Converting to concierge

Company helps doctors change practice

Photo provided by Birmingham Medical News -- Dr. Michael Murray examines Jim Runyan at Murray's offices in Birmingham, Ala. Denham Springs-based Cypress Concierge Medicine used Murray's practice as its concierge practice model.
Photo provided by Birmingham Medical News -- Dr. Michael Murray examines Jim Runyan at Murray's offices in Birmingham, Ala. Denham Springs-based Cypress Concierge Medicine used Murray's practice as its concierge practice model.

A dysfunctional health system. Declining payments for primary care. Increasing regulation from the federal government and private insurers. The endless grind of trying to squeeze quality patient care into an eight-minute visit.

Add it all up and it equals an abundance of opportunities for Denham Springs-based Cypress Concierge Medicine, which helps doctors make the move to concierge practices.

When Chief Executive Officer Richard Doughty launched the company in 2012, he expected to start small with a goal of doubling the business each year for the first few years. In 2013, Doughty hoped to sign contracts with six physicians. But Cypress has already passed that mark, and only a few openings remain in the company’s 2014 schedule.

“We budgeted 12 conversions for next year, and we are already beyond that,” Doughty said.

Doughty said he doesn’t know how big the company can get.

In concierge medicine, patients pay an annual fee ranging from $200 a year to $15,000 or more. Physicians typically limit their patient load to 400 to 600 people. Patients get better service, such as same-day appointments, 24/7 access to their doctors and much longer appointments, which allow physicians to do more preventive care and keep patients healthier.

However, critics say concierge medicine leaves out the people who can’t afford the annual fees. Some worry that the move to concierge practices will worsen the existing shortage of primary care doctors, who will be needed more than ever going forward. Millions of Americans will qualify for insurance under the Affordable Care Act in 2014.

The number of physicians in concierge practices is unclear. MDVIP, the country’s largest concierge medical group, has contracts with around 640 practices and estimates as many as 2,500 U.S. physicians are in concierge practices. The American Academy of Private Physicians, a concierge medicine advocacy group, estimates the number at 5,500.

Whatever the actual amount, health industry members agree it is growing.

A report by Merritt Hawkins, a physician staffing firm, found that nearly 10 percent of practice owners planned to convert to concierge practices over the next three years. There are around 200,000 primary care physicians in the United States.

And firms like Cypress Concierge Medicine are springing up to meet the demand in assisting the physicians’ conversions.

Doughty said the company offers two key advantages over competitors: a lower-cost fee structure and the ability to tailor a practice model to the physician and his or her patients.

In a typical concierge practice, the management firm gets one-third of the membership fees patients pay, Doughty said. Most contracts are for five years, and the fee structure remains the same over the life of the contract.

If a practice has 600 members and the members pay $1,500 a year, the management firm’s share is $300,000 a year. Over a five-year contract, that adds up to $1.5 million.

But most of the heavy lifting is done during the first 18 months of moving the practice to the concierge model, Doughty said. After that, if the management firm has done a good job, there’s not nearly as much work required.

Cypress drops its fees each year, in proportion to the amount of effort and energy required to maintain the practice, Doughty said. The difference for doctors generally amounts to several hundred thousand dollars over the course of a contract.

Cypress offers three practice models, Doughty said.

The originator of the Cypress model is Dr. R. Michael Murray, a Birmingham, Ala., internal medicine practitioner. Murray said he had been in practice more than 30 years and loved what he was doing. But the strain of seeing 30 patients a day was showing, so much so that patients began asking about Murray’s health.

Murray said he looked at concierge medicine but needed something a little different. He ended up with 400-plus patients in a blended model. Murray also added a nutritionist to his staff because about 60 percent of the ailments he treated resulted from what patients were eating.

Murray said he made the move around 2½ years ago but his head is “still in the clouds.”

“I look forward to going to work on Monday morning as opposed to being tired on Sunday night and dreading the week, which is what I did,” he said. “I may be busy through the day, but it’s never rushed anymore.”

Murray now sees eight to 10 patients a day instead of 30, and he’s no longer planning to leave medicine.

Not long after Murray made the switch, Doughty, who had worked with Murray for years, told Murray he wanted to get involved.

Doughty took Murray’s model, benchmarked it and Cypress Concierge Medicine was born. Murray came aboard as the firm’s medical officer.

Doughty started Cypress after selling his piece of Champion Management Group, which he co-founded in 2004. Champion owned and operated outpatient imaging centers throughout the Southeast, a home health company and outpatient rehab facilities. The company also provided health care billing services. Champion’s revenue had passed $40 million by the time Doughty left.

Doughty began talking to Murray about concierge medicine in 2011.

The opportunity to work more closely with Murray and other physicians and to make more of a difference was exciting, Doughty said. Although some fear concierge medicine will exacerbate the shortage of doctors, Doughty sees it extending physicians’ careers.

Concierge medicine allows doctors to continue practicing years beyond what they might have under their old practice model, he said.

“With concierge medicine, the impact for patients and physicians is phenomenal,” Doughty said.

Doughty attributes all of his success, past and future, to his faith. Cypress’ growth is really up to God, he said.

“I will tell you this … God is doing some amazing things,” Doughty said. “I just don’t want to limit Him.”

For now, though, Cypress is limiting its growth, Doughty said.

One of the reasons behind the company’s success is that it offers doctors the personal touch, Doughty said. That approach gives doctors confidence in the company, Doughty said.

Cypress doesn’t want to lose its person-to-person quality or make physicians feel like each one isn’t important.