Here is a template for an elegant way to explain healthcare reform to your patients and segue into your announcement to transition to concierge medicine as a result of careful consideration. You can do this without sounding like sour grapes.
I’ve decided to share this openly for a number of reasons. First, since about October 2013, we’ve had an increase in calls from physicians who have decided to transition their practice to concierge medicine. One of the most troubling apprehensions they frequently articulate is how to announce their decision to their existing patients. Second, as you may be aware, I am wrapping up the final edits in my book, the Handbook of Concierge Medical Practice Design (2014, CRC |Productivity Press, New York). I wanted to include this in the book along with hundreds of other tools I’ve shared. Third, I know that a lot of consultants charge physicians to come up with the whole announcement strategy and its “reveal”. That’s their prerogative… but to me, that’s like charging me for Wi-Fi in my hotel room. It is my opinion that to do so is tantamount to profiteering at a time when the client is most vulnerable. I don’t need to do that. So here is a template of an elegant, matter of fact way to explain how healthcare reform has changed your business and what you’ve decided to do to continue your practice. I hope it helps you.
ObamaCare, officially called the Patient Protection and Affordable Care Act, is a health care reform law signed in 2010 By President Barack Obama. Many of the law’s provisions are already in effect and the rest continue to roll out until 2022. Important provisions include a mandate for most Americans to have insurance by 2014 and the opening of health insurance marketplaces for subsidized insurance.
The Act is an attempt by the government to increase the quality, accessibility, and affordability of health insurance. Contained within title I of the Act – Quality, Affordable Health Care For All Americans, are almost all of the new benefits, rights, and protections, rules for employers, rules for insurance companies, mandates to buy insurance, tax credits and cost assistance and information on the State insurance exchanges and alternative State health programs.
The Triple Aim Initiative is a three part strategy to optimize performance of the American health system. It goes like this: 1) improve the patient experience of care (including quality and satisfaction); 2) improve the health of populations; 3) reduce the per capita cost of health care. And that, on a macro scale, is really what health care reform is all about.
As you can imagine, health care reform is making the practice of medicine much more challenging these days. It is challenging because part of health care reform requires more precise clinical documentation by my staff under a new coding system called ICD-10-CM; extra, ongoing training on new and expensive Electronic Health Records (EHR) and practice management software systems; and getting used to new clinical workflows according to “evidence-based” treatment protocols that are generally thought to improve outcomes and reduce costs by standardizing treatment decisions. These evidence-based protocols assume that the patient also upholds their responsibility to follow physician recommendations, take their prescribed medications, and be proactive about preventive health tests and periodic screenings.
The evidence-based guidelines and protocols come from the mountains of structured and unstructured data that we record in the EHR. These days, as my patient, you participate in health care reform every time you see me; you are the source of the mountains of structured and unstructured protected health information (PHI) now forming a mega foundation of “big data” accumulating in registries and health information exchanges (HIEs) across the country. How we share your de-identified data and analyze it takes time and money. We do this so that we can put it to use to form the body of evidence that defends the treatment decisions we make. These decisions are based on clinical and outcomes data, that are defensible as “medically necessary”, which is a requirement that must be met so that your insurers will pay the claims and not argue that our chosen approach to treat you was not prudent or the least expensive, professionally acceptable, ethical treatment.
As you can imagine, all of this health insurance reform takes time and investment that I didn’t originally build into my business strategy and operating budget when I originally established my medical practice. Like many other physicians who practice traditional health care delivery, when I developed my business plan and shared it with the bank, I made assumptions about costs, revenue, workflows, software and equipment to run my practice, staff needed to treat patients, do billing, contract with health insurers, and appeal the denied claims which, on average total about 14% of claims, nationally. For me to afford to contract with each health insurance plan, is a business expense that on average, runs about $8000 to $10,000 to keep my staff trained, work out all the due diligence, have the contract reviewed, and then spend time negotiating with the representatives from the company. The payments that they send me, no longer have the margins in them that enable me to recover that contracting expense, plus the costs associated with the appeals of the denied claims, the copies they want of medical records, and all the reports and data they now require that we send so that they can do their analyses to run their business, in addition to the cost of practicing medicine.
As a business owner, I’ve had to take a long hard look at this new situation. If I were in the software sales business, I guess I could find a way to get more customers to cover the shortfall in revenues that are now required to run my business. I could have the software duplication supplier just make more copies and I’d have more product to sell on the shelf.
