Like many of his harried colleagues, Bernard Kaminetsky, an internist in Boca Raton, Fla., was growing increasingly disenchanted with the seemingly endless treadmill of modern medicine. He was seeing up to 30 patients a day, scrambling from one appointment to the next under such a tight schedule that he barely had time to return a phone call or wolf down a quick lunch.
Kaminetsky, 48, who came close to leaving his profession, discovered a career-saving solution in "boutique" medicine, joining a new members-only practice restricted to patients willing to pay an annual retainer of $1,500 for preferred services and special attention. His patient base fell to just 600 from about 3,000, providing Kaminetsky with more time for quality medical care--and a higher income to boot.
"My practice used to be just brutal--I felt rushed, and the patients felt rushed," he says.
Now, patients generally get in to see Kaminetsky the same day they make an appointment. And he has much more time to discuss cases with specialists. "I don't have to rush anymore. It's like a different world."
For a small but growing number of America's overworked doctors, the boutique model is an answered prayer. It's the perfect way to reduce the stress of assembly-line medicine while improving both patient care and doctors' annual earnings, proponents say. They believe the phenomenon of white-glove medical practices is an understandable reaction to the mounting frustration, anger and belt-tightening imposed by managed care.
"Physicians are spending more and more time with paperwork, hassling with insurance companies, than doing what they were trained to do--care for their patients," says Bruce Scott, a member of the American Medical Association's board of trustees and an otolaryngologist in Louisville, Ky. "What's happening here is a response to all these frustrations."
A questionable practice?
The trend also has generated sharp criticism even within the medical community. Despite the irritants and intrusions of managed care, physicians have a special responsibility to care for all patients--not just those who are able to pay a large retainer, some critics say.
"It makes me sad," says Richard Roberts, a family practitioner in Belleville, Wis., who is president of the American Academy of Family Physicians. "For one thing, it purports to offer what all good primary-care doctors should offer, ready access and personalized care. This is a classic insurance underwriting technique called skimming. What will happen is that poor people, who can't afford this, won't get it, and their costs will be foisted on everyone else (in higher insurance premiums and taxes)."
For patients in medical practices such as Kaminetsky's, the upfront annual membership fee covers the "special" services and preferred care--traditional insurance still pays for the actual medical costs.
Kaminetsky's seven-doctor group, which is affiliated with a company called MDVIP, was launched earlier this year in the affluent coastal community of Boca Raton. MDVIP is one of several ambitious for-profit companies that are promoting the concept of boutique services to physicians nationwide, hoping to carve out a new market with perquisites such as luxurious waiting areas, free annual physicals, same-day appointments and even the occasional house call.
Among them are other for-profit companies with the same business model as MDVIP, including HealthAccess, based in Fort Lauderdale, Fla., which charges a modest $100 annual membership fee for its limited list of special services; Platinum Health, another Boca Raton-based practice, provides a personal medical concierge as part of its yearly fee of $1,800. Among the highest-priced boutique practices in America is MD2, which was formed six years ago in Seattle, the birthplace of concierge medicine, and now charges as much as $20,000 a year per couple, on top of insurance costs.
MD2 was launched in 1996 by Howard Maron, M.D., a former team physician for the Seattle SuperSonics, and his partner Scott Hall, M.D., both in their early 50s. The practice's select and wealthy clients receive a "private adviser who stands between the patient and the complex and intimidating medical world," says Duane Dobrowits, chief executive officer of MD2. This physician is "reserved" as a medical expert for the family, "much as private legal counsel guides some families or corporations through the legal process."
The doctors are available for house calls 24 hours a day, accompany their clients to specialists, and oversee all hospital care. They also deliver prescriptions to their clients, handle their medical bills and design travel medicine plans. If a client becomes ill while out of town, the doctors will even fly there to supervise care.
Many clients prefer to be seen in their homes rather than at the MD2 offices. But those who come into the offices for their medical appointments get five-star treatment. Instead of flimsy paper gowns, MD2 patients use monogrammed robes, slippers and sweat suits. And for the ultimate in privacy, only one patient is allowed on the premises at a time.
Nothing but the best
Maron got the idea for MD2 while working with the Sonics. He was told to spare no expense to provide the players with the best, most-convenient healthcare possible. Other wealthy people, he thought, likely would be willing to pay a fee for the same platinum-card treatment.
Maron and Hall broke from their doctor group, where they had been seeing about 3,000 patients each, and invited selected patients to apply for MD2. Now limited to 100 families, MD2 charges $13,200 for individuals, $20,000 per couple, and an extra $2,000 per child over age 14. Most clients are heads of large corporations with a very large net worth.
"They're movers and shakers who are very busy and don't want to wait to see a doctor," Dobrowits says.
MD2 has been so successful that it opened a second practice last November with two physicians in neighboring Bellevue, Wash. The firm now is preparing to go national, with plans to open as many as 100 to 200 franchises across the country within five years.
"We believe that every major city has at least 100 families willing to pay for this kind of care," says Dobrowits, 49, a former administrator of Seattle's Swedish Medical Center. He joined MD2 this year to lead expansion efforts.
