Survey Shows Physicians Using Membership Models in Many Different Ways

Healthcare reimbursement and payment models is always a hot topic. The industry is constantly looking for new ways to reduce costs without compromising care.

The use of value-based reimbursement is on the rise with announcements from CMS and several larger commercial payers this year about increasing value-based programs. This includes MIPS, one component of the “dox fix” bill that passed last spring. It provides increased compensation from Medicare for providers who participate in value-based programs.

But fee-for-service isn’t the only game in town, and practices seeking to reduce the red tape associated with the payer system are looking to various patient-centric, membership models.

In a recent survey, conducted by Kareo and the American Academy of Private Physicians, it is clear that practices are doing everything from dipping their toe in the water of private pay to jumping all the way in.

The survey, Practice Model Perspectives Survey 2015, looked at who is using different practice models, who is thinking about a change, and how private pay models are being used in independent practices. Over 860 respondents provided their feedback. Nearly 700 were clinical providers (MD, DO, NP, PA). Of the clinical providers, 24% were already using some form of direct pay, concierge, or other membership model in their practice. In addition, another 46% said that they were considering a change to one of these models in the next three years.

Clearly, interest in alternate models is on the rise. But the options run the gamut on a wide spectrum. While the majority of providers agree on why they changed or were considering a change—detaching from the payer system, spending more time with patients, and improving work/life balance—the way they are doing it varies.

First, many practices are not using a membership model with their entire patient population. The largest portion of respondents—37%—only had 25% or fewer of their patients on a membership program. The next largest group at 28% had all patients as members. Everyone else fell somewhere in between. This emphasizes the fact that there are many ways to do a membership program that do not require the practice to move fully away from fee-for-service.

An Agile Medical Practice looks at all the options available and picks the one that makes sense for their patient population. The survey showed that this is what many practices using alternate payment models are already doing.

Practices using private pay described themselves in various ways in the survey. About one third said they were direct primary care, one-third said cash practice, and one third say concierge. Again, indicating that one size doesn’t fit all. And, while the average annual fee totaled just over $2,000 (or around $170 per month), there was again a very wide range. About 30% said their fees were generally less than $1,000 a year, with 6% charging over $5,000. The rest were in the middle with almost 60% charging fees equal to between $,1000 and $3,000. The higher the fees, the more likely the practice was to have all patients as members. The lower the fees were, the more likely the practice was to have a mix of members and non-members. Finally, the way fees were charged were different as well. Most practices charged a fixed based on service types (or membership types), but 29% charged based on visit time.

This was supported by conversations I had with attendees at the AAPP Fall Summit. In a conversation with one attendee, I was surprised to learn that he was there because he was considering adding an executive wellness program for a small percentage of the practice’s patient panel. The attendee said it was because he wanted to stay up with the times and respond to changing patient demands, but it wasn’t realistic to change to full direct pay practice as most of the practice’s patients were well insured. On the flip side I talked to another attendee who said she wanted to completely eliminate third party payers and move to a strictly cash based practice because she was fed up with the complexity. And yet another person was joining a larger group of direct primary care practices that offered membership packages because she was tired of the frustrations that come with working for larger health systems.

One size doesn’t fit all as the survey shows. There are many options and avenues for an Agile Medical Practice that is looking to stay independent despite the changing landscape of healthcare.

The full survey results are available at http://www.kareo.com/Agile-Medical-Practice.