CMT, 2014: Generation X Likely To Be Reason Membership Medicine Will Continue to Grow

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By Michael Tetreault, Editor

APRIL 25, 2014 – Concierge Medicine Today, the industry’s oldest and most respected independent trade publication for the concierge medicine marketplace released findings this week from a recent poll asking their readers ‘Among which generation is Concierge Medicine or Cash-Only doctors most popular?’ The resulting conclusion of the poll tells readers that the two most popular generations utilizing concierge medicine and cash-based, membership medicine healthcare are Baby Boomers followed closely by the population that will financially support the aging Boomers, Generation X. Generation X encompasses a population of 44 to 50 million Americans born between 1965 and 1980.

family directcaredoctorWhen Concierge Medicine Today asked ‘Among which generation is Concierge Medicine or Cash-Only doctors most popular?’ they found the following [1]:

  • 1925-1945 – Silent Generation – 6%
  • 1946-1964 – Baby Boomers – 42%
  • 1965-1979 – Generation X – 28%
  • 1980-2000 – Millennials or Generation Y – 18%
  • 2000/2001-Present – New Silent Generation or Generation Z – 6%

Now that Generation X is all grown up, they’re the latest group of adult children who will soon be caring for their aging parents. On the whole, Generation X is far more ethnically diverse and better educated than the preceding Baby Boomers and makes up a growing percentage of patients in this industry.

Dr. Ellie Campbell, DO and Michael Tetreault on Physician Radio HealthGate, July 2013.

Dr. Ellie Campbell, DO and Michael Tetreault on Physician Radio HealthGate, July 2013.

“What our practice offers is total transparency in fees, total certainty who your physician will be, and expert guidance in treatment targets and wellness from physicians who have the time to devote to true prevention and lifestyle education,” says Ellie Campbell, DO of Campbell Family Medicine in Cumming, GA.

“We have a number of Generation X-ers who have opted into our practice in Boulder,” says Ginnie Meyers of Foundation Health, located in Boulder, CO. “The old model works worse for Generation X than for any other segment of the population. On average Generation X is not in the office as much for consistent check-ins as the preceding generation, but they need more service than the Millennials do.”

“Interestingly, doctors across the country are becoming more transparent about their fees,” says Catherine Sykes, Publisher of the industry trade publication, The Direct Primary Care Journal. “This is all happening at a time when the cost of health care is rising. We have an era coming with more innovation in health care delivery in our country than we’ve had in a decade. The way health care is delivered will radically change and the focus will be on the customer. Employers are on alert as well and are switching to high-deductible health plan policies where employees are now responsible for a higher amount of dollars upfront before the company picks up the cost. As that expands, patients are going to start looking at health care from more of a consumer perspective, become more cost conscious and less reliant on a piece of plastic in their wallets.”

Generation X, however, is currently the group hit the hardest by the slow economy. They have less money than their parents did at the same age. In fact, the average worth of someone from the age 29 to 37  has dropped 21% over the last 30 years. Generation Xers however, are extraordinarily resourceful, independent and self-sufficient. Members of Generation X are largely in their 30’s and early 40’s and more than 60% of Generation Xers attended college.[2]

The Millennial Generation however, is the second most dominant demographic today in this industry.[1] For Concierge Doctors, direct-pay clinics and those cash-based medical physicians who simply want to make their name known to this large demographic, word-of-mouth advertising won’t guarantee they will step up to your service window or walk through your door. It takes a lot of factors to grab their attention and their business.

Dr. Josh Umbehr, AtlasMD or Wichita, KS, DPC Journal and CMT Contributing Physician.

Dr. Josh Umbehr, AtlasMD or Wichita, KS, DPC Journal and CMT Contributing Physician.

“I believe the Baby Boomers Generation will be a key reason that membership medicine practices will continue to grow,” says Dr. Josh Umbehr of AtlasMD, a concierge medicine practice based in Wichita, KS. “They are the sandwich generation. They are caring for aging parents and grown children living at home. They are experiencing the failure of insurance-based medicine on both ends of the spectrum.  They will not tolerate the poor healthcare and service that has become the norm. They will demand a better product and will find it in our style of medical practice.”

