Concierge Eye Care: Opportunity or Impossibility?
Before you answer, understand the risks and rewards of this consumer-centric model of eyecare practice
SCOT MORRIS, O.D., F.A.A.O., CONIFER, COLO.
With recent changes in healthcare and the increasing complexity of managed care, concierge medicine has become a hot topic of conversation in the eyecare space. And for a select few, it is becoming a reality. While this endeavor is not for the faint of heart or the ill-prepared, concierge medicine provides a fresh opportunity for select practices and creates a new niche for others.
With a concierge approach, “I get to practice the way I want to practice,” says Mary Boname, O.D., M.S., F.A.A.O., president/owner at Montgomery Eye Care in Skillman, N.J.
This article explains the advantages and disadvantages of this very different business model. In addition, it discusses the two models of concierge care and how to make the transition to concierge eye care.
In concierge medicine, the patient pays an annual fee, or retainer, in exchange for enhanced care. The fees and levels of service differ from practice to practice. About 75% of concierge practices maintain their traditional practice (the mixed model), but take additional fees from patients who receive special perks, treatment and services, says the Spring 2012 issue of Wharton Magazine. The most likely candidates for concierge service, then, are consumers who desire, and more importantly, are willing to pay for higher levels of product and services.
From the consumer perspective, the concierge arrangement offers greater access during the most desired hours in a more relaxed, non-rushed environment.
“This is old fashioned care — the way it is supposed to be,” says Cary M. Herzberg, O.D., the owner of Herzberg Optical in Aurora, Ill. The Herzberg Optical website explains that the practice offers “a complete and thorough eye examination that allows the doctor and patient to work together in order to give the best possible eye care required.”
The concierge practice consumer has opportunities for enhanced care in terms of services, time and face time with the doctor.
For example, concierge patients may have access to a greater product inventory. This is a consumer-centric approach with direct access to a personal consumer advocate (think personal shopper) with whom patients can communicate their needs, concerns and wants.
The provider perspective
For the provider, a concierge-style practice means less volume and more time with the patient. It can also mean a higher profit margin due to the elimination of managed care-mandated discounts.
However, the concierge model has disadvantages. Initially, practice owners may mistakenly believe that less volume leads to diminished profits. After all, how many practices earn little or no money on a single patient because they “will make it up on volume?” (Think about it for a minute, and then smile.)
Another disadvantage is that it takes time to fully develop the concierge model. During the transition, the practice may experience decreased profitability.
A dramatic shift in practice
Some of the more significant changes that take place in the shift from a traditional to a concierge practice include the following:
► Office atmosphere. The office must provide an impression of a first-class experience through design, décor, staff, equipment and technology.
► Purchasing and inventory management. Practices must alter their inventories to carry more customized products to satisfy concierge patients.
► Patient care. Concierge patients typically enjoy more time with the doctor and greater access to services that insurance won’t cover. With the concierge model, “we get to hang out with people because we have less volume with greater relationships and improved profitability,” says Dr. Herzberg.
► Scheduling. The focus shifts dramatically from “going faster” and filling more appointment slots (to increase revenues) to scheduling based on the concierge consumer’s personal timeline — think same-day appointments and/or 24-hour access.
Though the provider and the staff may be available for non-conventional office hours (the traditional 9 to 5 day and 40-hour week may disappear), the practice doesn’t necessarily add hours to its day.
For example, Montgomery Eye Care’s website lists the practice’s hours as 10 a.m. to 7 p.m. Tuesday through Thursday, 10 a.m. to 6 p.m. Friday, and 9 a.m. to 3 p.m. Saturday, with the office closed Sunday and Monday.
► Efficiency. Both the change in hours and the fundamental philosophical shift to greater doctor face time impact operational workflow.
► Staffing. Due to less patient volume, concierge practices employ less staff who are “patient-first” friendly and have the “do-what-it-takes-to-make them-happy” service attitude. This may mean retraining or changing your current staff. It may also mean changing how the practice recruits in terms of qualification and personality.
Concierge Practice: Your Next Steps
1. Perform a comprehensive demographic review to discover whether a concierge practice model is attainable.
2. Survey your current patients as to their desire for a concierge service and their willingness to pay for it.
3. Develop your menu of premium services and fees.
4. Review your managed care contracts to ensure concierge-style practices are compliant with their requirements.
5. Create a marketing plan and the necessary materials.
6. Develop a clear and detailed consumer contract that explains the services and product terms.
7. Develop your timetable for service introduction (e.g., marketing and dropping of certain managed care plans.)
The pure concierge model
In the pure concierge model, the practice accepts little or no managed care (vision or medical). Consumers pay an annual membership fee that may include an option for priority access, as well as preferred consumer discounts as high as 40% off traditional “managed care” fees for products and services. Pure concierge practices can offer patients these savings because there are no managed care contract rules to follow. Priority access includes immediate access during a set of business hours or extended hours.
