Doctors add retainer fees, test loyalty of patients
When he opened the letter from his doctor, Stuart Roos was shocked.
Unless Roos paid $25 a month, the letter said, his Polyclinic doctor, Marc Cordova, wouldn't continue providing his care.
It didn't take Roos and his wife, Sandra, long to do the math: $25 a month would be $300 each, or $480 at the "couple" rate, every year — on top of the copays, deductibles and other health-insurance expenses they already pay.
"I guess we're going to have to find another doctor," said Roos, of Mukilteo, a semi-retired meat-department manager for a grocery chain. "He's a wonderful doctor, but when you're on a fixed income ... nobody's worth that much."
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Many other patients at Seattle's Polyclinic who got such letters decided to pay. They like their doctors and, like many health-care experts, say the trend toward retainers is inevitable. Some say they're grateful fees aren't higher.
Victor Piha, 80, another of Cordova's patients, says he's happy to pay $25 a month to stay with a doctor who has the time to closely manage his diabetes.
"I don't think it's an outrageous amount to ask for. I figure with the cost of everything going up, I don't think it's out of line," said Piha, who has already paid the first three months' fees, and is waiting for his Social Security check to arrive before he pays the next three.
"Every time I go in there, I'm taken in right away," said Piha, who has been with his doctor for 10 years. "I'm getting good medical care. He's conscientious, and I'm very comfortable being with Dr. Cordova."
While most retainer-fee programs aim for high-income patients, administrators at The Polyclinic, an 82-doctor multispecialty practice, say their program was deliberately priced at a level that could become a model for the majority of practices.
Cordova is among four primary-care practitioners at The Polyclinic who have sent out similar letters. For a "subscription fee" of $300 a year, patients will get e-mail and Internet health-information access, a newsletter and health seminars.
Jon Younger, an internist, was the first Polyclinic doctor to ask for retainer fees. He started asking patients to pay $20 a month a year and a half ago.
He expected to lose some patients, and he did. But out of 847 patients he asked, 600 stayed with his practice.
With the new program, the doctors say, patients will get continued service at the level they've come to expect: 24-hour-a-day phone access, same-day appointments when needed and personalized care for chronic illness.
Such fees, say Cordova, the other doctors and Polyclinic administrators, will allow them to avoid having to book drive-through patient visits just to keep afloat financially as reimbursements drop, malpractice insurance premiums go up and an increasing number of patients need care for complex diseases.
"This is a way of continuing a relationship in which we're providing quality services," Cordova said. "From a financial standpoint, we don't want to have to crank out more patients a day to cover the decreased reimbursements."
The Polyclinic program, called "Partnership in Health," has been slowly rolling out over the past year and a half. It is open to the clinic's 32 primary-care doctors — and more are expected to enroll — but not to its specialists.
The program was started, said Associate Administrator Howard Springer, because the clinic needed to find a new model to survive financially without compromising care.
Health insurance, which typically pays for the care of sick people, wasn't paying for the monitoring and information systems that can keep chronically ill patients healthy. And declining state and federal reimbursements had already forced the clinic to make changes: No primary-care doctors at Polyclinic take new Medicaid patients, the state-federal program for low-income residents, and few take new patients on Medicare, the federal program for people 65 and older and for certain disabled people.
The four doctors who sent out letters said they did not intend "financial hardship" to be a barrier to continued care and would make "special arrangements" for those who couldn't pay the fee. They waived fees for patients on Medicaid. After being contacted by Roos, Cordova told him he would waive the family's fees this year.
But some patients say the issue isn't the money but the principle.
"I was disgusted," said Michael Go, a patient of Younger, a Polyclinic internist, for 10 years — until Younger asked for a $20 a month retainer. "It was like he was firing me!"
Go, 40, a manager with a hardware-supply firm, says he already pays a yearly $200 deductible and $15 copays for visits. Since he typically only sees Younger for an annual physical, he figured he would be paying an extra $240 for that visit.
Go found another doctor. But he wondered whether older patients felt threatened, since many doctors won't take new patients insured by Medicare.
"I bet the majority of his (Medicare) patients went along with it — 'Pay this or I can't be your doctor,' " Go said. "The way I got it, they're not getting enough from insurance companies, so they're trying to go around the insurance companies."
