By Haoming Qiu (Johns Hopkins University, MD Candidate)
Reimbursement schemes that favor interventional care over preventive care have contributed to a growing shortage of primary care physicians in the United States. Numerous studies have shown that a lack of primary and preventive care worsens patient outcomes and increases healthcare expenditures by delaying care until an illness has reached a critical stage. An ounce of prevention is worth a pound of cure is a concept that is self evidently true. Yet, for the past thirty years there has been an inexorable decline in the ratio of primary to specialty care physicians in this country. At the heart of the issue is the simple fact that primary care physicians must work longer hours for less pay than specialty physicians thus inducing generations of American medical students to choose the latter instead of the former. (1)
Countless measures have been proposed to equalize pay between primary care and specialty care physicians but as of today a huge chasm still remain. This has led to the extreme situation today in which even people with insurance (especially Medicaid and Medicare) have trouble finding primary care physicians. Even those who are lucky enough to have a doctor must spend hours waiting for an appointment that can last as little as 5 minutes. The result? More frustrated and sicker patients and untold costs to society in terms of direct medical expenditures and indirect productivity lost.
Fig.1. In a classic market based economy, there will be higher supply and lower demand as prices increase until an equilibrium price is reached such that supply equals demand. Note that this price Pe results in the greatest quantity of services produced and consumed.
In a simple market based economy, a shortage in the supply of primary care physicians would cause prices to rise until there is sufficient supply to meet demand (Fig 1). However, because much of medical system in the US is controlled by third party payers (i.e. insurance companies and the government) prices are not free to change. Instead, a complex mechanism of negotiations and legislations are required to change the amount of money a doctor can charge for his services. In the case of primary care, inability or unwillingness to raise primary care reimbursements on the part of the third party payers has caused a mismatch in the supply and demand of primary care physicians: a classic market disequilibrium. (Fig 2).
Fig 2. In a non-market based economy such as our healthcare system, prices are determined by an outside party such as the government through its control of Medicare and Medicaid reimbursement levels. Artificially low prices cause a scarcity of supply versus demand. This results in a decreased production of services resulting in market disequilibrium. Note that the artificial low price leads to decreased provision and access to services compared to the market equilibrium in Fig 1.
Concierge medicine has arisen precisely because of this scarcity in primary care. The excess demand for primary care relative to the supply has allowed many primary care physicians to impose a surcharge on their patients. Patients pay a retainer fee of usually several thousand dollars per year to their doctors for the privilege of remaining in the physician’s care. In return, the patient is promised better access to care in which they can get current day or next day appointments or can speak to their doctors via cellphone 24/7. The appointment with the doctors is also more comprehensive since doctors are able to receive higher payment for the visit. Thus, concierge practice is beneficial to both patients and doctors. (2) Additionally, because better primary care prevents disease, concierge practices also decreases cost to the medical system as a whole.
Critics of concierge medicine argue that as a greater number of primary care physicians join concierge practices, there will be even less physicians available to see patients who are unable to afford the retainer fee. They argue that discriminating on the ability to pay is not compatible with the ethics of the medical profession.
Fig 3. Concierge medicine allows physicians to raise their price through charging patients a retainer fee. Higher prices attract new doctors into the field thus increasing supply. Prices increase until supply equals demand and market equilibrium is achieved once more. Note once again that greater number of people are able to receive care after prices increase because the supply of care increases.
Although the ideals of medicine is to provide care regardless of reimbursement, the harsh reality today is that pay levels do determine the number of students who choose to enter a particular field. The number of US medical students who choose a career in primary care has steadily declined throughout the past 30 years as primary care salaries are eclipsed by those of specialist. The only lasting way to increase the number of primary care doctors is to increase their average salary. However, the government and third party payers have clearly failed in this attempt and the market has responded through the practice of concierge medicine.
The rise of concierge medicine in this country is fundamentally the result of a poor reimbursement scheme that devalues primary care. Suppressing concierge medicine will only cause a greater shortage of primary care physicians as medical students choose specialty professions. Instead we need to tackle the underlying issue and increase the pay and thus supply of primary care physicians. Only then can we develop a more efficient and just health care system.
MD Candidate Class of 2011
Johns Hopkins University School of Medicine
1. Bodenheimer T. Primary Care Â— Will It Survive? N Engl J Med 355:861, August 31, 2006 Perspective
2. Hartzband P, Groopman J. Money and the Changing Culture of Medicine N Engl J Med 360:101, January 8, 2009 Perspective
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