The concierge practice will become more specialized than traditional practices, featuring products and services — such as specialty contact lenses, refractive care, medical services, vision therapy — that may not be available in other practices.
For example, Dr. Herzberg specializes in orthokeratology in addition to a variety of other contact lens options. The practice offers those services that are in great demand by certain subsets of patients.
Under the concierge model, an exam may take as long as necessary to provide optimal consumer-centric care.
For instance, the Montgomery Eye Care website states, “We personalize your care, and never put a time limit on your eye exams or consultations.”
In the pure concierge model, it is likely the consumer will have a central point of contact, a “consumer advocate,” who acts on their behalf.
The mixed model
In the mixed model, concierge medicine is offered as an alternative to or in conjunction with the managed care model. In many instances, practices may choose this model as their primary foray into concierge medicine, with the long-term goal of adopting the pure concierge model. This model brings its own challenges and opportunities.
Consumers may pay an annual fee for increased access to the products and services not covered by their managed care plans. This care may include discounts above and beyond the managed care offerings, provided the discounts are legal and ethical in conjunction with the provider’s managed care contract responsibilities.
As a result, managed care patients who opt out of paying for “enhanced access” may have to wait or be rescheduled. This brings its own set of challenges (think unhappy patients) and, perhaps, opportunities to upsell the concierge model to those who are unwilling to wait.
This model also requires some delicate planning both in terms of marketing and scheduling. The practice must “plan” for unscheduled “drop-ins” by “preferred” patients. The membership fee does not necessitate that the provider spend more time with the patient, just that he or she has enhanced access. Spending extended time with a patient who is still under the managed care umbrella may result in an unprofitable experience for the practice. As each practice’s workflow efficiency differs, the practice must determine the “maximum” acceptable (or profitable) time that the practice can spend with “premium” managed care consumers.
Like the pure concierge model, the mixed model may include a consumer advocate. Also, it creates opportunities for the practice to offer specialty services and product sales.
One negative in the mixed model: The provider and staff may be required to be available to their traditional managed care patients during predetermined hours and available to their “premium” consumers in excess of these normal business hours. To solve this problem, the practice must employ finely tuned staffing levels that balance the schedules of the doctors, staff and both concierge and non-concierge patients.
Tips for the transition
The process of transitioning to the concierge model does not happen overnight. It takes strategic planning to transition the business model to where you need it to be, whether it be the pure concierge model or the more transitional mixed model business (see “Concierge Practice: Your Next Steps,” page 24).
Regardless of which model you pursue, address all legal and ethical issues, including those surrounding managed care vision plans, medical insurance and patient care. It may be beneficial to consider the services of an attorney familiar with retainer-style practices.
The transition requires strategic changes in personnel in terms of recruitment, training and even restructuring responsibilities. If necessary, update employee handbooks to reflect these changes.
One of the biggest challenges in adopting the pure concierge model is to implement strategies to purposefully eliminate managed care plans from your business. Consider this suggestion: Each year, eliminate the least productive or least profitable plans from your offerings. In conjunction, have a staff member review the differences between your traditional model of care and the concierge model with every consumer each and every visit.
Initially, some consumers may leave the practice because they want to “use their insurance benefits.” However, if the business is designed to be truly consumer centric, then consumers, if educated properly, will return to the practice.
Providers and their staff must educate the consumer on their actual costs and savings with managed care vs. the same services and products through a concierge-based model. This educational process can be initially time consuming. Once again, proper staff training about the necessary scripts and having the necessary educational tools for the consumers is crucial to success.
The transition to concierge medicine also requires a modification of the services and products provided. The rate or transition depends largely on the rate of successful program implementation within the office. Inventory decisions, purchasing patterns and profitability decisions are a dynamic process that will undergo many modifications and progression during the transition process. Those who practice concierge medicine must be comfortable with these changes. “The key is to believe in yourself and your business,” says Dr. Boname.
The future of eye care?
Eye care is well positioned to adopt the concierge model, particularly because of the retail side of our business model. As discussed, consider the advantages and pitfalls. Moreover, realize that moving to this model requires careful strategic planning and strong business acumen to adjust to the changes in the practice consumer demographic and the managed vision care models. That said, for many this may just be the future of eye care as we know it. OM