Since June, Dobrowits has invited physicians from Austin, Texas; Chicago; Los Angeles, and several other cities to visit the luxurious offices and get details on the company's Midas touch. For about $75,000 in franchise fees, doctors can get a full business and architectural blueprint for running their own deluxe practice.
The requirements of MD2 are specific: Each franchise must consist of a pair of internists who have affiliations with prestigious hospitals in their markets. The company is interested in doctors who are already treating the well-heeled. And franchisees must be prepared to recreate the plush office environment, complete with antique artwork and marble-lined bathrooms. Physicians pay a 5% royalty fee on top of the $75,000, and should expect annual overhead to run about $1 million for staff, medical equipment and other expenses. But each doctor can walk away with $300,000 to $500,000 per year from the practice, Dobrowits says.
Legal, ethical issues
Although the market for boutique services appears to be expanding, the phenomenon has also raised troubling legal and ethical issues about the proper apportionment of limited resources and the further social division of those who can afford top-quality care and those who can't.
Arthur Caplan, director of the Center for Bioethics at the University of Pennsylvania, believes it is morally abhorrent to direct resources toward the prosperous at the same time nearly 40 million Americans can't pay for basic medical insurance.
"I think the healthcare system is teetering toward intolerable stratification," Caplan says. "Introducing boutique medicine for upper-class folks in healthcare is a problem, morally, because we still don't have everybody in this country with even the most minimum access."
U.S. Sen. Bill Nelson (D-Fla.), a harsh early critic of boutique services, has proposed a law that would deny any federal Medicare and Medicaid payments to any physician who charged separate membership fees. He has not yet introduced the legislation.
Other critics contend that the membership fee is little more than a cash bonus for a handful of greedy doctors, helping them avoid or sidestep the strict limits on how much they can charge for services covered by federal health insurance programs.
But physicians participating in Medicare have always been free to charge whatever the market will bear for uncovered services such as cosmetic work.
The Centers for Medicare and Medicaid Services, formerly HCFA, is in the midst of a review of medical practices like MDVIP to determine whether they violate Medicare billing regulations that strictly limit physician charges. There is no official word on when the review might be completed.
"When you have a fee--an upfront fee--the question becomes, `Are you, in fact, violating that (Medicare) agreement?' " says a CMS official who requested anonymity.
Paul Ginsburg, president of the Center for Studying Health System Change, a Washington-based research group, says there's nothing to stop a physician from charging wealthy, fee-for-service clients whatever they choose. The problem, he says, arises when companies such as MDVIP offer services only to members, thus denying access to many longtime patients either unwilling or unable to pay the annual fees.
"It's a terrible thing for beneficiaries," Ginsburg says. "In effect, it's the equivalent of an end run around Medicare rules. I have some trouble with that. We're at risk of losing some of our value as far as access to medical care is concerned by having too many tiers."
The Chicago-based AMA, which hasn't yet formulated an official policy on membership-only doctors' groups, has expressed concerns about physicians' moral and ethical responsibilities to their patients.
The Florida Department of Insurance launched an investigation of MDVIP earlier this year after one patient complained about being abruptly dropped from the patient list after refusing to pay the annual membership fee. Citing Florida law restricting information on active investigations, department spokeswoman Tami Torres declined to comment.
Kaminetsky says he made certain that a well-qualified internist who joined his previous practice was available to handle his former patients who were unwilling or unable to pay the membership fee. No patient, he says, was denied access to care.
"I think it's a little bit of a political fiction to suggest that medicine is not already tiered--of course it is," says Kaminetsky, who has been in private practice since 1984. "I'd also point out the private-school and public-school analogy. If you had a beloved teacher in a public school who suddenly announced, `I'm not going to be here. I'm going across the street to the private school,' those kids have the opportunity to (transfer to the private school)."
That's a key part of the logic that is driving many of the concierge-practice firms, including those with lower costs.
For instance, Seattle Medical Associates, the cross-town rival of MD2, recently added a third physician to meet patient demand, and even that isn't enough. Mitchell Karton and Garrison Bliss, the two doctors who started the practice four years ago, now each have more than 100 people on waiting lists.
Seattle Medical charges $75 per month, considerably less than MD2, but the concept is the same. The doctors limit their number of patients to about 800 each, or one-third the number they used to see, so that each patient is recognized as a person, not a file chart. And though the practice is somewhat less flamboyant than MD2, patients are granted many of the same services, such as same-day appointments.
Karton and Bliss agree that the switch to concierge medicine has been worth it. They say they're making about 11/2 times more money now, and they work fewer hours, despite being on call every night and every other weekend.
The doctors shared a successful private practice in the 1980s. But in ensuing years, their traditional fee-for-service business gradually moved toward managed care. Insurers began slashing payments, and their reimbursement fell to less than 50% of office charges in 1996 from about 95% in the early 1990s.
Bliss and Karton each put up about $150,000 to pay startup costs. When the doctors first announced their "membership practice," they lost roughly three-quarters of their patients, despite offering discounted fees to those who were financially pressed. Eventually, however, some of those who left drifted back, and the doctors now are treating about a third of their original patients.
