For sale: body scans, boutique care & second opinions - Retail Health Care

Physician Executive, March-April, 2003 by David Ollier Weber

Remember Marcus Welby, MD?

Of course you do, if you're a doctor. Even if you were too young or too tired out or too sophisticated to tune in to the ABC television network at 10 p.m. on Tuesdays between September 1969 and May 1976, you know that Welby-portrayed by actor Robert Young--embodied the standard by which all contemporary American physicians can measure their fall from grace.

Out of his homey, suburban office that he shared with a younger colleague and a nurse, Welby offered wise unhurried, holistic care to patients with an extraordinary array of diseases, from leprosy to Huntington's chorea.

True, he had to resolve at least two malpractice suits filed by misguided patients during those 172 top-rated episodes. But he was not yet required to haggle with health insurers or concern himself in any overt way with payment or reimbursement paperwork.

He responded to his patients day and night; he visited them in their homes and at hospital bedsides; he had probing conversations with them; he shepherded them through consultations with appropriate specialists. And for those ministrations he was rewarded with affection, respect and a nice, modest, middle-class income.

A lot of doctors and a lot of patients would like to re-experience that scenario.

In an updated way, some of them are.

The twist is, patients are now being asked to pay a fee up front to assure the Welby-esque attentions--an annual retainer that can top $13,000. And the physicians are generally shooting for a book of business that will provide a revenue floor of $1 million a year.

Battling for consumers

"Boutique medicine," "concierge care," "premium practice" or any of several other terms for this new approach ("the name," notes Frank A. Riddick, Jr., MD, FACPE, "depends on the amount of moral influence you want to apply") is just one aspect of a growing market in "retail" or "direct-to-consumer" medical enterprise.

Other such ventures include:

* Unindicated, full-body, computed tomography diagnostic scans advertised in the mass media

* "Medi-spas" that provide alternative or cosmetic services in luxurious surroundings, often in conjunction with specialty medical care by the plastic surgeons or dermatologists who own them

* Executive health programs that cater to corporate clients with comprehensive physical examinations and same-day access to a battery of specialists

* Travel medicine clinics that stock vaccines, preventive health information and accessories for exotic destinations

* Second-opinion and "e-consultation" services provided via the Internet

* Direct sales to patients of health and nutrition products

"The rationale for all this is pretty clear," says Riddick, CEO emeritus of the Alton Ochsner Medical Foundation in New Orleans and a former head of the American Medical Association's Council on Ethical and Judicial Affairs. "In an environment in which traditional sources of revenue are drying up, people are looking for new income streams."

Reimbursements under Medicare continue to drop. Under pressure from insurers and their own medical groups, many doctors are working Herculean hours, breathlessly shuttling 40 or more patients a day through their exam rooms and floundering in a mire of bureaucratic requirements.

There's a backlash, though, and it's gaining strength. In California, for instance, according to a recent survey by the Center for Health Professions at the University of California, San Francisco, more than 40 percent of doctors are now refusing to accept new HMO patients.

And an estimated 2,000 of the state's 50,000 physicians have stopped dealing with health insurers altogether. Patients in these practices have to pay out of pocket (and do their own reimbursement claims processing, if any, later.)

Maxed out on patient load and facing increased costs for malpractice insurance, office space and staff, physicians can do one of two things to increase revenues, Riddick says. "You can either find a new technology to offer that didn't exist in the community before--but there are relatively few of those. Or you can provide a new service, you can try to capture a niche--develop an interest, get a reputation, put a label on it and start marketing it.

"Of course," he adds, "that usually falls into that category of taking someone else's income stream."

Terry's travel

A lot of community doctors apparently lust after the income Brian Terry, MD, makes, even though he is siphoning it off the local public health department.

At least three times a month some other medical group calls Terry's South Pasadena practice-Healthy Traveler-and asks, "What do we need to do to set up our own travel medicine clinic?"

Practice assistant Ramon Bautista says he gives callers the "Cliff Notes version" of how to set up a similar clinic.

But it's not too inspirational.

"This is enormously labor-intensive," he warns. "And the patients are extremely price sensitive. For most immunizations we charge pretty close to what the public health department does. Maybe 10 to 15 percent higher, but we have to stay competitive. We also charge a $39 basic office visit fee. If it were any higher we'd lose a lot of people."