Should Medical Doctors Be Able to Raise Their Prices?
A few years ago, I injured my knee while running along Boston’s Charles River. For an initial consultation, I visited two orthopedists who participated in my health care plan. One was a recent medical school graduate. The other had 20 years of experience, was the medical director of a professional sports team, and had a wall full of pictures of famous athletes who had scribbled “Thanks doc for saving my knee.” What was interesting is that my co-pay and the amount the insurance company reimbursed each doctor was the same. In virtually every service profession (beauticians, lawyers, etc.), the more experience and better brand you have, the higher your price is. But in medicine, insurance companies generally pay doctors the same amount for a procedure, regardless of their experience.
To earn more profit and provide better care, some primary care doctors are setting up concierge practices. An in-demand doctor will typically send a letter to his or her patients with a message along the lines of “I currently have 3,000 patients in my practice and now I am starting a 'concierge practice' limited to 700 patients. I’ll continue to accept your insurance, but now you’ll have to pay an additional out of pocket fee of $2,000 per year to be my patient. In return, I’ll offer same day hour long appointments, my cell phone number for emergencies, and additional wellness services.” An additional $2,000 multiplied by 700 patients adds up to a nice $1.4 million bump in gross annual pay.
Many health care professionals I’ve spoken with vehemently frown on this practice. Their general argument is along the lines that concierge doctors create tiered levels of health care and money shouldn’t dictate who gets the best health care. For the moment, we’ll set aside the fact that in the U.S., we already have two distinct levels of health care, those who have insurance and those who don’t.
I agree with our society’s goal of offering everyone access to the good health care…but this goal raises two points. If price can’t be used to help an “in-demand” doctor allocate their time, what mechanism should be used? Today, I have a better chance of winning the lottery than getting an appointment with that famous orthopedist I saw a few years ago – everyone wants to see him. Second, there are plenty of great doctors who don’t have the brand name (e.g., don’t have a publicist pitching them to be included in Boston Magazine’s “Best Doctors” issue) to establish a concierge practice. These well qualified doctors (passed licensing exam, earn continuing education credits, and subject to medical board oversight) welcome patients for no additional fee and provide outstanding care.
Concierge pricing is an ethical issue that must be decided by our society and the medical community. And while most doctors enter the field to genuinely help people, at the end of the day, they run a business. As in other businesses, they have to meet a monthly payroll, pay for overhead, invest in new technology, and repay educational loans. Before making new investments, potential and existing doctors ought to know if their prices are going to be capped by an insurance company or the community, don’t you think?
