GAO Report Focuses on ‘Concierge Medicine’

Published November 1, 2005

“Concierge medicine” is now before Congress. The U.S. Government Accountability Office (the new name for the General Accounting Office) issued a report in August looking at how concierge medicine is evolving in the United States. The study, Concierge Care–Characteristics and Considerations for Medicare, was sent to the Senate Finance Committee and the House Ways and Means and Energy and Commerce Committees.

According to the report, “Concierge care is an approach to medical practice in which physicians charge their patients membership fees in exchange for enhanced services or amenities. Concierge physicians typically care for fewer patients than do doctors in conventional practice, and they are more readily available to member patients, for example, by cell phone or same-day appointments.”

The focus of the report is on whether such practices run afoul of Medicare rules. In principle, they do not, the report states: “[Health and Human Services] has determined that concierge care arrangements are allowed as long as they do not violate any Medicare requirements; for example, the membership fee must not result in additional charges for items or services that Medicare already reimburses. Even with this narrow focus, the report provides a pretty solid baseline of information about the whole trend.

The GAO identified 146 practices that offer concierge care and surveyed 112 physicians. As far as I know, it is the first objective study of this rapidly growing market. Some of the findings include:

  • Growth has been very strong, with 10 times as many physicians in concierge practices in 2004 as there were in 2000, but the total number remains small.
  • The practices tend to be concentrated in urban areas on both coasts, with hot spots in the Boston, Philadelphia, Washington, Miami, and Seattle areas.
  • Seventy-six percent of practices offering concierge care continue to participate in Medicare.
  • Virtually all concierge care practices are focused on primary care.
  • Annual fees range from $60 to $15,000 per year, with about half reporting fees between $1,500 and $2,000.
  • To date, concierge medicine has had no discernible negative impact on Medicare beneficiaries’ access to physicians.


HSC’s Head Scratchin’ Site Visit Report

The Center for Studying Health System Change (HSC), headed by Paul Ginsburg and funded by the Robert Wood Johnson Foundation, has released the latest findings of its periodic site visits to 12 communities around the country.

The report, “Initial Findings from HSC’s 2005 Site Visits: Stage Set for Growing Health Care Cost and Access Problems,” is enough to leave you scratching your head in wonder at the internal contradictions.

For instance, the report begins by saying, “The most striking development in the 12 health care markets tracked by HSC is the ongoing [hospital] building boom and rapid expansion of both inpatient and outpatient capacity.” But it later goes on to say, “[P]roviders are struggling to keep up with growing demand for [safety-net primary care] services. Many community health centers and safety net hospitals report that funding support has not kept pace with the increasing numbers of uninsured patients they treat.”

The authors fail to make a distinction between or discuss whether there are differences among for-profits, not-for-profits, and public facilities, and they fail to define what constitutes a “safety-net hospital.” In their attacks on specialty hospitals, the authors report all of these types of facilities claim to be burdened by charity care and the obligation to take care of “free riders.” Yet it is apparently not such a burden that they can’t “rapidly expand” their capacity.

The problem with the paper is that it doesn’t address any of this, and thus provides very little understanding of what is really happening “out there.”

Disparages Consumer-Driven Products

The report also comments on the consumer-driven health care movement. It says, on one hand, “[P]lans and employers have had few initiatives other than increased cost sharing to control cost growth.” But it then adds, “[H]ealth plans largely have focused on new product designs aimed at engaging consumers to make more cost-conscious decisions about service use and choice of providers.” That sounds like a lot more than mere cost-sharing (known pejoratively as cost-shifting) to me.

The report notes, “[P]lans across the 12 markets quickly developed consumer-driven product,” but it calls enrollment “limited.” “Limited” is one of those all-purpose disparaging words one uses to indicate disapproval of an idea. Meanwhile, the report says approvingly, “Aetna’s high-performance network has gained much higher enrollment than expected.”

Does that mean Aetna’s enrollment is unlimited? I suspect enrollment in consumer-driven health plans is also “higher than expected”–certainly higher than HSC expected.

Overall, this is another curious report that reveals more about the policy preferences of HSC staff than it does about what is happening in the 12 markets examined.


Greg Scandlen ([email protected]) is founder of Consumers for Health Care Choices.