When physicians first started to advertise to attract patients, some in the medical community scoffed at the idea while others followed, blazing new paths into uncharted territory. Health care advertising flourished and is now widely accepted.

Today, a new phenomenon called “retainer medicine” is crossing the country. “Boutique medicine” or “concierge care,” as it is also sometimes called, is based on the premise that patients are willing to pay steep annual fees on top of their regular insurance premiums for such features as house calls, around-the-clock service, home delivery of medicine, coordination of specialty care and same-day lab results.

Critics of retainer medicine argue that it is unethical to treat the rich and exclude the poor, and charges of greed abound. Sen. Bill Nelson, D-Fla., said retainer medicine is “outrageous and unethical” because it “sets a bad precedent for the future of our health care industry.” Nelson has proposed a bill that would deny Medicare payments to doctors who charge retainer fees. The Centers for Medicare and Medicaid Services are monitoring the issue of retainer medicine but have not yet taken a position.

Outgrowth of managed care?

Retainer medicine is the result of the growth and consolidation of managed care delivery systems in the United States, according to a report by Michael J. Pulaski of IntelliMedica Inc., a practice management consulting firm. With managed care, patients are unhappy because they have less access to lower quality of care, while physicians are burned out and exploring other options.

Physicians cite money and decreased workloads as the biggest reasons for switching to retainer medicine. Most come from managed care environments where reimbursements were declining while patient loads were increasing.

But the key motivating factor is money, and it is questionable whether retainer medicine is a sustainable business model, said David R. Mauerhan, MD, a surgeon at the Carolinas Medical Center in Charlotte, N.C. “Given the small numbers of patients who would pay this kind of money for this type of care, there isn’t room for too many doctor practices like this in any area except the largest urban environments. In areas where access is high and quality is good or excellent, I doubt people will pay the extra premium over the long haul.”

Better care, more time

Physicians who practice retainer medicine argue that because they treat a limited number of patients, they can provide better service and high-quality care without worrying about money. They also feel that they get to know their patients better, resulting in a low patient turnover rate.

The arguments for and against retainer medicine have drawn the attention of regulators. The Agency for Health Care Administration, Florida’s regulatory body for physicians, recently closed its investigation of MDVIP, a local retainer medical practice, because it found no evidence of wrongdoing.

But five Congressmen believe retainer medicine practices may violate Medicare laws and have asked Health and Human Services Secretary Tommy Thompson for clarification. (See related article in print edition: June 2002 issue, page 28.)

The American Medical Association has also joined the debate. “The AMA has always had a long-standing policy that physicians practice science-based medicine within their area of expertise, abide by state laws and use appropriate ethical principles to provide personalized and high-quality care. We shouldn’t pass judgment yet until we see what evolves and get more information,” said Yank D. Coble, MD, the AMA’s president elect.

Two Seattle physicians, partners Howard Maron, MD, and Scott Hall, MD, pioneered the earliest retainer medical practice in 1995. Maron had been the team physician for the Seattle SuperSonics and saw how well the players were treated. He believed other patients would pay to have a comparable level of care.

Maron and Hall created MD2 International, a retainer medical practice whose annual fees range from $10,000 for individuals to $20,000 for couples. MD2 promises a maximum patient base of 50 families per physician with services offered in a four-star hotel environment. The idea was so popular that a second office opened in Seattle and MD2 is hoping to franchise its concept nationwide. For approximately $75,000 in franchise fees, doctors can purchase a blueprint of how to establish a retainer medical practice of their own.

Other companies that offer lower-cost premium services have emerged. MDVIP is one of a handful of for-profit companies that recruits retainer patients for practices. When physicians contract directly with MDVIP, they must agree to limit their practice to 600 patients to assure quality of service and care.

Lower retainer fees

Boca Raton MDVIP physician Bernard Kaminetsky, MD’s patients pay an annual fee of $1,500 and per visit fees that can range from $50 to $75 in addition to their regular health insurance. Kaminetsky and his group are the first affiliate of MDVIP, which also hopes to franchise its model nationwide.

MDVIP provides staff and technology training, and participating doctors have comparable, if not higher, salaries than before they became members. “I used to spend my whole day on a treadmill just trying to get through the day; my love of taking care of people was lost. Now as an MDVIP physician, I have discovered what being a doctor is all about again,” Kaminetsky told Today in Cardiology.

The first integrated health care system to open a retainer medicine program was the Lewis and John Dare Center at Virginia Mason Medical Center (VMMC) in Seattle. VMMC has 400 physicians, five of whom work for the Dare Center. Single patients pay $3,000 annually and couples pay $5,000; doctors must keep their patient load at 300.

Surprisingly, many patients are the elderly and chronically ill, not the high-end clientele often associated with retainer practices.

“We have some seniors whose children have paid the retainer fee for peace of mind to ensure that their parents receive good service and care,” said John Kirkpatrick, MD. Even though the Dare Center physicians provide premium service, they are still paid on the same scale as other primary care physicians.

“The barriers to enter into this niche are significant — large amounts of money, marketing savvy and chutzpah are required,” Pulaski said. The practices are best established in affluent areas. Physicians looking to start such practices need to be older, locally prominent and risk-takers with outstanding reputations. They need to obtain up-scale offices, utilize sophisticated technology and hire college-educated staff.

Above all, retainer medicine physicians must emphasize customer service. If accessibility, personalized attention, strong doctor/patient relationships, efficiency and quality care are missing from a medical practice, then a patient will choose to go elsewhere.

“The concept of concierge care is good. In fact, if a doctor doesn’t already have these elements in place, then he’d better go back to the drawing board,” Zupko said. “Patients now have a greater amount of choice amongst physicians and I would prefer to be the destination practice if I were the physician.”