the promotion of this type of practice to physicians.

PBS Program on this practice, comments are interesting.

Discussion site on Concierge Practice






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