Platinum Health, the other concierge practice in Boca Raton, has signed up eight physicians so far in South Florida but doesn't yet have any patients, says Les Schlesinger, the group's president. He says the year-old company plans to launch a marketing campaign in the coming months to attract a large enough patient base to justify opening the practice, which offers two levels of service.
For $600 per year, Platinum Health provides a range of personal medical concierge services, including help with scheduling appointments, shorter waiting times and help in negotiating the arcane claims-processing system. An annual fee of $1,800 includes those services, along with guaranteed same-day access to all physicians.
"We just haven't got the economics of scale to make it worthwhile now," Schlesinger says.
A model franchise
Kaminetsky's practice is the first affiliate of MDVIP, which hopes to franchise the model in larger cities around the nation. Through its agreement with the medical practice, MDVIP offers staff training, a customized information-technology service and patient-recruitment. The affiliated doctors, meanwhile, receive about two-thirds of the annual fee that is paid by their patients, as well as insurance reimbursements and copayments from patients. Kaminetsky says he expects revenue per doctor to range from about the same as pre-MDVIP levels to as much as 20% higher.
All MDVIP physicians must limit their practices to 600 patients, ensuring personalized attention. Most appointments for members should be arranged within 24 hours, according to MDVIP brochures. And all physicians must be available 24 hours per day, seven days per week by pager. Wait times in a private reception area with amenities, including coffee, cake and fruit, should be "held to a minimum," according to the brochure.
"I think what every doctor wants is increased satisfaction, and to have the ability to get back to being doctors," says Andrew Ripps, MDVIP's chief operating officer. "We want to focus on personalized service."
MDVIP recruits patients, enrolls them as members and then allows them to select from a list of affiliated physicians, says Ripps, who calls the boutique-medicine trend part of the "patient-empowerment movement."
Ripps said about 40 doctors in California, Illinois, Massachusetts and Texas have expressed interest in joining the venture. He expects that number to swell to about 1,000 in three to five years, providing a market of about 600,000 dues-paying members. "We remain convinced that what we're doing is a terrific solution for doctors and patients alike," Ripps says. "Fact is, people want to have a choice--they want to have access to something better. And if people are willing to pay for something out of pocket, they should be able to do so."
Demand for more-personalized medicine has grown enough that even major hospitals and group practices, fearful of losing patients, now are trying their hand at offering concierge services.
Virginia Mason Medical Center in Seattle is the first integrated healthcare system to open an "extended service" clinic catering to patients willing to pay extra for top-drawer care. For an annual fee of $3,000 to $6,000, clients of the hospital's Lewis and John Dare Center receive an array of benefits, including same-day appointments, longer sessions with a doctor, house calls, and, of course, valet parking.
Virginia Mason started the practice in January 2000 after a dozen or so patients left for MD2 and Seattle Medical Associates, both within four blocks of the 280-bed hospital. The Dare Center now has five doctors at two sites serving about 770 patients, and it's opening a third office in Bellevue on Nov. 1.
"The concept was developed in response to patients who wanted other options available to them," says Amin Neghabat, manager of the Dare Center. "Some of our patients had heard about other practices that were providing this personalized service. They wanted us to provide that same level of service."
Although the retainer that Dare patients pay would make for a handsome salary, the five doctors aren't getting rich off the program. The clinic's revenue--about $1.5 million in 2000--goes directly to Virginia Mason, and Dare physicians are paid on the same scale as other primary-care doctors.
But the Dare physicians say they enjoy other perks, such as shorter work hours and closer doctor-patient relationships. Unlike many doctors who see patients every 10 to 15 minutes, they may see only one or two patients per hour, allowing for more comprehensive care.
Other boutique medical practices are popping up around the U.S., including California's Bay Area, and more like them may be on the horizon, observers say.
Virginia Mason officials--concerned about the implication that its plain-vanilla plans are substandard--stress that its offshoot practice simply offers better service, not better care.
"It's important to understand that (Dare patients) are individuals who have made a personal choice, deciding to use their discretionary income to pay for greater convenience and service," Neghabat says. "But greater convenience and service don't equal greater quality of care."
Yet critics say speedier care and additional time with doctors often improve outcomes and may make patients more likely to stick with health routines.
"Patients judge quality by the amount of time physicians spend with them, whether their questions get answered, and the degree to which they participated in decisions about their treatment and health," says Aaron Katz, director of health policy analysis at the University of Washington. "These are not amenities that are unrelated to a patient's well-being."
Few of the proponents of boutique services believe that this phenomenon, now largely confined to several regions on both U.S. coasts, will ever entice more than a tiny percentage of America's doctors--or patients. It might get a boost when, or if, defined-contribution plans gain wider acceptance. Such plans provide consumers with greater personal choice in how their healthcare dollars are spent. But such services are still not likely to sweep the nation.
"It will never be very large," Ripps says.
Adds Kaminetsky: "This is not any type of a global solution to the healthcare crisis. But I do think there is definitely a niche market for this. For one thing, the number of medical school graduates going into primary care is plummeting. The baby boomers are getting older. And the more successful baby boomers are going to be perturbed--if not shocked--by how long it takes to get an appointment with their doctor."