Kareo believes in the independent practice and the physician entrepreneur. Small practices are vital to their communities for the personalized care they can offer; however, to keep the doors of a small practice open, healthcare providers need to learn to think like an entrepreneur to ensure financial stability and improved patient satisfaction. And there’s never been a better time to be a physician entrepreneur in healthcare. The demand for individualized care and convenience has become exceedingly important to patients as they are coming to expect the same level of service from their provider as they receive in other aspects of their lives. With the average deductible exceeding $1,200 and roughly 80 percent of employers offering high deductible plans in 2015, patients are beginning to think more like consumers. This new demand is a crucial piece for healthcare providers who own a private practice, as they are better positioned to handle this demand than larger healthcare systems. In short, the trend towards the consumerization of healthcare favors the small practice over large healthcare organizations. To empower the small practice physician, Kareo is shining a light on the path to success—an agile medical practice model—combining traditional fee for service options with the flexibility of concierge services. This includes offering flexible payment plans and increasing the focus on practice marketing and patient engagement.

1. Private Practice Model
Perspectives 2015 Survey
Conducted by Kareo & AAPP

2. Agenda
2
Agenda
2
• Methodology
• Respondents
• Motivations & Realities of Practice
Models
• Key Trends in Private
Pay/Membership Medicine

3. 33
• Approximately 100,000 physicians surveyed yielding 862 respondents
• 206 Private Physicians
• 477 Conventional or Fee-for-service Providers
• 179 other
• Compared private physician respondents to conventional, insurance-
based practice respondents across all common questions, and used
statistical testing to determine where significant differences existed
• Reported on questions specific to either private physician practice
respondents or insurance-based practice respondents
Methodology

4. 4
About Respondents

5. 5
Gender
40%
47%
60%
53%
Conventional Private
Female
Male

6. 6
Age
7%
21%
24%
26%
21%
4%
14%
29%
32%
20%
21-29 30-39* 40-49 50-59 60 or older
Conventional
Private
* Denotes statistically significant at a minimum 95% confidence level

7. 7
Professional Designation
10%
74%
14%
2%
8%
80%
10%
2%
DO MD NP PA
Conventional
Private

8. 8
Board Certification (MD/DO)
14% 12%
86% 88%
Conventional Private
Yes
No

9. 99
• Conventional physicians: 19.6 years
• Private physicians: 19.9 years
Years in Practice

10. 10
Group Size
40%
36%
10%
7%
7%
55%
26%
8%
8%
3%
Solo practitioner*
2-5 practitioners*
6-10 practitioners
11+ practitioners
Health system or academic medical center
Private
Conventional
* Denotes statistically significant at a minimum 95% confidence level

11. 11
Comparing Motivations & Realities
Between Private and Conventional
Physicians

12. 1212
Are you currently using a concierge, direct
pay, or other membership model in your
practice?
24%
76%
Yes
No

13. 13
What is the likelihood you will transition to a
concierge, direct pay, or other membership
model in the next 3 years?
54%
32%
14%
Not likely
Somewhat likely
Highly likely
Primary care MDs and DOs

14. 14
Top 2 Motivations for
Transitioning to Private Medicine
39%
42%
35%
22%
41%
4%
26%
65%
42%
38%
46%
8%
Earn more money*
Spend more time with patients*
Improve work-life balance
Practice lifestyle, functional, or integrative medicine*
To separate from the insurance payer system
Other
Private
Conventional
* Denotes statistically significant at a minimum 95% confidence level

15. 15
Average Length of a Patient Visit
49%
27%
18%
5%
19%
39%
33%
9%
15-20 minutes* 30 minutes* 45-60 minutes* Other (please specify)
Conventional
Private
* Denotes statistically significant at a minimum 95% confidence level

16. 16
How many days of the week do you
see patients in the office?
2%
4%
10%
23%
61%
0% 0%
2%
10%
8%
19%
52%
8%
1%
Once a week 2 days a week 3 days a week 4 days a week 5 days a week 6 days a week* 7 days a week*
Conventional
Private
* Denotes statistically significant at a minimum 95% confidence level

17. 17
What is your maximum daily visit
volume?
* Denotes statistically significant at a minimum 95% confidence level
Graph distributes “Other” respondents from previous question into “< 10” and “> 30” categories
1%
12%
13%
21%
17%
23%
13%
9%
39%
25%
9%
4%
5%
8%
<10* 10* 15* 20* 25* 30* > 30
Conventional
Private

18. Patient Panel Size
Conventional
24%
14%
12% 11%
39%
< 500 501-1000 1001-1500 1501-2000 >2000
Private
26%
13% 13%
12%
7%
29%
< 100 101-200 201-300 301-400 401-500 >500

19. The average private medicine provider
works 42 hours a week while the
average traditional provider works
47 hours per week.

