Converting to Membership Medicine with Minimal Risk
When I first heard about Membership Medicine with a direct relationship between doctor and patient, I was both excited by the prospect of a better type of healthcare and worried about the risks of joining such a new movement. I took my time in converting and, over the last two years, my primary care practice evolved into a membership practice in the most risk-averse way possible. I love Concierge/Direct Primary Care--it’s been an improvement for both my patients and the practice.
I’d love to share the greatest takeaways from my conversion, both to help doctors who are considering converting, and to encourage other Direct Care physicians to share their wisdom
Specifically, my experience has shown that you can develop a thriving Direct Care practice with minimal risk if you:
- Take your time while converting
- Develop clear communication strategies with patients
- Find employers to work with
- Design a simple legal structure for your practice
I’m Glad I Took My Time
Two years ago, before I started making the change to Direct Care, my biggest fear was that I’d arrive at the other side without enough patients. Most doctors transition in a three- or four-month sales window, where they’re entirely converted to a membership model at the end. I was afraid of that timeline since I’ve seen a number of practices get near the end of their sales cycle and have to back out. Instead, I chose to transition my practice slowly through a hybrid model, which removed the risk.
For two years, I only reduced the size of my fee-for-service (FFS) practice at the rate my Direct Care practice could support. As the revenue from my Direct Care patients grew, I was able to keep constant revenue with fewer patients.
Notably, the growth of Direct Care patients was almost a perfectly straight line, which suggests strongly that the slow transition allowed me and my staff to capture some patients we would have missed in a four-month sprint.
Converting slowly also led to some unexpected benefits:
- I had time to communicate with patients.
- I had some sales experience before starting this transition, but having the time to improve my communication helped the process even more.
- My staff and I used an inexpensive CRM to track the sales process and found the process easy and effective.
- I had time to give non-membership patients a taste of some of the perks of membership.
- This strategy ultimately helped us transition a sizable portion of FFS patients into the new Direct Care practice. (More on this in the next section.)
- I had more touchpoints with patients before requiring them to convert.
- Approximately 7% of my current patients initially said they weren’t interested in Direct Care and then later expressed interest.
- These were usually patients who came in for lots of visits after I talked to them about Direct Care. They would then bring up the topic again on their own, unprompted.
- I’m glad I went slowly because, if I were on the standard four-month window, I would have lost these patients.
I Focused on Clear Communication with my Patients
Patients are used to their physician being consistent, steady, and predictable, so one advantage of my low-risk approach was the ability to ease patients into the process while I learned how to communicate about it. I’ll admit it was a learning process for the first couple of months, but over time I naturally developed somewhat of a script. After talking about Direct Care for a year, I had the messaging down, knew what resonated with people, and could communicate about it comfortably.
Talking to Patients about Direct Care on a Day-to-Day Basis
So patients could learn about it over time (and I wouldn’t feel overwhelmed!), I allotted a little time during every visit to talk about my Direct Care practice. After finishing with a patient’s medical needs, I had an additional 5 minutes allocated to discuss Direct Care. Since only around a third of my patients were interested in talking about it, those 5 minutes bundled together into a 15-minute conversation that could cover all of a patient’s questions.
Most patients asked the same questions, so I naturally honed a specific script over time. For example, when I first start telling a patient about Direct Care, they invariably ask why I’m changing my practice, so I address that immediately. I tell them:
- Traditional FFS medicine has evolved into a beast, and that isn’t the way that patients deserve to be cared for and not the way I want to practice medicine.
- Therefore, I’m slowly transitioning to a new model of medicine to be able to take better care of my patients.
It’s important to mention these reasons at the outset because many patients’ first instinct is along the lines of, “he’s just changing his practice to make more money,” so you need to make it clear there’s a real philosophy behind the change.
Afterwards, if the patient has expressed any curiosity, I dive into my 30-second elevator pitch, which sounds like this:
- I’ve switched to a membership model practice, where patients pay a monthly fee to belong to the practice but get a lot of benefits that you wouldn’t get with a regular practice. In the membership practice, you can
- Enjoy as long as you need for an appointment
- Always get same-day and next-day appointments
- Reach me 24/7
- Contact me by email, text, or phone—whichever route you prefer
Around this time, they usually ask some questions, most commonly, “How does this work with insurance?” so I tell them the specifics of my practice:
- They can still use their insurance for all the things they usually use insurance for, such as
- Going to the hospital
- Seeing a specialist
- Imaging and labs
Of course, I don’t force every conversation to fit this script. I’ve just noticed this order of topics tends to resonate most with patients and that their questions generally come up in a consistent order. For example, I also compiled explanations of the most common topics into a marketing sheet that answers most patient questions.
