Direct Pay vs Concierge Practice Models: There is A Difference

As navigating Payer reimbursements becomes increasingly more complex and riddled with regulation, physicians are getting creative with developing practice models that are more profitable and easier to manage.

As these new practice models take shape and evolve, it’s easy to confuse their type and purpose. From direct pay, to concierge, to hybrid models – healthcare professionals across the country are just beginning to understand the distinction between these new kinds of practices, pegged to be the “future of healthcare.”

We thought we could help clarify:

Direct Pay Model

This model’s PRIMARY purpose is to avoid participation in private or government based insurance plans. Hence the name, these types of practices are looking for one thing: direct payment from their patients. Another version of direct pay, which often confused with concierge, is a private “plan” or annual fee charged by the practice that may fluctuate depending on the services the patient is looking to consume. If a practice has the right type of patient base, this model can be highly successful and easier to manage than a traditional practice model.

Concierge Model

A concierge practice model can adopt some characteristics of a direct-pay but focuses more on the enhanced access to the physician than the complete avoidance of Payer reimbursements. Many concierge models do charge annual or monthly fees for enhanced services (usually not covered) in addition to what is covered under the patient’s insurance plan.

The similarities in these two models lie in the “annual” fee for services that often revolutionizes the financial make-up of the practice. Although these fees are being charged for different types of services (more primary care related for direct pay and more luxury enhanced services for concierge), the revenue stream generated allows physicians to cut down on the number of patients they are seeing, and improving the quality of care for a smaller group.

Finally, what is often referred to as a Hybrid Model, is more commonly found as physicians practicing traditionally begin exploring these more private types of practices. A Hybrid model for example could be a physician offering up direct pay or concierge services in conjunction with continuing to run a traditional practice. This is being seen more and more as physicians test the waters of theses private practice models to see how they work with their patient base, without taking the giant scary leap away from the traditional practice.