It is no secret that medical costs in the United States have skyrocketed over the past few decades, and today we spend almost $2 out of every $5 on healthcare (17 percent of our Gross Domestic Product, or GDP). At $2.8 trillion every year, that is enough money to rank as the sixth largest economy in the world in terms of GDP, ahead of:

  • France ($2.6 trillion)
  • United Kingdom ($2.4 trillion)
  • Brazil ($2.2 trillion)
  • Russia ($2 trillion)

While it is true that healthcare costs, like many luxury items, naturally increase as countries become more developed and the demand for advanced care goes up, the U.S. spends significantly more on healthcare for outcomes that are about average, when compared to other developed G20 countries in measures such as life expectancy and infant mortality.

Managing Disease to Lower Costs

People who suffer from chronic disease today have more options than ever to prolong life through medical care, which is why a small portion of people in the U.S. account for a significant amount of healthcare spending annually. Managing current chronic diseases and trying to prevent people from developing disease in the future is an effective method for reducing overall healthcare costs.

There are some individuals who face high healthcare costs for a one-time catastrophic event, such as a severe car accident or the birth of a premature baby. In these cases there is not much prevention that will help avoid the situation. However, there are many other individuals who currently suffer from some type of chronic illness but have not yet experienced the worst of the disease, for whom early intervention could save significant costs by avoiding the need for future treatment.

Concierge doctors have a care model that allows them to spend more time with each patient, identifying areas where they can make changes that will improve the health and wellness of individuals, reducing the need for future treatment, and potentially reducing the chance for future complications with chronic illnesses, which can keep costs down for all patients.

Eliminating Wasteful Administrative Costs

Another significant cost in many doctor’s offices is the administrative costs—interacting with insurance company, filing claims, and obtaining reimbursement for procedures performed. In a typical physician’s office that sees anywhere between 30 to 50 patients a day, this paperwork often requires a large non-physician staff, which increases costs for the patients.

Concierge physicians are able to reduce administrative costs in a few different ways:

  • Fewer patients overall means there is less paperwork, thus reducing overhead costs for the patients that remain with the practice.
  • Many private physicians include some basic costs and procedures in their annual, quarterly, or monthly retainer fees, so there is no need to bill insurance for these procedures, further reducing administrative costs.
  • Some concierge practices choose to forego insurance altogether, operating cash-only practices, which can keep costs down (although many recommend that patients at least retain a high deductible plan for catastrophic events or illnesses).

Increasing Patient Compliance

  • Most people know what they need to do to stay healthy—even chronically ill patients know what to do to manage their condition—the problem is that not all patients follow through with their treatment plan as prescribed. Traditional care providers, already overwhelmed by the high volume of patients they see every year, have difficulty adding in-depth disease management to their plate, and patients do not comply with medication regimens or treatment recommendations.
  • Concierge doctors, on the other hand, make it a priority to spend more time with each patient, getting to know their individual needs and prescribing a treatment plan to ensure optimal health. With fewer patients, they can focus more time and energy on each individual, following up to make sure they comply and scheduling regular wellness check-ups to stay on track.
  • While there is an extra cost associated with belonging to a boutique or private practice, there are many ways that it could actually reduce personal healthcare costs, while also bringing down overall healthcare costs. As healthcare costs continue to rise year after year, it may be a good time to consider whether joining a concierge practice could be the right financial move for you.

See also “Concierge Medicine and Insurance: How It Works”