Concierge Medicine: 5 Things to Consider Before Joining an Affiliate Network Company

Concierge medicine is a young industry model gaining much talk and consideration among independent doctors. Personally, I think that the model is a good one and worth serious consideration for primary care.

I have seen ambitious doctors start their own concierge practice and those that do can be successful on their own. However, most doctors will likely prefer to work through a concierge medicine company network, like MDVIP or Specialdocs Consultants.

I receive questions from my clients regarding concierge medicine companies as do many of my colleagues from the National Society of Healthcare Business Consultants. The business model of concierge or direct-pay medical care is talked about often and a growing topic at industry educational meetings.

Here is my summary of 5 things you should keep in mind if you’re considering joining an affiliate network company.

1. Concierge medicine companies are profit-driven national entities

As with any negotiation, it’s wise to be aware of the motives on the other side of the table. Concierge medicine companies are national entities, with profit-driven priorities.

Sometimes these companies change ownership. When that happens, the direction of the company may change or services are cut to become more profitable. I have seen this happen with practice management systems being used by a physician’s office. A doctor will sign up with a company one day and then before the support agreement is complete the office is dealing with a new owner, which is not always a better situation for the doctor’s business. The thing to remember when entering into an agreement is that a company’s culture is key and that culture can change depending on the ownership.

2. You are being recruited!

Concierge medicine companies are in business to recruit primary care physicians. So if they are telling you what you want to hear, it might be true – or, it might just be what you want to hear!

Physicians that are recruited will typically score high on the “love” factor when the recruiter does a survey of the physician’s patients. It’s not uncommon to have a high patient satisfaction rating.  After all, the patients that currently opt to see you do so because they like you.

Keep in mind that you are being recruited and don’t fall prey to simply believing that your practice is prime for signing a contract. Take the time to consider all your options.

3. Beware of a restrictive terms

The contract you will be asked to sign may include restrictive covenants including a covenant not to compete. Beware of unfavorable terms that severely limit your ability to continue with your current practice or restart your practice if things don’t go as planned.

Participation in a company network will cost you a percentage of the patient retainer fee. Not every agreement is created equally – some will have less or more favorable terms. Be sure to give consideration to the amount you are giving up and for the time period in which you will be paying the cost of affiliating.

You don’t have to accept their standard contract out of the gate. Look closely at the provisions of the contract and negotiate the terms, if necessary.

4. Concierge practices can be difficult to sell

While it’s still a young industry, concierge practices are not capturing a premium sales price. In fact, some physicians are having a hard time selling the practice at any price.

Much of the practice value is based upon the current physician and patient relationship. Patients will be paying out-of-pocket to see you.

Your successor would take on the added risk that your current patients may not remain. Patients may choose to opt out and return to a traditional practice where insurance pays.

This risk, unique to a concierge practice, is the reason why it can be difficult to find a buyer when you decide to sell.

5. It’s possible to do concierge on your own

If you think you’re in a good position to offer concierge medicine, you don’t necessarily need to do this as an affiliate of another company. With the right structure, and the desire to do this on your own, you can be successful.

Physicians that become affiliated with a concierge medicine company can be successful, but it will come at a cost much like going into business under a franchise agreement. As it is with any business, you can venture out on your own as an independent, which has risks, but often higher rewards. Being successful requires good business systems, marketing strategies, and dedication to taking on all the responsibilities of meeting the needs of your patients.

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