According to the article:
...[A]s long as the annual fee for a physical exam does not exceed the market value of the services, the business model would not be considered "insurance." For practices offering bundled fees for unlimited office visits, the report says contracts must define the services and use market values to avoid being considered insurance.This may seem like a victory for concierge physicians. But the problem is that the current prices of most medical services are set directly or indirectly by government. Government explicitly sets prices for services rendered through programs like Medicare and Medicaid. And many private insurers peg their own rates to Medicare (e.g., paying for an ultrasound test at 125% of Medicare), thus increasing the scope of government influence in setting prices in the nominally private sector.
Hence, most medical "market values" are ultimately set by government, rather than by patients and physicians negotiating in a truly free market.
To illustrate the danger this poses to concierge physicians, consider what would happen if Medicare costs kept skyrocketing and the government decided that it must lower the payments for a Medicare patient's office visit from $50 to $25?
Yet suppose that concierge physicians decide they wish to still charge $50 (because they judge that's an appropriate price point that allows them to practice quality medicine) and their patients are glad to pay that amount (because they wish to receive that quality service)?
Because of the massive influence of the government in medicine, the "market value" of an office visit would be at or near $25, even though the concierge medicine price of $50 would be the actual price in a free market.
Hence, the government could then semi-plausibly claim that concierge physicians were "gouging" their patients by charging above-market rates, making them liable to be regulated as "insurers".
This is why concierge physicians must oppose in principle any claim whatsover by the government that it should regulate their fees. Any money that a concierge physician earns is based on a voluntary agreement between doctor and patient, where both sides judge that they are making a fair and rational exchange.
If concierge physicians value their ability to practice according to their best conscience, they should continue to oppose the state of Maryland's attempt to slip in this "market value" loophole.
Concierge physicians are the "market value" and they should be proud of that fact. They shouldn't let the government steal that noble designation from them.
(Via Dr. Steve Knope.)