There’s a New Tax Break for ‘Concierge Medicine.’ Should You Go for It?

Mark Epstein is paying $3,300 this year to his doctor’s office to be treated more like a VIP than a patient. He says it’s well worth it.

When the retired business consultant, 78, had a major medical procedure this year, his doctor offered “lots of hand-holding” during the process. When his Part D drug plan declined to cover one of his medications, the office staff called the insurance company and got it straightened out, saving him time and frustration.

“They focus like a laser beam on me,” says Epstein, of Napa Valley, Calif.

Epstein belongs to one of the country’s growing number of concierge practices —subscription plans that turn doctors’ offices into membership clubs.

For fees ranging from about $1,000 to $30,000 a year, patients typically receive round-the-clock access to their doctors. Many practices offer more-comprehensive primary care and streamline patients’ access to outside specialists. If it takes months to get an appointment at a local cardiologist, a concierge practice may get patients an appointment within days. They also communicate with specialists to coordinate patients’ care, a big benefit for those managing chronic conditions like multiple sclerosis or acute needs like a broken hip.

Kicking around for decades, concierge medicine now encompasses 9% of primary-care physicians and 1.5% to 3% of physicians overall, according to estimates from the American Academy of Family Physicians. The business looks poised to get a lift from Republicans’ tax and healthcare policies.

Starting next year, patients in some direct primary-care practices will be able to use their health savings accounts to pay membership fees, up to $150 a month for an individual and $300 for a family—even as Republicans’ $900 billion in Medicaid cuts are expected to strain the country’s healthcare system and accelerate the number of doctors opting out of insurance.

Many patients, like Epstein, join concierge practices when their doctor makes the switch. Others actively seek out practices where money buys the kind of timely, personalized, and coordinated care that has largely been wrung out of the U.S. healthcare system.

The experience can feel like a spa visit. At the flagship Sollis Health office on the Upper East Side of Manhattan, there’s complimentary coconut water and Netflix available on TV screens in the exam rooms. You don’t have to go far for a scan: MRI, EKG, CT, and ultrasound machines are tucked away off a light-filled waiting room.

Doctors have good reasons to join these tony practices. In recent decades, lower insurance reimbursements and mounting paperwork requirements have ratcheted up pressures on doctors’ offices. To cope, many independent practitioners have sold their practices to hospitals and other conglomerates. Those who continue with a fee-for-service model have had to squeeze more patients into their workday, limiting the time they can spend with each patient.

In the current system, “it’s hard to keep the lights on and give your patients the care they deserve,” says Dr. Erick Eiting, regional medical director of New York for Sollis Health, which provides concierge urgent and acute emergency care through plans starting at $333 a month.

Insurance coverage varies widely. Membership fees aren’t covered. And direct primary-care practices, which tend to have a fixed menu of services, generally don’t take insurance. Some concierge practices bill insurance for services their membership fees don’t cover. Patients still need insurance to pay for hospital visits and other services.

For patients to use their HSA funds, a “direct primary-care practice” has to meet certain criteria. The business can’t offer general anesthesia, prescription drugs other than vaccines, or laboratory services that aren’t typically delivered in a primary-care setting. If a practice offers any of these excluded services—or if it charges membership fees over $150 a month for an individual and $300 for a family—then their patients won’t be able to use HSA funds to pay the membership fee. (If a practice charges more than the allowed amount, it is disqualified from HSA funds entirely.)

Dr. Carolyn McClanahan, a physician and financial planner in Jacksonville, Fla., says patients generally benefit from doctors who have more time to see them. “That’s what concierge medicine does,” she says. “It restores family medicine to what it used to be.”

Whether it’s worth the cost is up to individual choice and financial resources. Peace of mind, pampering, and convenience have a price—and if your longtime doctor switches to a concierge service, it may well be worth it. Concierge practices tend to score high marks on customer satisfaction, but there isn’t much evidence they contribute directly to improved health outcomes.

Write to Elizabeth O’Brien at elizabeth.obrien@barrons.com