When it comes to the growing prevalence of concierge and retainer-based medical practices, we mostly hear success stories. But the recent bankruptcy of a 10-year-old concierge practice in Florida serves as a reminder that the model is not immune to financial risk.
According to the Marco News, Naples Health Care Associates, which became the city's first concierge practice in 2002, filed Chapter 11 bankruptcy proceedings last month, showing assets of $32,222 and liabilities of $1,125,500.
The practice's troubles, however, stem not from a solo doctor shouldering too much risk, but from tensions and trust issues that can unravel any medical group. In this case, one of the doctors, Richard Kravis, seemed to be unhappy with the organization and influenced many of the practice's 500 patients not to renew their contracts and instead follow him to a new practice he planned to open on his own.
According to the company, it was the loss of these patients to a disloyal physician that contributed to the bankruptcy. The practice therefore is seeking a court injunction to stop Kravis from breaching a non-compete agreement included in his employment contract before he was terminated. The bankruptcy filing also notes that the practice is working to renegotiate leases and attract new capital to help save the business, the newspaper reported.
Despite the concierge model's potential to free doctors from the strains of relying on third-party reimbursement, being dependent on revenue from a small self-pay panel can make it more vulnerable to losing large percentages of income.
As FiercePracticeManagement reported previously, this scenario may not be as uncommon as it seems. As consultant Kathryn Moghadas, principal of Associated Healthcare Advisors in Winter Springs, Fla., had told Medscape about the retainer model, "Most of what I see is doctors failing at it."
To learn more:
- read the article from the Marco News