Some Primary-Care Physicians Adopting Monthly Membership Payment Model

A growing number of medical practices are avoiding health insurers by charging patients a moderate monthly membership fee. The approach even gets a nod in the Patient Protection and Affordable Care Act (ACA).  One example is Seattle-based Qliance Medical Management, whose three clinics typically charge patients approximately $65 a month for unlimited access to the practice’s 12 physicians and nurse practitioners.  Fees are set according to the level of service and the patient’s age.  Office visits last up as long as an hour; clinics have evening and weekend hours, with e-mail and phone access available.  Normal preventive care and many in-office procedures are covered by the monthly fee; patients pay for lab work and other outside services “at or near” cost, and many medications are discounted.  The average $700 to $800 per patient that Qliance receives yearly in membership fees is as much as three times more than a physician in a standard insurance-based practice might make per patient, said Norm Wu, the company’s president and chief executive.  “So we can have a third the number of patients and get the same revenue per clinician, but with much less overhead,” he said.  The approach lets Qliance channel more money into the care itself — through longer office hours and better diagnostic equipment.

Washington’ Congressional delegation and Governor Christine Gregoire successfully lobbied to include direct-pay practices in the Affordable Care Act.  One provision in the new law lets insurers sell plans on the state-based insurance exchanges that will start operating in 2014 and will be allowed to “provide coverage through a qualified direct primary-care medical home plan that meets criteria established by the Secretary of Health and Human Services.”  Qliance foresees that direct-pay practices will link to custom “wraparound” health insurance policies, providing specialist care and hospitalization.

Washington state law enacted in 2007 encourages “innovative arrangements between patients and providers” such as direct-pay primary-care practices.  The state has 15 other direct-pay practices, according to a 2010 report.  Some are more conventional “concierge” practices, which cater to well-to-do patients, charging as much as $850 a month for personalized, high-touch services.  But the most significant growth is in practices that charge fees between $85 and $135 every month.

The trend is not without its critics, though.  The idea raises many questions, according to policy experts, including how direct-pay primary-care practices can charge monthly fees for preventive care services that will be free under the new law.  Other experts have more basic reservations, although they agree that the current payment model for primary care doesn’t work very well.  “it doesn’t make any sense” to provide primary care outside the health insurance system, said Robert Berenson, a fellow at the Urban Institute. “This is not going to work for a lot of patients who can’t afford the out-of-pocket subscriptions,” he said.

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