The book, The Marketing MD notes that in today’s healthcare culture, the 55-plus audience hasn’t been entirely abandoned but the advertising aimed at this population segment is simply aimed at maintaining brand loyalty and establishing that the products they love are still good, still function and most likely being improved. Conversely, you can watch any primetime television show that’s targeting the 25-54 demographic, and you will learn what those people think is cool, hip, and where our culture is trending. You will not see advertising aimed at the 55-plus demographic population that’s designed to get them to switch brands. The advertising aimed at 25-54 is all about that. And, by the way, most doctors, consultants and advertising agencies know that.[3]

A story in Time magazine shows that Millennials want more ‘me time’ and crave nearly nonstop feedback and advice. This could be a great fit for Concierge Medicine and DPC practices because these medical practices encourage a closer patient-physician relationship with regular communication. However, the ‘Me’ Generation, (i.e. Millennials) are often described as confident, self-expressive, liberal, upbeat and receptive to new ideas and ways of living.

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“The Baby Boomers have had the opportunity to build relationships with their physicians and administrative constraints are becoming unmanageably burdensome on PCPs,” said Meyers. “In addition, with the prevalence of the internet, I think Generation X-ers are more comfortable with membership-based purchases, in general. The business models of Amazon, Costco, REI, credit card companies, wine clubs, online resources, and gyms all encourage membership for service. These factors combined, I think have created an openness and an increased comfort-level for X-ers toward the idea of a membership model of care.”

“There are many residents in my area that are part of Generation X and they seem interested,” said Dr. Shahzad Anwar of Point Health in Roseville, CA. “They have been exposed to the current health system and its fluctuation over time. They’re ready for a new solution. We account for the fact that our Gen X patients are consumers and people as well so they are looking for more than just a Healthcare visit but also want wellness care. By offering Aesthetic and Wellness services along with primary care we feel ready for the surge in interest for our practice.”

Related: The Anti-Aging Side of Concierge Medicine Boosts Patient Retention For The Modern Medical Home

“Baby boomers will feel stuck between what they have been used to over the past few decades of (i.e. Insurance Company) health care and going back the old-fashioned way when there were no third party intrusion, hassles and disappointments, says Adel Eldin, MD, of Brooksville Cardiology in Wesley Chapel, FL. “With the right price for services delivered, personalized healthcare delivery with improved customer service and patient education and compassionate care along with technology to enhance the delivery of healthcare, I believe that a significant proportion of the baby boomers will gravitate towards the Concierge Medicine Model for sure.”

“Interesting differences were seen in how the genders, generations and regions view various brands,” says Catherine Sykes, Publisher of The Direct Primary Care Journal. “The Millennial generation enjoys interacting with brands in social media like One Medical Group which has nearly 100,000 followers on their Corporate Facebook Page. Gen Xers find membership medicine programs through MedLion and Qliance more influential than traditional primary care clinics. Among national American brands, MDVIP is very influential among physicians and the Mayo Clinic ranks particularly high among Men, Boomers and those executive travelers who enjoy medical tourism type services.”

According to Concierge Medicine Today, Generation X represents nearly 30% of the U.S. cash-only and membership medicine patient population. This generation marks the period of birth decline after the baby boom and is significantly smaller than previous and succeeding generations.[1]

The lack of preparation around finances and transfer of family assets is probably the biggest challenge that face the Baby Boomer consumer. As self-reliant Gen Xers, many Gen Xers find themselves asking aging parents about their finances, healthcare alternatives and treatment options. Many Gen Xers are able to “ease” the financial sticker shock of the upscale healthcare communities by explaining to them the benefits, services and affordability of cash-only and membership medicine doctors.

