Many people have heard that concierge medicine is the newest trend in health care, and are interested in how it works and whether it can be cost-effective to use the services of a concierge provider. For those of you who own an HSA, you may find that concierge medicine paired with an HSA is the perfect combination.
What Is Concierge Medicine?
Concierge medicine (also called direct care or boutique medicine) is a type of medical care where, in exchange for an annual fee, the providing physician offers more personalized services.
The annual fee typically includes preventive care like wellness exams and annual blood work, as well as access to nearly every service that can be performed in the office. This could include anything from getting stitches to having an EKG performed. For those services not available in the office, many physicians contract with different lab or imaging services to provide discounted prices on those types of services as well.
Concierge medicine providers typically cut out the insurance companies entirely and operate on a cash-only basis (cash-only meaning any type of payment, including debit or credit cards, that does not have to be processed through an insurance company or collected with monthly billing).
How Can Physicians Afford to Practice Concierge Medicine?
In addition to their annual fees, physicians who participate in the concierge model of medicine have actually found that in many cases their profit is equal to or better than when there are insurance companies involved.
One of the biggest factors suggesting this is true is that without the need to process insurance claims and wait for payment, practitioners can reduce their overhead by operating with fewer staff members. This alone can generate more profit, as well as provide better financial compensation for the employees they do have.
Also, in many cases insurance companies will only pay a set amount for certain procedures based on what the going rate is. This is especially true in the cases of Medicare or Medicaid patients, as the government typically only pays a small portion of the actual cost. When practitioners offer services at a discounted rate, they are still paid more than the standard allowable rate determined by many insurance companies.
How Does the Annual Fee Work?
With concierge medicine, the physician decides on an annual fee that will provide excellent quality of care and still allow him to make a good living. The fee amount usually depends on what additional perks the doctor provides.
For example, a doctor who offers longer office visits and more after-hours access (via email or phone) might charge an annual fee of $200 per person. This fee will typically include wellness exams and routine blood work. A concierge physician who offers house calls will likely charge a higher annual fee, although it will also include preventive medical care.
While some doctors require the fee to be paid on an annual basis, others offer quarterly or even monthly fees. There are no set rules for concierge medical providers to follow, so you may have to shop around to find the one who provides a plan that fits your budget and needs.
Why Concierge Medicine Works So Well With an HSA
When used in conjunction with an HSA and a high-deductible health plan (HDHP), concierge medicine can be a very cost-effective way of receiving excellent health care. You can use your HSA funds to pay for the services provided by your doctor while still receiving the cash payment discounts offered.
At the same time, with your HDHP you have coverage in place if you suffer an unexpected illness or injury that exceeds your deductible amount. Often referred to as catastrophic coverage, once you meet your deductible your plan will kick in to pay for the additional expenses of a major illness or accident.
Paying Annual Concierge Fees With HSA Funds
In some cases, you can use your HSA funds to pay a portion of the annual fee required by your provider. For example, if the fee includes an annual physical and blood work in addition to other perks like house calls and after-hours access, you can use your HSA to pay for the medical services themselves.
Let’s say the annual fee charged by your physician is $500 and includes an annual physical, an annual blood chemistry panel, and an annual EKG. Your provider charges $100 for the physical, $100 for the lab tests, and $50 for the EKG. The rest of the fee is used for whatever additional non-medical services your doctor provides.
In this case (and please keep in mind that these amounts are used as an illustration only; each doctor charges his own fee and calculates it differently, so your amounts will vary), you can use your HSA funds to pay $250 of the annual fee, and the other $250 will have to be paid out-of-pocket.
If you are planning on using your HSA to pay a portion of your fees, make sure your provider gives you an itemized bill that clearly states the medical services portion of the fee. This way the expenses are verifiable and can be used to prove that the funds were used for qualified expenses.
HSA Plans and Concierge Medicine: A Great Choice for Quality Health Care
I frequently talk about the benefits of an HSA plan combined with a high-deductible health plan. Using the services of a concierge medical provider along with your HSA plan is an excellent way to make sure you receive the personalized care you deserve.
Since there are significant tax benefits as well as lower premiums on an HSA-qualified plan, you may find that you pay less for the services of a concierge participant than you would for a traditional doctor. Although this is not a guarantee, I think it is definitely an option worth exploring.
As more doctors become frustrated with health insurance companies and the way they manage the care of their patients, there will likely be even more concierge doctors to choose from. This could make the cost to you, the health consumer, even more affordable.
Wiley Long is the president of ColoHealth, and has been in the health insurance industry since 1987. He received his master’s degree in nutrition and exercise science at Colorado State University, and is passionate about individual healthcare freedom. Read more about Wiley on his Bio page.