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Wealthy Families Skip Waiting Rooms With Concierge Medical Plans

March 16 (Bloomberg) -- Doctors on-call day or night. Medical care while traveling outside the U.S. Emergency-room grade equipment, modeled on gear used in the White House, installed in the client's home.

Well-heeled executives and their families increasingly are paying tens of thousands of dollars a year for high-end medical services that aren't covered by insurance.

"Wealthy people want to have a little exclusivity and want better service than they can get at their normal health-care facility, and they're willing to pay for it," said Rick Flynn, principal and head of the Family Office Group with Rothstein Kass, a Roseland, New Jersey-based accounting and consulting firm.

Such white-glove attention, known as concierge care, doesn't come cheap. It may cost as much as $30,000 a year out- of-pocket for unfettered access to physicians who limit the number of patients they take on. An emergency room in one's home designed to handle a family's ailments can cost as much as $1 million.

About 55 percent of single-family offices, which generally manage the finances of one wealthy family, used a concierge health-care provider in 2011, compared with about 36 percent in 2009, according to a study released in December by Rothstein Kass. The top reasons were managing severe medical conditions and gaining access to quality physicians and medical institutions, the study found.

'Conveyor-Belt Medicine'

"People are really looking for an alternative to what's become conveyor-belt medicine today," said Mark Murrison, president of marketing and innovation for Boca Raton, Florida- based MDVIP, a network of concierge doctors and a subsidiary of Cincinnati-based Procter & Gamble Co., the world's largest consumer-products company.

PinnacleCare Private Health Advisory organizes medical records, has emergency physicians available around-the-clock and connects patients to a network of top doctors throughout the world, for fees ranging from $2,500 to $30,000 a year, said Miles Varn, an emergency physician and chief medical officer for the Baltimore-based firm.

WorldClinic specializes in care for families and executives while they're traveling, including performing emergency triage by phone and prearranging for any necessary care at destinations, said Daniel Carlin, a physician and founder of the New London, New Hampshire-based firm.

Doctors on Retainer

Patients of MDVIP pay from $1,500 to $1,800 a year in membership fees for access to a primary-care doctor whose practice is generally limited to about 600 patients. The fees, which also cover certain preventative-care services, generally aren't covered by traditional health insurance, while charges for care, such as costs for sick visits and tests, often are, Murrison said. The firm started in 2001, and about 92 percent of its 180,000 members renew each year.

Some family offices also work with doctors who cater to the ultra-affluent by charging retainers and who aren't part of any broader network, said Mindy Rosenthal, executive director of the Institute for Private Investors, a New York-based association of wealthy families. Traditional health insurance for a family in an employer-sponsored plan was about $15,073 in 2011, with employers paying $10,944 and workers paying $4,129 on average, according to a survey by the Menlo Park, California-based Henry J. Kaiser Family Foundation and the Chicago-based Health Research & Educational Trust.

X-Rays on Planes

Guardian 24/7 installs its so-called ReadyRooms in homes, yachts and planes, and can equip them with X-ray machines, CT scanners, ultrasounds and blood-analysis technology, said Sean O'Mara, who cofounded the firm in 2009 with two former White House physicians, Robert Darling and William Lang. The equipment alone may cost as much as $1 million, he said.

"In a hospital gown, we are all created equal," reads the firm's website marketing material.
The company staffs a 24-hour operations center in Leesburg, Virginia, about 40 miles from downtown Washington, from which doctors may treat patients through secure high-resolution teleconferencing. The firm has about 55 individuals as clients of its support services, for which it charges from $6,000 to $12,000 a month, and has installed about 15 ReadyRooms, he said.

"We borrowed the idea of the technology, high-end telemedicine connectivity, out of the White House situation room," O'Mara said.

Physician Shortage

Part of the rush toward high-end, private services may stem from a growing gap in the availability of health-care providers. There was a shortage of about 13,700 physicians in the U.S. in 2010, which may rise to about 91,500 in 2020 and 130,600 by 2025, according to estimates by the Washington-based Association of American Medical Colleges.
An increase in doctors moving to a concierge or retainer business model could reduce access further, said Julia Paradise, an associate director in Washington at the Kaiser Family Foundation's Commission on Medicaid and the Uninsured.
"It's just math," Paradise said. "If the physicians who are practicing take fewer patients, it reduces access in the wider population and it generally limits access to people with very substantial resources."

The health-care reform law passed in 2010 could exacerbate a system that's already "overtaxed," said MDVIP's Murrison. The law may increase the number of Americans with health insurance by about 32 million, according to estimates by the Congressional Budget Office and the Joint Committee on Taxation.

Digital Records

Private Health Management, a high-end provider based in Los Angeles, assists with identifying doctors in the U.S. for primary and specialty care as well as abroad for travel-related emergencies. The firm also compiles reports to answer patients' questions about treatment and diagnosis options, said Leslie Michelson, chairman and chief executive officer.
The company digitizes patients' medical records, which they receive on portable USB memory drives that fit in their wallets.

"There's an enormous difference between the very best the health-care system has to offer and the very worst," Michelson said. "We help our patients get the very best."

The four-year-old company has between 1,000 and 5,000 patients, and is gaining clients among executives of fund- management and private-equity firms, Michelson said. He declined to specify the number of clients or provide a range for costs.

Nicholas Schorsch, 51, chief executive officer of American Realty Capital, began working with Private Health after his father-in-law was diagnosed with prostate cancer.

A 'Wonderful Gift'

"He was going down very, very rapidly, and they were able to reverse it to a point of stabilizing him" for several years said Schorsch, whose New York-based firm manages about $7 billion primarily in real estate investment trusts. "It was a wonderful gift to the family."

Primary-care doctors with MD2 International LLC, limit their practices to 50 families, with each office made up of two doctors. Fees vary by city, with a typical family paying from $25,000 to $30,000 a year, none of which is generally covered by insurance, said Peter Hoedemaker, chief executive officer of the Bellevue, Washington-based company, which is pronounced MD- squared.

"There are different levels of hotels, and different levels of cars," Hoedemaker said.

The firm is currently serving about 500 families in five U.S. cities, with plans to open offices in Dallas and New York this year, he said.

Trading Cellphone Numbers

John Dillon, 50, started using MDVIP when his doctor, Alan Sheff, decided to join the network. Dillon said he likes the ease of getting an appointment as well as the fact that he and his doctor have each other's cellphone numbers.
"It's kind of like the financial advice business," said Dillon, a senior vice president in Bethesda, Maryland, with Morgan Stanley Smith Barney, which is a brokerage joint venture of Morgan Stanley and Citigroup Inc. "I can only have so many clients, or else at some point you don't know what their needs are anymore."