UM fuels debate on retainer-based health care

Karen Bouffard
The Detroit News

The University of Michigan has become the focal point in a national controversy over a revolutionary shift in medicine — away from traditional insurance-based health care, to a new model where patients pay directly, and in advance, in exchange for the promise of better quality care.

Michigan Medicine this week introduced Victors Care, a high-end form of retainer-based medicine called “concierge care.” Starting at $225 a month, patients get unlimited primary care appointments, shorter waits, “executive” physicals and long talks with their doctors — no insurance accepted.

Dr. Chad Savage, Medical Assistant Rachel Baumgartner and patient Marilyn Reardon in Savage's Brighton, MI practice on March 29, 2018. (Dale G.Young/Detroit News) 2018.

The public university’s practice will be capped at 600 patients, stoking controversy at a time when primary care doctors are in short supply. More than 300 university faculty and physicians signed a letter protesting the program in March, saying Victors Care creates a two-tiered system of health care where the rich get priority over the rest.

Dr. Daniel Berland, a UM family practice physician and clinical associate professor of medicine, worries what will happen to the patients dropped by Victors Care doctors who reduce their caseloads. He argues that concierge medicine violates Michigan Medicine’s mission as a publicly funded institution, something private practices don’t have to deal with.

“How can it possibly be a solution if doctors (at Michigan Medicine) have 1,500 patients, and these doctors have 300 patients?” Berland said.

“The university is operating like a large corporation looking at the bottom line.”

But there’s a surge in private retainer practices like one started by Dr. Chad Savage of Brighton, who grew tired of the high case loads and red tape associated with insurance-based care.

His patients at YourChoice Direct Care pay a monthly retainer of $39.99 to $69.99, depending on their age, in exchange for unlimited doctor appointments and telemedicine visits, plus deeply discounted prescriptions and medical tests — often generating a savings over the cost of insurance deductibles and co-pays. Known as “direct primary care,” such practices usually have fees under $100 per month.

“Income-wise we see a whole spectrum of people — if anything, we skew towards the economically disadvantaged because we are a value-based model,” Savage said of his patient mix.

“We’re not always cheaper under every scenario,” he added. “But we’re probably going to narrow that gap.”

Doctors with retainer-based practices say that turning down insurance, with its entanglement of bureaucracy, gives them more time to focus on patients. But critics, including other physicians, say the trend reduces health care access for other patients.

At the University of Michigan, Victors Care members are seen at a private off-campus facility with free parking and get annual “executive” physicals that include a litany of medical studies not normally included in insurance-paid annual exams.

Medical assistant Rachel Baumgartner cares for Marilyn Reardon, 60, last month in Brighton. Reardon combines “concierge care” with membership in a health care sharing ministry to cover her needs. She said her total out-of-pocket health care costs totaled $3,000 last year.

UM Medical School Dean Marschall Runge, vice president for medical affairs at Michigan Medicine, has said Victors Care is expected to result in increased financing from donors, which can be used to improve care for patients who are are economically disadvantaged.

“I think it’s a value because I think that primarily it is a way to bring U of M supporters ... into our system in a way that they will learn more about health care, and they will donate to health care for people who are not as fortunate as they are,” Runge told a bioethics round table held in Ann Arborto address the controversy.

“The program itself is not likely to create much of a margin, but the philanthropy will. And we don’t have any other area in which we intend to use those funds.”

But more than 300 physicians and faculty signed a letter of protest about Victors Care.

“There’s no evidence that this benefits people in a zero-sum way, where these people are benefited and nobody else is harmed,” said Dr. Praveen Dayalu, a Michigan Medicine neurologist who signed the letter.

Patients often request referrals for specialty care or diagnostic tests that they don’t need, Dayalu noted. He worries the bar for obtaining a referral will be lower for Victors Care patients. Tests like a magnetic resonance imaging or MRI of the brain often result in false positives, which can lead to further rounds of testing for conditions that don’t exist.

“Any concierge model has built into it an assumption that you are paying more, you’re going to expect more,” Dayalu said. “There’s fear we’re going to be asked to let these people jump the line where there are already patients awaiting treatment for known neurological problems.”

Movement in D.C.

Retainer-based practices have grown since the 1990s to about 12,000 such practices by 2014, the latest data available. It involved about 7 percent of the country’s physicians, according to a survey of 20,000 doctors by Physicians Foundation, with 13 percent of doctors expressing interest in joining the trend.

