January 31, 2011
Concierge Medical Care With a Smaller Price Tag
By KATIE HAFNER

SAN FRANCISCO — When Jennifer Contreras went to see her new physician, she had hardly arrived in the waiting room before she was called in — by the doctor herself.

That was a pleasant surprise, but it was just the beginning. Ms. Contreras, 40, was prepared for a short visit, but the physician seemed to have all the time in the world. Then came another surprise.

After noting Ms. Contreras’s high blood pressure, the doctor told her to take her blood pressure daily using a home monitor and send her an e-mail with each result.

“We did all the careful fine-tuning over e-mail until we got just the right dosage of blood pressure medication,” said Ms. Contreras, an associate dean at the University of San Francisco. “It wasn’t just ‘Oh, take this medication and I’ll see you later.’ It was ‘Let’s make sure we get this right.’ ”

Ms. Contreras is a patient at One Medical Group, a new model for primary care that aims to set a nationwide example. With 31 physicians in San Francisco and New York, it offers most of the same services provided by personalized “concierge” medical practices, but at a much lower price: $150 to $200 a year.

One Medical Group doctors see at most 16 patients a day; the nationwide average for primary-care physicians is 25. They welcome e-mail communication with patients, for no extra charge. Same-day appointments are routine. And unlike most concierge practices, One Medical accepts a variety of insurance plans, including Medicare.

The group’s founder and guiding spirit is Dr. Tom X. Lee, a physician and entrepreneur best known as a co-founder of Epocrates, the online medical reference program popular among physicians.

Dr. Lee, 42, trained as a general internist at the Harvard-affiliated Brigham and Women’s Hospital in Boston and quickly grew disillusioned. “As I went through my training,” he said, “I saw a growing chasm between the ideals of medicine and what’s actually practiced.”

The time and financial pressures of primary-care medicine are alienating many young physicians just out of medical school. By some estimates, there will be a shortage of 45,000 primary-care physicians in the next 10 years as demand grows, and Dr. J. Fred Ralston Jr., president of the American College of Physicians, said that “those primary-care physicians already in practice are under such stress that they are looking for an exit strategy.”

In 2005, with Epocrates already a success, Dr. Lee set out to reverse that trend. He began One Medical Group as a solo practice in a small office in San Francisco.

Two years later, Dr. Lee, who has a master’s in business administration from Stanford, approached venture capitalists to help him expand; the Silicon Valley firm Benchmark Capital invested several million dollars, its first investment in health care services.

Some experts say it remains to be seen whether Dr. Lee’s experiment is sustainable — in particular, whether he can continue to recruit physicians and deliver the same level of care without relying on new venture capital.

Nor are they sure the One Medical model can be replicated on a broad scale.

“I envision a small number of organizations that will be successful using models like this, and in general I think it’s great,” said Dr. Ashish Jha, an associate professor of health policy at the Harvard School of Public Health. “But whether such models can scale to cover a large swath of the population that is in greater need of health care is unclear.”

Still, the wiry and intense Dr. Lee remains bent on reversing what he calls “bizarre habits that have been ingrained” in the world of primary care.

When he started One Medical Group, he said, “it was very clear that health care organizations were lacking both the service hospitality mind-set of hotels and the operational efficiency you’d see in manufacturing industries.”

Indeed, a One Medical waiting room could be mistaken for a lobby at a boutique hotel or day spa. Patients are greeted at a large, open reception desk, and phones have been relegated to an office in the back.

“The people who greet you don’t seem frazzled,” said Bruce Dunlevie, a general partner at Benchmark Capital, “and there aren’t four people sneezing on you.”

One Medical physicians say their jobs are like what they envisioned when they first went into the field — before they got their first job in a typical family practice, with its long waits and blizzards of paperwork.

Dr. Andrew Diamond, a One Medical physician in San Francisco, says he now sees 16 patients a day, compared with 24 in his previous practice.

“The most important thing you can do with that amount of time is build a rapport and make people feel at ease,” he said. “It’s when people are at ease that they can give you get the critical information you need to make a diagnosis.”

In his old job, he went on, “when I’d finally see the patient, I would get this very frustrated vibe, which completely got in the way of caring for them.”

Dr. Lee’s practice is not the first to offer more personalized primary care. Dr. Richard Baron, a former chairman of the American Board of Internal Medicine, runs Greenhouse Internists in Philadelphia, a practice with seven physicians that offers much of what One Medical offers, but without the fee.

And in Portland, Ore., GreenField Health charges a sliding fee based on age (from $195 to $695) that is far below the typical concierge rate, which ranges from $1,000 to $5,000 a year. GreenField’s physicians split their time evenly between office visits and consultations by e-mail or telephone.

But One Medical is the first to try to carry out such a model on a large scale. It now has several thousand patients and a growth rate of 50 percent a year, fueled largely by word of mouth. Dr. Lee said he planned to open a third office in Manhattan next month and expand to a third large city next year.

Dr. Baron said One Medical had found “a sweet spot for $200 a year, because there has been a failure on the part of the insurance system and the primary-care community to meet this need for patients.”

Dr. Jha, at Harvard, wonders just how large the sweet spot is. “One Medical could potentially scale by getting more and more younger people who are relatively healthy,” he said. “But it gets much harder when you have 85-year-olds with multiple medical problems.”

Dr. Lee remains confident that his approach is broadly applicable. “We’ve designed the model so that on average we’ll do fine, no matter how often people come in,” he said. “Independent of the people we see, our cost structure is lower, and because it’s lower we can care for any demographic.”

To keep overhead low, he has automated wherever he can. Where most primary-care offices have at least four administrative employees per physician, Dr. Lee has cut that ratio in half. Using the One Medical Web site or a new iPhone application, patients can schedule appointments and refill prescriptions, and, in limited cases, originate new ones.

Tests can be unnecessary and expensive, and Dr. Philip Baird, who works at One Medical Group in New York, says he orders fewer than he used to. A woman in her 40s came in recently with a terrible headache, unlike any she had ever had. After examining her, Dr. Baird said, he doubted it was serious, but was prepared to order a CT scan to rule out a tumor.

As the conversation continued, the woman told him her mother-in-law had just been given a diagnosis of brain cancer. “She admitted she was just really scared,” he said. “She saw I was taking the time, and taking her seriously.”

He did not order the scan, and the patient is fine.

Mark Hurst, 38, who runs a consulting firm in Manhattan, joined One Medical as a patient after months of having trouble reaching his longtime physician. At One Medical, someone answers the phone right away — even at lunchtime. And no one is put on hold.

“I cannot go back to the kind of practice I was at before, that looked, felt, sounded and smelled so different,” he said.

Mr. Hurst never told his doctor there that he was leaving, he said: “I wasn’t able to get through to him.”

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