A mass-market variant of Concierge Medicine, distinguished by its low prices, Direct Primary Care (DPC) is also quite popular by many Gen Xers and the Boomer population.[4] Due to much smaller patient panels than traditional primary care and insurance-based medical practices, DPC doctors say they spend more time with patients discussing treatments, procedures, prescription use and other healthcare options. Similar to its older familial medical model, Concierge Medicine, DPC doctors frequently promote the fact that they can provide “unhurried appointments” and same-day access to a physician. Most DPC medical clinics and doctors with price points under $100 per person per month are slowly gaining traction in the highly competitive healthcare marketplace in the U.S. DPC’s strength has not been in the number of physicians signing up to change their business model but in the low monthly fee they charge their patients.[5]

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Presently, eight large practice organizations that use the DPC model have patient rosters estimated to serve over one million people throughout the U.S. and growing [6], [7], [8], [9], [10]. These organizations include:

  • White Glove Health (includes self-insured employers, families and dependents)
  • WeCare Clinics
  • One Medical
  • Paladina Health
  • MDVIP
  • Qliance Medical Management
  • Iora Health
  • MedLion

As the population ages and the impact of healthcare reform continues to be felt, navigating the medical landscape is only getting more complex for employers and patients. There will be an even greater need for healthcare advisory services in the coming years as patient choices grow more complex and access to appropriate clinicians becomes increasingly difficult. PinnacleCare, a health advisory firm started in 2001, connects individuals to top physicians for customized advice on their unique medical issues – avoiding unnecessary care and minimizing the risks in today’s healthcare system.

Patient advocacy and healthcare advocacy firms such as PinnacleCare do not provide medical care but do provide healthcare management services. This might include: researching medical centers; doctors and treatment options; arranging for timely access to top physicians; handling all details related to appointment scheduling; organizing the Members’ medical records and history; providing global resources on a 24/7 basis; and, in general, advocating what’s best for each Member. DPC doctors, Concierge Medicine Physicians and membership-based medical clinics vary in that these are primary-care practices that provide care to a limited number of patients for low fee. At these primary care practices, referrals to specialists, when needed, typically are limited to the doctors’ personal referral network and tend to be confined to a specific geographical location.

As the nation’s healthcare system prepares to cope with an influx of 30 million newly insured Americans as a result of the Affordable Care Act, physician entrepreneurs are leading medicine down a new path that will see more doctors listing their prices and connecting with patients much like the days before managed care and administratively-burdened insurance. DPC physicians are able to run a very low cost practice that is for the most part, cash only. Clinics and physicians, like Qliance, are now being opened across the country, many with extended hours that offer a more patient-centered relationship with a physician.[4]

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Many people are unaware that there was a clause written into the Affordable Care Act (ACA) allowing retainer practices to be included in the proposed insurance exchanges – with the caveat that these practices be paired with a wraparound insurance policy covering services outside of primary care. According to the report by The California HealthCare Foundation[7], it is the only non-insurance offering to be authorized in the insurance exchanges slated to begin this year. There is not a requirement that Direct Primary Care be included.

In September of last year, Qliance Medical Management Inc. of Seattle, WA and Physician Care Direct (PCD) of North Carolina announced the nation’s first health insurance plan for Direct Primary Care, an increasingly popular model of flat-fee medical care. The offering wraps a proven insurance product around an innovative primary care platform — provided by multiple Puget Sound physician groups — to let employers better manage healthcare costs while benefiting patients and providers alike.[6]

Related: Qliance and Physician Care Direct Introduce Nation’s First Health Insurance Plan for Direct Primary Care

One Georgia DPC physician we spoke to recently checked with a health insurance agent about the effect of ACA, insurance, catastrophic care plans and the effect the healthcare law may have on her patients. She learned that if catastrophic care plans are offered, they do not meet ACA Minimum requirements for coverage. Meaning, policy holders with only this coverage would be in violation of the law and subject to fines, as if they had no insurance, unless the healthcare law is somehow changed. For a single policy holder, this could be as little as $95 or   as much as 1% of the amount by which your income exceeds the sum of a single person’s personal exemption and standard deduction in the federal income tax for each family member not insured.

Jeff Gordinier, author of “X Saves the World,” writes that Xers are “said to be the defiant demographic, dedicated to shredding whatever raiment the marketing apparatus tries to drape us in; because we’d prefer not to be categorized at all, thank you very much.” Still, like other generations before them, Gen-Xers share a common past and certain characteristics.

