For the longest time, physicians have been burnt out, underpaid, and overworked in traditional healthcare.
As per the latest data of the American Medical Association (AMA), the physician burnout rate in the traditional practice clocks in at 45% as of 2024.
Annually, the AMA assesses over 20,000 physicians for six key indicators of physician well-being. Among these indicators include: the level of stress that physicians experience because of their job and the feeling of being valued.
The study reports that physician stress levels are rooted not from tending to a lot of sick patients — this is what physicians went through all that training for anyway. This is what gives them meaning and purpose.
High physician stress levels come from spending time doing the wrong work. Most traditional doctors are preoccupied with administrative work, leaving them no time to grow their practice or get to know their patients.
By understanding how concierge medicine practice management works, physicians regain the power of high-touch patient care.
Membership-based medicine addresses physician burnout, restores patient advocacy, and improves productivity plus financial outcomes for doctors.
In this blog post, we flesh out the business model of concierge medicine — what value it brings to a physician’s practice and how doctors earn income from it so that they can keep practicing their calling.
Like any other business, there are two main determinants of success in the business model of concierge medicine:
Without one or the other, a concierge medicine business model cannot keep its doors open and grow as a practice.
Income in private medicine business models typically come in the form of retainer/membership fees, out-of-pocket services, insurance reimbursements, and corporate partnerships.
On the other hand, physicians who wish to benefit from concierge business models must also be willing and prepared to spend. What these business expenses offer in return is a smooth and successful direct pay practice down the line.
These expenses include:
Successful practices normally take 1-2 years to breakeven, after which most concierge medicine business models become profitable.
Moreover, it usually takes 3-5 years for a retainer-based medicine practice to fill up their patient panel.
Prior to setting up your clinic, it is crucial to lay out a concierge medicine business plan template so that it is clear where you want to take your business and how you plan to get there.
Read more about: Financial Planning for Concierge Medicine Clinic Set-up
Patients pay an annual or monthly retainer fee, depending on the location of your boutique medicine practice, the level of service extended, and your expertise and specialization as a physician.
To successfully implement a concierge medicine business model, it is crucial to evaluate your current patient base, determine your ideal patient capacity, and assess your financial situation.
The goal is to find a balance between delivering exceptional primary care services and setting a price point that your patients can afford.
Doing so will guarantee a financially sustainable and professionally rewarding concierge medicine business model in the long term.
Having a retainer-based medicine practice of your own means you get to define what kind of care your patients receive.
A typical concierge medicine business model or direct primary care business model offers a set of basic benefits as a baseline.
These benefits normally include same-day or next-day consultations, extended appointments, and direct access to their physician via phone, email, or text message.
You also have the option to offer added perks that could add value to your patient’s well-being, like wholesale cost for prescriptions, house calls, wellness programs, and more.
Patient panels in concierge medicine practices are usually smaller than that of a traditional practice, holding about 100-600 patients only per panel.
This is much more manageable compared to overloaded patient panels in traditional practice, where primary care physicians typically see 1,200 to 1,900 patients.
An article published in the Journal of the American Board of Family Medicine (JABM) points out that “smaller patient panel sizes enable the primary care physician to focus more on each patient, giving each patient more time and attention, and enabling the primary care physician to coordinate care more effectively, particularly for those patients with chronic or complex conditions”.
As of 2024, tier pricing has become a current best practice for membership-based medicine. This has done wonders in reforming the image of concierge medicine as ‘luxury medicine’ or ‘for VIPs only’.
Offering tier pricing in concierge medicine business models allows patients to pay for only the services they need, making concierge medicine more accessible and cost-effective.
Here are examples of how tier pricing might work in a concierge medicine business model:
Many boutique medicine practices also offer flexible payment schemes, giving patients the option to pay for their membership fees monthly, annually, or in installments.
The business model of concierge medicine is rooted in technology. This is what differentiates retainer-based medicine from traditional, insurance-based healthcare.
From telemedicine to electronic health records (EHR), the success of concierge medicine is heavily dependent on the presence of these advanced technology and digital platforms.
Read more about: The Role of Technology in Concierge Medicine
To ensure smooth clinic operations, a concierge medicine practice requires a roster of staff.
Front-office staff, back-office staff, and even an accountant, attorney, and IT consultant — the success of concierge medicine practice management lies largely on having a team you can rely on and trust.
Concierge medicine marketing is a crucial component of any membership-based medicine business model.
Not only does it help ensure your practice has a steady patient panel, it also helps spread the word about the benefits of concierge medicine for patients.
It is important to note that you are dealing with patients who have been burned and mistreated by traditional, insurance-based healthcare. That being said, it is normal to come across patients who are skeptical about retainer medicine.
Read more about: Marketing for Concierge Medicine
The concierge medicine business model generates revenue through various streams, which can be categorized into the following:
Fees can range from $1,500 to $3,000 or more per year, depending on the level of service and the physician's expertise. Membership fees are the primary revenue stream for most concierge medicine practices.
Some concierge medicine practices accept reimbursement for certain services which are covered by the patient’s insurance plan. Insurance reimbursement rates vary depending on the insurance provider and the specific services offered.
Concierge medicine practices can accept cash/out-of-pocket payments for services such as:
Concierge medicine practices may partner with corporations to offer employee benefits, such as:
Corporate partnerships can provide a steady revenue stream and help concierge medicine practices expand their reach.
By providing personalized, high-quality care, concierge medicine business models can improve patient outcomes, increase patient satisfaction, and reduce healthcare costs.
Implementing a concierge medicine business model offers numerous benefits for physicians, patients, and the American healthcare system as a whole. Some of these benefits include:
By charging a membership or retainer fee, concierge medicine physicians can generate a steady stream of revenue as well as increase productivity levels within their practice.
Contrary to popular belief, seeing a smaller patient panel does not affect health outcomes and medical care access negatively. Data from Specialdocs reveals that it is actually quite the opposite.
The study conducted by Specialdocs shows that the annual revenue opportunity and productivity of a concierge medicine physician meets or exceeds the revenue opportunity for a comparable traditional practice.
With a smaller patient load, physicians can enjoy a better work-life balance and reduce the risk of physician burnout.
Concierge medicine allows physicians to focus on providing high-quality, personalized care to their patients, which can lead to improved patient outcomes and increased patient satisfaction.
The article published in JABFM notes that the business model of concierge medicine enables primary care physicians to focus more on each patient.
Because they are not overworked and underpaid in concierge medicine business models, physicians are able to give each patient more time and attention.
They are also able to effectively coordinate care, particularly for those patients with chronic or complex conditions.
By eliminating the need to deal with insurance companies and billing, physicians can reduce their administrative burden and focus on what matters most – providing excellent care to their patients.
If you are looking to sugarcoat the truth, you have come to the wrong place. Trust us when we say healthcare business models in retainer-based medicine will take a lot of grit and groundwork in the beginning, but the pay-off returns tenfold.
Having your own boutique medicine practice is a major step in your career as a physician. Like any achievement, nothing good ever comes easy.
It gives you a one-of-a-kind opportunity to extend the level of care your patients deserve, all while achieving financial freedom and sustainability on your end as a physician.
Most of all, you get to participate in a revolution that transforms American healthcare into a version physicians are proud of and patients are satisfied with: one that prioritizes a patient’s well-being, as well as doctor-patient relationships, above all.
Read more about: How to Ensure Your Transition to Concierge Medicine is a Success
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