Physician house calls are making a comeback and disrupting today’s healthcare system. Frail patients have a hard time getting to a doctor’s office, and some are unable to leave home at all. Minor problems can escalate into serious ones requiring ER visits and hospitalizations.
New Jersey-based Visiting Physician Services is one company that has specialized in this. According to their modest website, VPS treats minor ailments to serious, chronic illnesses.They don’t claim to be an urgent care or emergency/same day service. They have clinicians on call 24 hours, seven days a week to answer questions and concerns, similar to the amenity most often advertised in concierge medicine. If certain symptoms indicate a more serious condition of an urgent nature, they advise the patient to go to the nearest emergency room. The majority of what they treat in housecalls includes, but is not limited to: Heart Conditions/Hypertension, Diabetes, Chronic Obstructive Pulmonary Disease (COPD), Congestive Heart Failure, Alzheimer’s and Dementia, Depression, Osteoporosis, Post-Stroke care, Balance Impairment/Gait Abnormalities, Parkinson’s Disease, Multiple Sclerosis, Urinary Incontinence/Bladder/Kidney, Infections, Bronchitis/Pneumonia, Back and Neck Pain, Wound Care, and run-of-the-mill coughs and colds. The company runs the business with 6 physicians and 24 nurse practitioners and physician assistants. They have an MBA at the helm on the administrative side and a staff complement of 16 to support the providers on the admin side – but no clinic overhead.
Visiting Physician Services accepts traditional Medicare Part B insurance coverage as well as private payments. They do not participate in Medicare Advantage Plans or HMOs. By accepting “Medicare Assignment” the fees they charge are set by Medicare, and Medicare generally pays 80% of the Medicare-allowable for covered services received after the annual Medicare deductible is met by the patient. If patients have supplemental (secondary) insurance, the supplemental plan is usually adequate to cover the remaining portion. Straightforward, simple, and easy for anyone to model the revenue and the overhead. All insurers actually pay evaluation and management fees for services rendered in the home setting. It just doesn’t have much of a fee schedule for the cost differential of traveling to the patients’ homes.
Maria Todd, the author of the Handbook of Concierge Medical Practice Design, soon to be released by Productivity Press, says that this model can work beautifully, but the physician, nurse practitioner, or PA has to make a decision: Operate an office or operate an itinerant practice. Not both. “A concierge physician can do this model, but the option has to be priced into the membership fee because it has two costs associated with it: one to travel to the patient, which is an unknown until you have a handle on patient demographics and psychographics. The second cost is the lost opportunity cost of maintaining the office while leaving it to go to someone’s house. That too must be fully-loaded as a cost into the membership fee, or your concierge fee can be inadequate to cover the amenities you offer.”
The Independence at Home Medicare Demonstration Project
Healthcare reform under the ACA had this in mind when policy-makers included the Independence at Home Medicare demonstration project. The IAH, a delivery and payment model that uses primary care teams treating patients in their homes, began in 2012 and continues through 2015. According to Todd, the requirements for Participating Practices had two little hooks that may be the reasons for the lack of popularity. She says that “as part of their application, the participating practices were required to state that they have documented experience providing home-based primary care. Most physicians don’t have that, and Medicare can easily check for that in the billing history of the clinician. The program welcomes participating practices that include primary care and other multidisciplinary teams that: are led by physicians or nurse practitioners, are organized for the purpose of providing physician services, have experience providing home-based primary care to patients with multiple chronic conditions, and serve at least 200 eligible beneficiaries.” So not everyone can participate in this program if they can’t show they have experience and a patient load of 200 eligible beneficiaries covered by traditional Medicare.
The primary care teams also include physician assistants, pharmacists, social workers, and other staff. Health Policy wonks must have been really reaching to add that in addition to participation as a single practice, multiple primary care practices within a geographic area could participate as a consortium, but would be treated as a single Independence at Home practice for purposes of the Demonstration. They must have assumed a lot more interest in providing house calls – and the assumption was probably that this would come from nurse practitioners and PAs, not necessarily from physicians. Todd adds, “But even then, where would they get the billing history and the 200 patients to qualify? And these aren’t just any 200 patients… To participate in the Independence at Home Demonstration, beneficiaries must: Have two or more chronic conditions, have coverage from original, fee-for-service (FFS) Medicare, need assistance with two or more functional dependencies (e.g., walking or feeding), have had a non-elective hospital admission within the last 12 months, and have received acute or subacute rehabilitation services in the last 12 months. If they meet all these requirements and provide documented quality care, and save Medicare money, they will qualify for a financial incentive payment. To qualify for an incentive payment, the practice’s expenditures for participating beneficiaries must be lower than the calculated target expenditure, which represents the expected Medicare FFS expenditures of participating beneficiaries in the absence of the Demonstration. Practices are required to meet stringent quality standards and ensure that financial targets are met.