Generation X grew up with corporate downsizing, massive layoffs, governmental scandal, and come from two income and/or divorced families. With their parents often dedicating their lives to work, Generation X children were often left to accomplish tasks alone or with their siblings, therefore, they became an independent, self-reliant group of smart individuals.[2] Gen-Xers are comfortable with diversity and more globally aware of innovation than any other previous generation. They are the first generation to grow up with CD’s, remote controls and computers. Their circle of friends likely include people from other cultures and they are one of the first generations to benefit from easier world travel and unlimited access to world-wide current events.This generation is comfortable using PDAs, cellphones, e-mail, laptops, Blackberrys and other technology employed in the legal workplace.

“I think the Millennial generation will be the driving force, as they are not as quick to accept the antiquated and bureaucratic third-party payor system as being the way to do things,” says Robert Lamberts, MD, who opened a direct-pay medical practice recently in Augusta, GA. “They will look to use technology to connect with their doctors and have care at their convenience rather than to fall in line with the “normal” way things are done.  I think this is both true of the patients of that generation, and even more so with the doctors who are not at all excited about a system that thrives on frustrating complexity and disconnectedness to force patients to come to the office and pay for care.  The generation that has never gone to a record store, instead downloading or streaming music; the generation that has never opened an encyclopedia, instead going to the internet for information; the generation that sees the bad mistakes of their predecessors (global warming, huge government deficits, social injustice) will seek a simpler and fairer way to do it using the technology they grew up with.”

Gerlinda Grimes writes that Gen-Xers are often referred to as the first latchkey kids. As the divorce rate rose in the 1970s, Gen-Xers were left to look after themselves while both parents entered the workforce. As a result, many Gen-Xers developed independence and self-reliance. They prefer to do things their own way and thrive in casual, friendly work environments [2].

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“As long as we live in a world of drive-though windows, ATMs, and garage door openers,” notes Dr. Campbell, “patients are going to value and pay for any service that gets them in and out quickly, on their time schedule, with their desired objective. Primary care doctors need to learn to adapt, as this  model of care delivery seems here to stay. Unless we offer on-site dispensaries, extended hours, and no appointment needed delivery, we will be deferring more urgent issues to these models. Perhaps then we will have more time to devote to preventing disease and reversing the burden of chronic conditions, if only we can convince third party payors that there is value in that.”

[1] Concierge Medicine Today, March-April 2014.

[2] AmericanBar.org; Theilfoldt and Scheef; Law Practice Today;http://apps.americanbar.org/lpm/lpt/articles/mgt08044.html

[3] The Marketing MD Book, © 2013-2014; http://www.amazon.com/The-Marketing-MD-Attract-Patients/dp/1494433109

[4] The Direct Primary Care Journal, © 2013-2014.

[5] The Concierge Medicine Research Collective, © 2009-2014.

[6] Qliance and Physician Care Direct Introduce Nation’s First Health Insurance Plan for Direct Primary Care, September 2013; http://www.digitaljournal.com/pr/1482448#ixzz2zopL3jnj

[7] The California Health Foundation, April 2013; http://www.chcf.org/publications/2013/04/retainer-direct-primary-care

[8] Health Plan Rorschach Test: Direct Primary Care, Dave Chase, July 2013, Forbes.com; http://www.forbes.com/sites/davechase/2013/07/06/health-plan-rorschach-test-direct-primary-care/2/

[9] Healing health care, Michael Jonas, Winter 2014, CommonWealth; http://www.commonwealthmagazine.org/News-and-Features/Features/2014/Winter/002-Healing-health-care.aspx#.U1kYCVcvCWG

[10] Healthcare Costs: Low-Hanging Fruit, Todd Hixon, April 4, 2014; http://www.forbes.com/sites/toddhixon/2014/04/04/healthcare-costs-low-hanging-fruit/

About Concierge Medicine Today

Concierge Medicine Today (CMT), is a news organization and the industry’s oldest national trade publication for the Direct Primary Care and Concierge Medicine marketplace. Their web site, www.ConciergeMedicineToday.com, is the online destination for consumers, businesses, physicians, legislators, researchers and other stakeholders to learn about the history of this industry, various business aspects of the marketplace, trends, breaking news and more that drives the conversation that Concierge Medicine and Direct Primary Care is creating on a national and international level. To locate a Concierge Doctor or learn more, visit: http://www.ConciergeMedicineToday.com or http://www.DirectPrimaryCare.com.

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