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Making the Switch From Hospital to Concierge Practice


To be successful, develop a sound business plan with realistic goals and be patient while the business ramps up.

When general internist Edward Espinosa began his career at Piedmont Hospital in Atlanta nine years ago, he planned to eventually transition from hospital- to office-based practice. However, the more he learned about the frustrations of the traditional fee-for-service environment, the less confident he became about taking that path.

"The hospital was willing to set me up in a clinic but then I found out that I would need to see 25 patients a day," says Espinosa, 43, who now runs Buckhead Concierge Internal Medicine in Atlanta. "It defeated the reason I wanted to practice outpatient medicine in the first place, which was to decrease my volume of patients and be less impersonal and rushed."

He did some research into alternative practice models and zeroed in on concierge medicine, where patients pay an annual fee or retainer in exchange for enhanced care and expanded access to providers. The model has gained popularity in recent years, according to the 2014 Survey of America's Physicians conducted by executive search firm Merritt Hawkins, which reports that about 7 percent of all physicians currently practice some form of concierge or direct-pay medicine while 13 percent have plans to do so at some point in their careers.

For Espinosa, building a concierge practice from the ground up represented a huge challenge. However, he saw it as the best path to long-term financial stability and career satisfaction.

"Concierge medicine seemed like something that I could continue into my retirement years and still enjoy," he says. "I went into medicine because I like caring for people and I felt like I couldn't do that well in an environment where it's all about volume."


In between his shifts as a hospitalist, Espinosa talked to friends who were running successful concierge practices in California. He also conducted extensive market research and hired a consultant to help him develop a business plan.

Location is the most important initial consideration, he says. He eventually decided on the Buckhead section of Atlanta, a relatively affluent and vibrant neighborhood with the potential to support a membership-based practice.

While encouraged by the success of other concierge practices, he was cognizant of the unique challenges of his situation. Most physicians who transition to concierge already run established traditional practices and are able to immediately convert a percentage of those patients into paying members. However, Espinosa started from scratch when he opened Buckhead Concierge in 2008.

To stay afloat, Espinosa continued to work full-time at the hospital, while maintaining a part-time schedule at his new office. The traditional seven days on/seven days off hospitalist schedule facilitated the arrangement, allowing him to keep regular outpatient office hours during his weeks away from the hospital.

He maintained that schedule for several years as he gradually ramped up to 50 patients over the first two years. Some of his first patients were those he had cared for as a hospitalist or patients referred by hospital colleagues.

The most effective marketing was through word-of-mouth, he says. The concierge concept was relatively new at the time and its message resonated with people who were frustrated with their current providers and looking for alternatives.

"Many people said they had no meaningful relationship with their physician, had to wait a long time for appointments, and often didn't even get their phone calls returned," he says. "What we heard over and over was that their current care was impersonal, and those frustrations were a major factor in growing our practice."

Gradually, Espinosa began reducing his hospitalist shifts and adding office hours as he reached 150 patients in his fourth year - halfway to his goal. He also added staff, including two nurse practitioners, one front-desk administrator, and one floater who helps wherever needed.

Bedside manner is always important but even more so when hiring in a concierge practice, he notes. He looks for extremely customer-focused employees who will reassure patients that they "have a meaningful relationship with our practice."

It took seven years to grow his patient panel to 300, but the practice now enjoys steady growth. Espinosa has a waiting list for new patients and plans to hire another physician within the next year.


Patients who join Buckhead Concierge pay a membership fee of $1,500 per year, which covers an expanded menu of services and 24/7 access to providers. The practice also accepts all major insurance plans and handles billing for services covered under patients' plans.

At first, the practice asked for the annual fee upfront but many patients were put off by the prospect of making such a large commitment, says Espinosa. He now uses an automated recurring billing service, which has relieved the front desk of the burden of monitoring collections and ensured a steady revenue stream.

"Automated monthly billing changed things drastically for the better," he says. "It made it easier for patients to join and created a more predictable financial model for our practice."

The biggest administrative headache now is billing insurers and tracking reimbursements, he says. However, the practice has continued to offer it as an added service for patients.

"We've gone back and forth about whether it's worth it because there's so much work involved with getting reimbursement from commercial insurers and Medicare," he says. "But we haven't dropped it because our patients want things to happen in a streamlined fashion."

Initially, Espinosa participated in Medicare's Meaningful Use program and other insurer incentive programs but opted out due to the heavy administrative burden.

"We're using our technology in a very robust way but we were running into all kinds of speed bumps and roadblocks with Meaningful Use in terms of how they wanted things measured," says Espinosa, who uses an EHR and runs a paperless office. "We had to assess how much time this was requiring compared with how much money we could actually get, and from our standpoint it wasn't worth it."

In recent months, handling growth has become the biggest challenge, he says.

"It's a healthy, busy practice now and we want to continue to provide the level of service people expect," says Espinosa. "That requires us to sometimes pull back and resist growing so fast that our customer service would suffer."


On a typical day, Espinosa sees between seven and 10 patients, traveling between his office, the hospital, and patients' homes. That leaves enough flexibility in his schedule to handle emergencies without having to cancel scheduled appointments.

For example, one of his patients came in recently with symptoms of dehydration and a urinary tract infection. He was able to see her in the office that afternoon and administer intravenous fluids and antibiotics, potentially preventing a trip to the emergency department.

If a patient is in the hospital, Espinosa connects with the attending physician and helps coordinate care by transferring patient records and following the patient's progress throughout his stay.

He then schedules a follow-up visit at his office within three days of discharge and keeps close tabs on the patient's progress. His EHR system is compatible with the systems used at three major Atlanta-area hospitals, allowing him to easily pull up discharge summaries.

"I have a very close follow-up with our patients to prevent unnecessary readmissions," he says. "We are tracking our readmission rates and seeing much better results than national averages, and that's because we have the time and flexibility in our schedule to provide that extra service."


Espinosa started Atlanta-based Buckhead Concierge Internal Medicine from scratch when he decided to switch from hospital to outpatient practice. He offers the following advice for others looking to make the transition:

Consider location. Perform an extensive demographic analysis of the zip codes you're considering before signing a lease, says Espinosa. Many successful practices are located in affluent, urban neighborhoods that can support growth.

Seek help. Talking to other physicians with established concierge practices can help you avoid common mistakes, he says. You might also consider hiring a consultant to help with initial setup.

Be patient. It took seven years for Espinosa to reach his goal of signing on 300 patients. To survive financially, he continued to work at the hospital until his new practice took off.

Create a business plan. "You should have a clear business plan before you spend a penny on converting," says Espinosa. "You need to understand the financial model and come up with realistic numbers for your expected growth."

Janet Colwellis a West Hartford, Conn.-based freelance writer specializing in healthcare. With more than 20 years' experience as a journalist, she writes frequently about clinical and practice management issues for several national publications. She can be reached at editor@physicianspractice.com.

This article was originally published in the May 2016 issue of Physicians Practice.

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