Does that mean that since physicians and other clinicians might not meet all these criteria that they shouldn’t endeavor this model? Todd says emphatically, “Not at all!” Based on what she read of the IAH program, she’s not sure that the incentive payment would make financial sense to go after. “It’s a big risk. Physician and nurse practitioner/ PA entrepreneurs should look at this model on its own merits as a business, absent Medicare incentive dollars. After all, Section 3024 of the Affordable Care Act mandates a demonstration period of not more than 3 years. Then what?”
According to the American Academy of Home Care Physicians, home-based primary care could save Medicare 20 to 40 percent. This is a consideration for ACOs that seek to share in the costs with Medicare in the Shared Savings program ACOs. While a house call visit may cost more than a visit to a physician’s office, house calls could prevent a $1500 visits to the ER and hospital along with an unnecessary ambulance trip charge, often in the range of $2100. The cost of 10 house calls is easily offset by one prevented $1,500 ER visit.
In all that Todd has followed on Concierge Medicine, ACOs and Patient-centered Medical Homes, on LinkedIn and other discussion forums, little has been mentioned about the IAH program, “as if someone forgot it was there,” she adds.”
On the other hand, maybe not… Under the IAH, participating practices had to start with 200 beneficiaries that met all the other criteria, but they could continue to add patients over the course of the Demonstration until the 10,000 maximum total applicable beneficiary threshold was reached. Todd explains that “In the bigger picture, that would actually compete with up to two ACOs since their minimum assignment was 5000 patients, and all the doctors that had those patients to make the 5000 entry threshold would have pledged allegiance to the ACO flag.” Todd says they couldn’t do both, “primarily because the incentives would be misaligned from a business standpoint.” I should mention that Todd is also the author of the best-selling title, Physician Integration and Alignment: IPA, PHO MSO ACOs and Beyond, which was released by Productivity Press in 2012. She’s one of fewer than five very rare experts in the nation that knows the concierge medicine business and the Managed Care and ACO-PHO realms to the degree that she does.
Technology’s disruptive role in the home care arena
But what of all the gadgets and gizmos in the doctor’s office? Pioneer doctors would bring their stethoscope and a few supplies to their patients’ homes in their little black bag. You still see this on Doc Martin, the popular BBC show about an NHS physician in a small town. Now, through laptops, smartphones, mobile labs, mobile x-rays, doctors are actually set free. Pretty much everything that is done in an office visit can be done at home- which keeps many patients out of the ER, out of the hospital and out of nursing homes. Todd adds, “The handwriting is on the wall for hospitals and their Revenue Code 510 upcharges, and for concierge physicians that don’t offer a solid value proposition to compete.”
Will the Home Care Business Model Compete with Office-based Concierge Medicine?
According to Todd, the novelty of concierge medicine as a consumer product will wear off as consumers become more educated on how to shop for a membership package. Michael Tetrault a concierge medcine marketing consultant has self-published some little $1 e-handbooks on Amazon.com targeted to the consumer audience on how to shop for concierge medicine. Mostly he writes about marketing topics and PR, because, according to his bio on LinkedIn, that is his background. He could not be reached for comment. As a marketer, he probably relates well to consumers. But Todd adds that “concierge medicine practices have to have a solid product or they can spend a lot of money on marketing and public relations efforts that will return little on that investment if they offer a poorly designed product that the market won’t buy.”
The traditional doctors will likely be too busy with a constant stream of newly insured patients seen in 3- to 7-minute intervals, like hamsters on a wheel…spinning faster and faster for a smaller piece of cheese. Todd says that she expects that hospitalists will embrace this home-visit option as a way to practice a form of concierge medicine without having to set up an office, especially if a few of them go in together for cross coverage and hire a management services organization to do the billing and logistics. She says that lately the call volume from hospitalists seeking advice on starting a concierge medicine practice has increased significantly. Out of ten calls per week of the courtesy phone consultations she provides, at least three per week have been from hospitalists, a steady trend for the last two-and-a-half months. Many simply don’t have the start-up capital to take the next step, but this house call model could be a viable alternative for them, one without all the membership sales setup costs. “As a new startup, they don’t have much in the way of the costs of an audit of an existing practice. A simple feasibility study is enough to get started, and all the office establishment costs and salaried support staff could go away.”
She added that Mercury Healthcare International can provide all the managed administrative services for physicians that want to enter this model. The monthly service fee combines all the administrative back office support, electronic medical records management, insurance billing, patient accounting, and appointment setting, once the practice is set up. All the clinicians have to do is get themselves to the patients as scheduled and turn in an electronic form that serves as the patient encounter ticket, so the team knows what to bill for the services and the codes necessary. The service doesn’t have to undergo ICD-9 to ICD-10 conversion because it started out as ICD-10 ready. The practice set up is available on a coaching basis, or as a turnkey service for a flat fee.
Time will tell how innovative and disruptive the healthcare industry will become. Consumers will tell you if they like the product or are nonplussed very quickly. We’re in for an interesting few years ahead.
