It’s Time for Health Systems to Adopt a Concierge Medicine Service Line Strategy

Looking at the Current Concierge Medicine Competitive Landscape

Health news about the COVID‑19 pandemic is constantly in flux, highlighting the necessity of reliable, evidence-based health advice for consumers to make personal health decisions. Having spent two years sifting through conflicting guidance from traditional media outlets and social media platforms, more Americans are realizing the benefits of personalized care and greater communication with their healthcare provider.

Unlike traditional medical practice models that frequently require high quantities of patient throughput, concierge medicine practice models that allow for smaller patient panels increase the amount of time providers can spend with patients during examinations and between scheduled visits. This additional time enables providers to conduct thorough medical examinations and design personalized, proactive health optimization plans and treatment approaches for their patients. This holistic, integrative approach has demonstrated improved health outcomes.

Consumers who can afford concierge medicine memberships value these services. According to a recent poll from the Harvard T.H. Chan School of Public Health, NPR, and the Robert Wood Johnson Foundation, 22% of the top 1% highest-income adults currently participate in concierge medicine.

As expected, the supply of concierge medicine providers and membership-based medical practices has expanded nationwide to meet growing market demand. Most leading health systems are adopting some type of premium clinical service offering. Of the top 25 academic medical centers (AMCs):^[1]

• 76% offer executive health programs.
• 40% provide concierge primary care medicine.
• 28% offer both.

Only 3 of the top 25 AMCs offer neither executive health nor concierge medicine services.

While reliable industry statistics on concierge medicine providers and patients are scarce, here is what’s clear about the concierge medicine market and competitive landscape:

• The market for concierge medicine, executive health, and other premium clinical services (e.g., integrative and functional medicine) is here to stay and is growing. The number of advertised programs continues to rise (see above statistics).
• As more providers enter local markets, membership pricing, perceived provider prestige, and in-scope service offerings—including premium engagement, medical, wellness, and convenience—will be key differentiators for patients when selecting concierge medicine programs.
• Organizations with robust and innovative patient engagement platforms, broad patient care continuums, strong local brand reputations, and easy access to capital and investment resources have a competitive advantage in attracting concierge medicine patients in target markets.
• Health systems have the resources to develop most, if not all, of these competitive advantage characteristics compared to independent concierge medicine practices and physicians affiliated with concierge medicine management companies.

Overcoming the Stigma of Concierge Medicine in Nonprofit Healthcare Organizations

Historically, health systems have shied away from entering into premium healthcare or concierge medicine services. Within the industry, there has been a misinformed stigma about the potential for concierge medicine to unintentionally establish a multitier care delivery system that offers priority access (i.e., “skipping the line”) or a higher quality of patient care to individuals with the means to pay for it.

The entire healthcare industry needs to be very clear about this issue: any health system environment that prioritizes access to care or provides higher-quality care to one patient group at the expense of others is operating unethically and may be noncompliant with federal and state governments, if Medicare and Medicaid programs are accepted.

However, when planned and executed properly, a concierge medicine service line offering provides a distinct value proposition for many health systems.

1. The existence of premium or concierge medicine services and the care delivered as part of these programs should not come at the expense of access to, or quality of, care the health system provides to the general population. On a basic level, this means maintaining equitable patient access and appointment availability across the patient population. In terms of workforce planning, this could mean ensuring concierge medicine provider positions are filled by net-new external hires or by providers who would have otherwise retired, rather than poaching providers from traditional practices, which would, in effect, reduce access options for the general population. Above all else, care access, care quality, and evidence-based medical treatments should be standardized, optimized, and uniformly delivered to all patients regardless of their ability to afford necessary care.
2. The majority of, if not all, operating profits from concierge medicine services should be reinvested into the system to fund negative margin or nonreimbursable, mission-critical patient care programs. The frequently heard “no margin, no mission” phrase is a reality for many health systems. Concierge medicine programs are a recurring, high-operating-margin source that continuously fund programs that require an organizational investment.
3. Health systems’ foundations, development teams, or affiliated philanthropic organizations should regularly approach concierge medicine members for contributions. Enrollment in a concierge medicine program indicates a strong likelihood that patients are affluent and have financial means to contribute to patient care endowment funds and capital campaigns.
4. Communication about concierge medicine program services should be transparent to the public. Communications should clearly articulate what services are included in a program, how much it costs, and how the program will sustain access and care quality across all patient populations and support mission-critical care programs.

Seizing the Concierge Medicine Service Line Market Opportunity

Without a doubt, the market demand for services that deliver highly customized, individually tailored healthcare will continue to increase. Organizations prepared to meet this demand with novel, unique, and well-executed concierge medicine service offerings will emerge as industry leaders in this growing, high-margin market segment.

Furthermore, health systems that are serious about meeting patient service needs across populations and being a market leader in innovative, consumer-centric healthcare service offerings need to integrate concierge medicine services into their patient care portfolios. Those that do so will have early-mover advantages and a competitive lead in available service offerings over independent and slower-to-move healthcare providers.

Published April 13, 2022