It’s no big secret that many private healthcare practices are struggling. According to a 2011 survey from CNN Money, half of all doctors in the nation operate a private practice, and many list reduced reimbursements, mounting drug costs, and changes in regulations as key factors hurting their profitability. While most physicians are more interested in helping patients than turning a profit, financial concerns may force them to turn away those in need of care. What’s worse, a practice forced to close its doors can leave a void of available healthcare in the community they once served.
Even for those practicing on a larger scale, financial woes are hurting profitability, and preventing doctors from providing valuable care. Emergency room visits — often the only option for the uninsured or under-insured — have become a huge drain on regional hospitals. In a 2007 report, the Institute of Medicine described crowded emergency rooms as a “growing national crisis,” causing delay in patient care, ambulance diversions to other hospitals, and an inadequate capacity to handle sudden patient influxes from public health crises or other catastrophic events.
Many patients crowding emergency rooms could instead be served proactively and preventatively at a doctor’s office or clinic, but once again, financial barriers limit access. What’s needed is a realistic way to grant access to these patients, while still providing a steady income stream for doctors.
As we’ve examined in previous blog entries, providers in the veterinary space — such as Banfield Pet Hospital, with over 1 million pets on wellness plans — have used a membership model to great success. Pet owners get access to regular visits and preventative care at a price they can afford, leading to healthier pets and happier owners. The dental industry is coming on board as well, with thousands of dentists cutting out third parties and offering plans that allow affordable access to those in need, while keeping the relationship between the doctor and the patient.
In both industries, the strength of the membership/loyalty model — proven consistently in retailers such as Costco and Sam’s Club — creates a stable financial foundation for independent practices. Considering the challenges many doctors and patients are facing in today’s medical space, is it possible a membership model, managed and run by the doctor, could provide a viable solution in the human healthcare field?