But I’m not. For my work, I chose to take care of people’s health. That requires time to listen, to examine you, and time to consider and research the evidence. I must also find the time to attend continuing medical education courses and keep my skills up. My time also must be divided into the time required time to counsel my patients on what they should do, answer their questions, and work through some complicated health matters with patients that have multiple chronic problems, some of which are life-threatening problems. We also work together to attempt to prevent chronic health problems, and work together to maintain good health. As a primary care physician I also coordinate the care for patients who take multiple medications for complicated health situations that are prescribed by a number of different doctors.
So as I was taking stock of all this, it occurred to me that I had to make a really tough decision. I can’t run my business outside the law. I have to comply with all these new insurance reform requirements – Just like we all have to stop at stop signs. I’ve invested the money required for software and staff training for the new systems, so now, we’re compliant (and about $X lighter in the bank account). I know that there will be ongoing costs to maintain those systems and the staff training. I’ve adjusted the business budget projections to account for that. I’ve also budgeted for the new medical technology that I need to deliver treatments and diagnostic testing and screenings and keep up with the standard of care of the community — my work tools, if you will.
In order to cover these ongoing expenses and pay myself and my staff a modest salary and the usual employee benefits, I calculated that when I take into consideration the reimbursement from most insurance plans for the average office visit, I would need to increase my patient visits and services volume by about 40%. That’s really difficult. You see, unfortunately, healthcare reform has taken a significant chunk of my time away from direct patient care in order for me to remain compliant with all the regulations. So to increase my patient volume by about 40% means I would have to cut office visits to about 3-1/2 minutes per patient in order to fit the amount of patients into the available time. I don’t know about other doctors, I can only take responsibility for my own actions. I don’t want to practice medicine to that standard. The way I want to practice medicine doesn’t allow me to work that way.
In researching solutions, I discovered a new way that doctors are finding a way to remain compliant and still treat patients at the standard of care they want to follow in their practice. It’s called concierge medicine. It goes by some other names, like membership practices, direct practices, but it works like this: I can reduce the number of patients for whom I am responsible to a number that I can manage given the time left over for direct patient care after my regulatory compliance requirements in order to continue working as a doctor in the USA. I will still accept your insurance for the medical services for which reimbursement is available. But because that is not adequate to cover overheads, I’ve decided to add a modest supplemental membership fee. By doing this, I can reduce the number of patients from about 4000 patients to 300. The supplemental membership fee will cover certain amenities of membership that are not covered by your health insurer. This modest membership fee enables me to render the care for my patients the best way I can and to practice medicine in a way that allows me to maintain a solid doctor-patient relationship with my remaining 300 patients. The membership amenities include the following services and benefits not covered by insurance: (list). I really believe that these amenities are necessary to render the level of care I’ve chosen as my brand promise.
I realize that not everyone is in a position to pay the membership fee. the cost of a membership amounts to about the same money many of you spend on a cup of coffee at your favorite coffee shop each day. For those of you that choose to remain, I will only have 300 membership contracts available, so you’ll need to decide soon. Once they are filled up, I will establish a waiting list. For the remainder of my patients who choose not to purchase a membership, I can offer you the following options: (list).
One way that this is used is to send a letter to patients that simply states you plan to have a Town Hall meeting about healthcare reform and you’d like them to join you at some location to talk about your viewpoint on healthcare reform and where the nation is headed. Please do not use this template for that letter. This template is for a face-to-face presentation at a town hall event. If you send it out, I can promise you it won’t have the same compelling effect and you will probably find that you generate resentment because they won’t be able to ask questions and hear others ask questions. I also would not take time during an office visit to do this. People have busy schedules to keep and they didn’t plan to have this to consider in addition to the reason for their visit.
Don’t worry that it is too much for all of your patients to grasp. It touches on business points that the target market you want to attract will understand. It won’t please everyone. You will also not have everyone attend your town hall meeting. You don’t really need all 4000 of them. You only need 300 or whatever your target membership number is. Generally, that’s about 10% of your existing practice.
If you’d like assistance with your transition, it would be our pleasure to assist you. By the way, if you’d like this in a PowerPoint presentation, send me an email request and I will send you a beautiful PowerPoint with professional graphics you can use for your town hall meeting.