In Washington, legislation has been introduced that would let Americans use tax-free health savings accounts to pay for a direct-care membership fee, a change that would help accelerate the movement.

Retainer-based medicine is attractive to doctors overwhelmed by high case loads at a time when their numbers are declining. The United States faces a projected shortfall of 40,800 to 104,900 physicians over the next decade, according to the Association of American Medical Colleges.

Michigan had 87.7 primary care physicians per 100,000 residents in 2017, according to the association’s State Physician Workforce Data Book. The mean, or average, practice size for a state’s primary care doctor was 1,212 patients. Since doctors aren’t evenly distributed across the state, many have caseloads much higher than the average.

Luxury plans like Victors Care are offered as a perk for corporate executives or as a way to attract philanthropy to institutions like Stanford University and University of North Carolina at Chapel Hill.

But there is also a surge in health plans aimed at filling a health care void for middle-income to low-income Americans, such as YourChoice Direct Care in Brighton.

Savage was a primary care physician with St. Joseph Mercy Health System, where he said he had a case load of more than 3,000 patients and spent hours wrestling with complex insurance requirements. He has trimmed his clientele to 700 patients since opening his health practice in 2015.

“I’m still working just as hard, but do a better job for those people I treat,” Savage said, saying he “hopefully” breaks even with his former income.

Savage treats a mix of patients from those covered by employer-based health insurance to others with Medicare or Medicaid, high-deductible health plans or no insurance. The retainer covers unlimited office and telemedicine visits, and patients get deep discounts on prescriptions through the practice’s in-house pharmacy.

Savage said he has developed a network of providers who supply laboratory work, MRIs and other diagnostic tests at nearly the cost of doing them.

“We have a lot of working poor people who make too much to get a subsidy (under the federal Affordable Care Act), but they don’t make enough to afford their care,” he said. “We didn’t realize how many of those people there are until we started getting people come in who had literally neglected their health for years.”

Marilyn Reardon, 60, of Howell, had neglected her diabetes for years before joining YourChoice Direct Care in 2015. She was paying about $600 per month for federally subsidized insurance through the Affordable Care Act, but had a $5,000 deductible.

“I was putting all my money into the insurance, and I couldn’t afford the actual health care,” she said during a recent appointment with Savage. “My sugar got so out of control that I became insulin-dependent.

Now, Reardon combines YourChoice with membership in Liberty HealthShare, a health care sharing ministry. She pays $199 per month, and Liberty picks up 70 percent of her health care costs, including the expense of her YourChoice membership.

Even with a hospitalization last year, she said her total out-of-pocket health care costs totaled $3,000. And with regular primary care, she’s no longer insulin dependent.

“And under some scenarios like Marilyn’s, we can make a dramatic difference,” Savage said.

Resisting the system

A 2016 American Medical Association study published in the Annals of Internal Medicine found that for every hour an ambulatory care physician spends seeing patients, that doctor spends two additional hours on paperwork.

Scott Greer, a professor of health management and public policy and global public health at the University of Michigan, said the trend toward retainer-based medicine is fueled by dissatisfaction from both doctors and patients. The problems began well before the federal Affordable Care Act of 2010, he said, emerging with the managed care revolution of the 1990s when employers demanded that insurance companies rein in skyrocketing health care costs.

“Any doctor is likely to be spending more than half their time dealing with electronic health records, whose benefits they might not see,” Greer said.

“A lot of doctors in the U.S. would like to declare independence of the entire system and practice medicine the way they think it should be practiced for their patients.”

Patients also have “a lot to dislike” about American health care, he added.

“You pay a helluva lot of money, and in return you get you get distracted organizations, you get bills you don’t understand, you are increasingly suspicious of a lot of people who should be caring for you,” Greer said. “If you have the money, it’s really attractive to say ‘I want to go back to square one and pay a doctor to make me feel better.’ ”

One of the largest networks of retainer-based practices, MDVIP, includes nearly 1,000 doctors across the country, including 17 in Michigan, with six in Metro Detroit. They offer personalized medicine for an average retainer of about $140 per month, with an average practice size of 300 to 600 patients.

“They include teachers, small business owners, a whole spectrum of people,” MDVIP spokeswoman Nancy Udell said.