Another of Younger's patients, though, said he chose the doctor knowing he was requiring fees.
"I had no problem with it, because I think that's kind of where health care is going," said Bill Moll, 59, who has diabetes. "I think the benefits far outweigh the small costs involved. In fact, I guess I was shocked at how low (the fee) was. I had heard of other plans around where I could pay a lot more than that."
Now that he's been with Younger for the past year and a half, he added, "I certainly feel it's money well spent."
Younger says he's heard all the objections — some of them from his own colleagues, worried that "it was going to be an elitist kind of program." A super-exclusive program would go "against the grain" of The Polyclinic's values, said Younger, and was one reason for the relatively low fees.
Dr. Robert Crittenden, chief of family medicine at Harborview Medical Center and past president of the Washington Academy of Family Physicians, says medical-retainer fees are definitely a trend.
The first locally was MD2, a practice begun in 1996 by Dr. Howard Maron, former team doctor for the Seattle Sonics and medical director for the Portland Trail Blazers, and partner Dr. I. Scott Hall. For about $1,000 a month, they promised exclusive care and medical-advisory services to a very small number of elite "clients."
The next year, Drs. Mitchell Karton and Garrison Bliss opened Seattle Medical Associates, providing individualized service for fees from $300 to $1,020 annually, depending on age. And in early 2000, Virginia Mason Medical Center opened the Lewis & John Dare Center, offering "old-time medicine" for $3,000 a year.
Some practices cover in-office medical treatment for the fees and don't bill insurance; others bill insurance for treatment, saying the fees are for "extra" services.
In March, a California-based insurer, PacifiCare, began offering a local plan that includes the Dare Center benefits for an additional $212 a month or $425 for families — in addition to insurance.
PacifiCare said market research showed 30 percent of patients would pay extra for convenience, access and personal care.
Around the U.S., practices requiring retainers have come to the attention of the federal Centers for Medicare & Medicaid Services (CMS), as well as some federal lawmakers.
Medicare rules bar doctors from charging extra fees for covered services. And although practices that charge fees and continue to bill Medicare say the fees are for "extra" non-covered services, some lawmakers have expressed skepticism.
Last year, Rep. Henry Waxman, D-Calif., asked the federal government to stop doctors from requiring fees of Medicare beneficiaries.
Because Medicare patients who don't pay the fee can't stay with their doctors, what's really happening is "the patient is paying for the opportunity to receive covered benefits," Waxman wrote.
An internal memo issued last year by CMS's director of Medicare management on "physician-patient retainer agreements" says such agreements could be legal, depending on their structure.
Legal or not, some health-care ethicists don't like the practice.
"It's exasperating when you see physicians devising new ways to protect their income" rather than concentrating on reducing medical errors, finding ways to cover the uninsured or constructing systems to hold down costs, said Mary Ann Baily, associate for ethics and health policy at The Hastings Center, a New York think tank.
Harborview's Crittenden has mixed feelings.
On one hand, what the Polyclinic doctors are offering is simply "good primary care," which makes a difference in patients' health.
Because the health-care financing system is in such turmoil, too many patients don't get such care, he says. But such fee-based solutions solve the problem only for those who can afford it.
"I've worked all my life trying to decrease the differences — to try to get everybody into the same health-care system — and we're racing as fast as we can in the other direction," Crittenden said.
Younger says he, too, wishes the medical system weren't broken.
"The truth of the matter is that Medicare does not pay even the cost of providing care at this point, and the overwhelming part of that burden is landing on the people providing that care."
He plans to keep his practice open to new patients until it reaches about 1,000, and to raise his fee to $25 a month next year.
If each patient paid a $25 fee, that would add $300,000 yearly to Younger's practice, with fees to be split 50-50 with the clinic, he said.
With the $150,000 annual income typical of internists in this region, the new fees, even assuming they would be waived for some patients for financial hardship, would push Younger's income from his practice to more than $250,000 a year, he acknowledges.
"I think that is fair payment for what I do, and I certainly would not apologize for that," says Younger.
Ultimately, he predicts, many doctors will join the trend, and patients — at least those who can pay — will accept such fees as part of the cost of health care.
Carol M. Ostrom: 206-464-2249 or costrom@seattletimes.com