20. 20
% Clinical Time vs. Administrative
71.8
76.0
Conventional Private
% Clinical Time

21. 21
Sources of New Patients
Ranked by Importance
1.7
2.3
3.3
4.1 4.1
4.8
1.5
3.1
2.8
3.9
4.5 4.5
word of mouth physician* online* advertising employer* other
Conventional
Private
* Denotes statistically significant at a minimum 95% confidence level

22. 22
20% of practices—conventional or
private—spend less than $800 a month on
marketing.

23. 23
Top Challenge Faced by Practice
11%
19%
18%
16%
2%
33%
10%
7%
15%
39%
2%
27%
Choosing and implementing new technology
Finding and keeping qualified staff*
Managing regulatory compliance
Recruiting new patients*
Retaining existing patients
Staying financially viable
Private
Conventional
* Denotes statistically significant at a minimum 95% confidence level

24. Private Pay Practice Trends

25. The average practice has been concierge or
direct pay for 8 years.

26. 26
How did you start your concierge or
direct pay practice?
47%
53%
Converted from an
insurance-based practice
Started the membership
practice from scratch

27. 27
How do you describe your practice?
37%
33%
30%
Cash Practice
Concierge
Direct Primary
Care (DPC)

28. 28
Billing models for cash-based fee for
service practices
29%
71%
Based on visit time
(i.e., # of minutes)
Fixed fee by
service type

29. The average annual membership fee is
$2,025.

30. 30
What membership packages or payment
plans do you offer? Check all that apply.
65%
44%
61%
42%
36%
Monthly payment plan Quarterly payment plan Annual payment plan Discounts for
couples/families
Discounts for children
Note: categories are not mutually exclusive and will not sum to 100%

31. 31
Of your total patient panel, what
percentage are members?
37%
10%6%
19%
28%
<25
26-50%
50-75%
75-99%
All patients are
members

32. 32
If you accept insurance, please check all that apply to
the status you have with the following payer types:
17%
23%
45%
Medicare non-participating
Medicare opt-out
Out of network with health plans
Note: categories are not mutually exclusive and will not sum to 100%

33. 33
Services Offered (Select all that apply.)
7%
8%
10%
13%
15%
17%
18%
22%
23%
24%
27%
28%
29%
30%
32%
36%
38%
39%
40%
45%
46%
47%
48%
53%
55%
59%
68%
72%
Remote monitoring - Sleep tracking (i.e. using a FitBit, or other sleep monitoring…
Carotid IMT
Remote monitoring of activity (i.e. using a FitBit or similar device)
Remote monitoring of biometrics (i.e. blood pressure, weight, glucose) using a…
Home sleep testing
Hospital admission
Mobile apps for patient management
Nutritional supplement dispensing using an online dispensary and direct shipping
Nutritional supplement dispensing in the office
Genetic testing (e.g., 23andMe)
Body Composition Assessment (BIA)
Exercise program design
Pharmacogenomics testing
Hormone replacement therapy
Patient education using seminars
Hospital visitation
Weight loss program
House calls
Nutrition assessment
Personalized, documented health management plan for the year
Nutrition consultation
Navigation and coordination of care with specialists
On-site lab drawing
Health Coaching
Virtual consultations via phone, text, email, and/or video chat
Pre-negotiated cash prices for office services and/or labs
Annual health evaluation
Ongoing Management of acute and other primary care needs

34. Technology

35. 35
Private pay practices are more likely to use
telemedicine, kiosks, and practice
marketing platforms.

36. 36
Top Software Features
• When asked about top software features…
• Private pay practices were more likely to want online scheduling, patient portals, online
billing & payments, and credit card on file.
• Traditional practices were more likely to want improved claims management, financial
reporting, and specialty EHR features.

37. 37
In conclusion…
There are challenges and benefits for both
private and conventional practice models.
However, despite varying workflows and
processes, a common need for all independent
practices is the right technology, tools, and
support.

38. 38
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