Applying the direct care membership model to specialty practices
The direct care model is based on patient memberships. Rather than pay the practice for each visit, the patient pays a monthly fee that covers the basics of primary care as well as some laboratory and diagnostic procedures, depending on the practice. The direct care physician’s financial stability depends on those monthly membership fees. In turn, the practice can be more efficient with less overhead and a reduced administrative burden, since there are no insurance reimbursements to file.
Other specialty practices are starting to follow this same model, recognizing its benefits for the members as well as the provider. Some are following a slightly different model, still based on membership fees but more directly related to the concierge model. A concierge provider offers patients more personalized services for a higher monthly membership fee than that found in direct care practices.
A recent article in Physicians Practice refers to the “membership model of the future” as hybrid concierge. In a hybrid model, patients within a traditional practice can opt to join the concierge plan and pay a monthly membership fee rather than per-visit fees. The hybrid concierge model “works very well for specialists like cardiologists, endocrinologists and gastroenterologists who see a healthy cross section of patients on an ongoing basis.”
Robbie Kellman Baxter, a subscription and membership business model consultant, writing in the Harvard Business Review, advises businesses that are investigating the potential of the membership model to consider what model leaders typically do:
- Make sure they have a market/service fit before investing in on-boarding customers.
- Identify the right metrics.
- Invest in building a culture of membership.
- Love their members more than their products.
Baxter further suggests that the membership model will not be successful if the goal is to simply produce a recurring revenue stream. Most primary care and specialty providers are focused on the benefits of such a model for their practice as well as for their patients, including more personalized healthcare, cost savings, and higher quality outcomes.