Membership and Subscription Models in Healthcare
Many businesses are built on a membership or subscription model. For my family alone, I can think of several subscription services that we pay for on a regular basis, including Netflix, Youtube TV, Spectrum Internet, UFC Gym, and 9Round. Yet, the idea of a membership or subscription models for healthcare is a completely foreign concept for many people, even though this model has existed in America for over 20 years. What exactly is “membership medicine”? First of all, the terminology can be confusing as there are many synonymous terms out there including membership medicine, concierge medicine, subscription medicine, retainer medicine, cash-only medicine and direct care. Regardless of the terminology, the idea involves the payment of a fee or retainer to a provider in order to provide enhanced care and availability. The first known concierge medicine practice was founded in 1996 by Dr. Howard Maron and Dr. Scott Hall in Seattle (Source). Both of these physicians served as a part of the medical team for the NBA’s Seattle Supersonics, and they realized that the healthcare services available to these professional athletes far exceeded what was available on the market. They believed that this type of healthcare should be widely available to the general population, but they knew that it could not be delivered via conventional means. So in order to compensate for their decreased “productivity” as they would be committing to see less patients in the name of quality and attention to detail, they charged a yearly retainer to have access to their services. Their practice (MD Squared) was and continues to be highly successful and has sparked a “revolution” of sorts throughout healthcare as the demand for higher quality and more individualized medicine begins to grow.
Why are people willing to pay a yearly fee to their healthcare provider? Don’t we already pay for health insurance? Why would people dig deeper into their pockets for services that might be able to get for free or at a reduced price through their insurance? To answer those questions, we have to take a closer look at the current structure and delivery of healthcare in America and answer the following questions: What are healthcare providers unable to provide in the traditional in-network insurance model? What services or benefits or not widely available to consumers in the traditional in-network insurance model? What would ideal healthcare look like if cost wasn’t a factor? Since this is the real world and cost is a factor, how can I receive optimal and premium health care services without breaking the bank?
In the traditional payer-driven model, there are five areas in which consumers are forced to accept suboptimal care: access, time, quality, services, and relationships. When it comes to access, this is typically limited to appointment times that may or may not be available for several days, weeks, or months. There is often no or limited ability to communicate with providers directly, as communication is usually filtered through administrative staff. Once you arrive at an appointment, your provider’s time is often very limited as he or she often has appointments scheduled back to back in order for the clinic to maintain profitability. That lack of time with your provider leads to a perceived and real decrease in the quality of care delivered. Examinations are not as thorough as they should be, and the provider is always half-way paying attention as they are typing away at their computer trying to keep up with documentation. Meanwhile, patients are frequently not even offered services that are not covered by insurance due to the assumption that no one is willing to pay out of pocket for a premium service (which is girded by the underlying assumption that insurance companies have an understanding of which treatments are effective and medically necessary – UGH! – refer to my previous blog post on the payer-driven healthcare system to find my rant on that topic.). Finally, the ability to build a relationship with a provider is limited by some perceived and real barriers. Without access and time, relationships are impossible to build. Due to the sheer number of patients being managed by many providers, they are lucky if they even remember your name when they walk in the room, not to mention your medical history, your occupation, or your kids’ names. All of this combines to create a system where many feel like they are forced to settle for a level of surface that is inferior to many other industries. Shouldn’t health care lead the way? What would that look like?
I’d love to paint a picture of what my ideal healthcare system would look like. I acknowledge yours might be totally different, but I think some of these ideas are both realistic and revolutionary. First of all, I would love to have unfettered access to my health care providers. That may sound crazy, but I am a reasonable person, and I believe most people in this world are reasonable and respectful. I would not bother them in the middle of the night or for trivial matters, but I would love to know that in a time of need I could immediately speak to my trusted provider of choice. I would love to know that when I see that provider for an appointment, I have his complete and undivided attention. I would hope that he doesn’t have 10 other patients waiting on him in a waiting room so that I can be assured that he can spend adequate time with me to fully listen to my story and perform a comprehensive examination. I would love to think that my provider would recommend the treatment that stands the best chance of giving me a successful outcome and not just the treatment that my insurance covers or the cheapest option. Finally, I would love for my provider to know me by name and to have a good handle on my medical history without having to do a 5 minute chart review each time before seeing me. Even better, I would like for my provider to know my wife and children’s names, my hobbies, interests, occupation, and more. Basically, I would want a provider who I feel is personally invested in my life and not just interested in what value I can bring to his practice. The good news is that such providers exist across the spectrum of healthcare – physicians, physical therapists, counselors, etc. In order to deliver this premium level of service, many providers move toward membership models.
Why would a provider need to offer a membership model in order to deliver the time, access, quality, services, and relationship discussed above? In order to create a practice that is able to deliver in these areas, a provider must fundamentally change the way he practices by limiting the number of patients he can see in a given time period. However, if a provider is seeing a limited number of patients and expecting to support his family, he is faced with two choices – either drastically raise the prices of his services, or offer an alternative payment model such as a subscription model. The subscription model succeeds for several reasons. First of all, it allows consumers to know and predict their healthcare costs for a given time period (week/month/year). Secondly, it creates a financially stable practice for providers as the profitability of a practice is not completely tied to the number of procedures they are performing or the number of patients they are squeezing in the door to try to make budget. Next, it can allow for an overall cost savings for those individuals with high healthcare utilization. For those who frequently need to see their physician, physical therapist, or counselor, these services are often able to be offered at a significant discount due to the money being paid up front before accounting for utilization. Finally, and most importantly, it facilitates BETTER OUTCOMES for patients. How? When a patient pays a retainer or fee for certain period (month or year) and receives certain benefits and services for that fee, they are more likely to utilize those services. Think about it – wouldn’t you more inclined to work out at the gym 10 times in a month if you paid an $50 fee for the whole month than you would if you had to pay $5 fee every time you went to the gym? The price is the same, but locking in the price up-front motivates us to get the most out of what we’ve paid for!
Limitless Therapy and Wellness believes that membership models are the future of healthcare as a whole, and we will remain on the cutting edge of this trend. In my next post, I’ll discuss how Limitless Therapy and Wellness handles memberships including a detailed look at the benefits of membership and how that might change the way you look at physical therapy and the entire healthcare industry.