A Concierge Healthcare Service

Concierge Care Background The concierge medical service has many benefits over the traditional model of healthcare that most people are accustomed to. The concierge service in healthcare can be considered a luxury service in which doctors are paid a fee beyond that of their standard insurance premium. Furthermore, preventative care most likely has the most potential to improve the lives of U.S.

citizens, however, despite the benefits associated with preventative care, it is difficult to implement preventative care because this type of program could be difficult to profit from, and can even decrease profits from future treatments. Yet, there are some innovative models that can be used to bridge the gaps in the current health care environment. Dr. Green and Dr. Jones could utilize the concierge model to service the portion of their clientele that could afford to pay the premiums.

Currently, the patient census consists of about forty percent of Medicare patients that would likely not be interested in a program and thus the practice should differentiate their services to offer different levels of services to patients. It is recommended that the doctors develop the concierge model in their local community; especially if they can get a guarantee from the CEO of the large company that has recently expressed interest.

The fifty executives that would join the concierge program in this contract would represent one hundred-fifty thousand dollars annually and could cover a bulk of the related expenses associated with further developing this service.

Concierge Services and their Value Proposition Virtually all healthcare organizations are required to a greater or lesser extent to deliver broad access to health services that continuously improve quality of care provided while simultaneously control costs and increasing the level of competition in the industry is often cited as a means to which this end can be achieved (Dash & Meredith, 2010). However, in order to truly understand the value of concierge healthcare services in the U.S.

healthcare system, it is necessary to contrast these services with the services included in the more traditional and standardized healthcare delivery system that accounts for the vast majority of the services available in the U.S. Therefore, in such an environment, despite spending close to three trillion dollars a year on healthcare as a country, significantly more than any other country in total or per capita, the U.S. is still not competitive with healthcare systems found in other of the industrialized countries in terms quality and price (Lavizzo-Mourey, 2015).

For example, one current trend that has emerged in the effort to combat rising costs, is for both public and private insurance companies to compensate medical organizations in a way in which there is a cap on the prices they can charge for certain services. The maximum allocated costs for services is known as the reference price.

Although reference pricing has enormous potential to curb rising healthcare costs, there are also many limitations to this strategy as well as a limited range of services that it is appropriate for -- such as non-urgent standardized services (Lechner, Gourevitch, & Ginsburg, 2013). In regard to such services, the incentive is for the doctor to increase their total service volume to increase their revenues, as opposed to improving the quality of service.

Under reference pricing, a doctor who provides quality services could theoretically make less than a doctor who simply sees more patients. This has the effect to reduce the quality in the top performing clinics and put more emphasis on the quantity of the patients treated.

Michael Porter, the inventor of the Five Forces strategy model, stresses that the future of the healthcare industry will be captured by those who create value and develop principles of value-based competition model specifically for this industry and proposes several metrics for potential ways in which the total value of care would be more consistent with financial gains (Meyers, 2014).

The concierge model is an innovative model that can be used in conjunction with the standard healthcare system, including reference pricing, and gives consumers the opportunity to pay out of pocket for services that create value in excess of the reference price. Furthermore, the practice could offer a tailored program to their client base at different price points that covered not only the Medicare programs and the limitations that must be followed with these clients, but also offer a different service offering to the more affluent members of the community.

These patients would have access to more valuable healthcare services, from a holistic perspective, that would include preventative treatments and represent another source of revenue for the doctors. Recommendations Both Dr. Jones and Dr. Green could leverage the value inherent in the concierge to further diversify their service offering and increase their total revenues. This would allow Dr. Green the ability to develop a model in which he could explore alternatives to the "assembly line" style of medicine while Dr.

Jones could generate additional income that could help him to quickly pay down his student loans. The doctors could use the newly vacated office next door to build a new clinic that caters to the clients who will use the new concierge services offered and this would be a convenient way to separate the services in terms of physical space. The target market for such services will likely be individuals and families with higher.