Admittedly, some patients have an issue with the idea of paying a subscription in addition to insurance. Some of the patients who didn’t sign up probably fall into this category, but most people understand they’re getting extra services compared to what they would get with just basic insurance.
To keep track of which patients find Direct Care interesting and which subjects within Direct Care resonate with them, I make notes in my CRM after every Direct Care patient conversation. Then, at their next visit we can pick up on the topics they found most compelling.
Giving my FFS Patients a Taste of Direct Care
From time-to-time, I offer my FFS patients some of my membership features. I will spend more time with them during a visit, taking time to get to know them better. Or, I may use my concierge consult service for them to help answer a specialist question and save them a trip to the specialist’s office. When I do this, I mention that this is why I love Direct Primary Care, because it allows me to spend more time with patients and less time on paperwork. It allows me to offer new technology and services like the RubiconMD service that are not available in regular factory-medicine practices.
These strategies--developing a script and giving my FFS patients a taste of Direct Care--led to a 13% rate in converting my FFS patients to Direct Care, which means I now have a full panel.
I Found Employers and Partnered with an Insurance Broker
Some of my membership patients are business owners themselves, so I started working with employers to cover their employees. The company pays a fixed monthly amount based on the number of patients, so I’m a Direct Care doctor for those patients just like I am for any other membership patients in my practice.
In April I’ll begin approaching other companies about offering Direct Care with a wrap-around insurance policy. I started looking into this idea a year and a half ago to see how I could make it work. The biggest challenge was finding someone who could offer the insurance piece.
Most of the traditional insurance brokers I approached either weren’t comfortable with the notion because it was unfamiliar or felt like it wasn’t going to be profitable for them. Ultimately, I found someone who was working with Direct Care practices in Texas/Oklahoma. He is familiar with designing an insurance package to go with Direct Care practices and knows how to make the arrangement work for everyone.
While I found a broker with experience, I don’t think that’s strictly necessary. After all, the first time he had worked with a Direct Care physician, the process was new to him, too. You just need a broker who’s willing to do a little extra research to tap an this new market.
To recruit the employers we already have, my broker and I designed programs that save them money while still providing enough coverage to cap their downside. For example, let’s say an employer spent $500,000 last year on health insurance. We would offer them a policy that costs $400,000 for a combination of Direct Care with an insurance plan to cover worst-case scenarios. My practice gets new patients, the broker gets his commission, and the employers save money. It’s a win-win-win.
I Created the Practice in a Dual-Company Structure
Since we operate two different practices under one roof, we have a clear legal and business distinction between the Direct Care and FFS practices. That said, we have no trouble keeping the businesses separate and distinct.
We have one LLC that covers the non-membership elements and a separate LLC for the membership side. My membership LLC provides Direct Care services to patients and collects membership fees. It also pays for my Rubicon membership, my communication software, my CRM, and my marketing. On the other hand, patients physically coming into the office is covered by their insurance, so everything related to the physical practice fits under the non-membership LLC.
On day one, my non-membership entity was doing 100% of my business. Now, approximately 85% of my revenue comes through the membership practice and 15% from the insurance side. Though all my patients are now membership patients, I’ve elected to keep taking their insurance, more as a service to the patients than anything else. In talking to them during the conversion, I learned that my patients appreciate the knowledge that they’re getting some value out of the insurance they pay so much for every month, and accepting insurance also allows me to keep my membership fees slightly lower than they otherwise would be.
Many organizations--both in healthcare and not--have a dual company structure. Getting ours up-and-running was straightforward, and working within it now is an easy routine.
Our practice currently has one location, but we’re looking to expand once we acquire new patients. Right now we’re shooting to recruit around 500 new patients through employers and sign on a new provider in the 2018 timeframe. Given the improved lifestyle and better care that Direct Care allows us to provide, I’m confident we’ll be able to find a physician excited to join. And, considering most doctors are risk-averse, it also helps that I’ll be providing them with patients already.
There’s no one-size-fits-all approach to converting to Direct Care. We chose the slow and steady approach, and I’m glad we did. It allowed me to see the tangible benefits over time and feel safe while doing it.
If you have any comments, questions, concerns, feel free to reach out. Everyone in my practice is glad we made this change, and we’d love to help others follow in our footsteps.