ENTREPRENEURSHIP AND GROWTH
Acacia Family Medical Group

Salinas, California
Primary Contact: Sumana Reddy, MD
Age: 39
Years in Practice: 12 years
Medical School: University of Toronto
Residency: University of California San Francisco — Natividad Medical Center, Salinas

Acacia Family Medical Group is located in Salinas, California, a fertile agricultural area known as the "Salad Bowl of the World." Salinas and surrounding towns are devoted to growing a variety of vegetables. For example, Salinas is famous for lettuce, Greenfield is known for its broccoli and Castroville is famous for artichokes. Adjacent to Monterey, Salinas has a population of 135,000 in an area of 48 square miles.

Acacia Family Medical Group sees approximately 1,500 patients a month and delivers approximately 100 babies annually. Acacia recently expanded its office space to accommodate two additional physicians who joined the practice after leaving the county hospital.

Dr. Reddy encountered a defining moment early in her practice career. As a 27-year-old just out of residency, Dr. Reddy had never thought of private practice as an option. After working at a migrant health center she joined a group practice where the physicians worried a great deal about how one physician's success might undermine another's. After considering a suggestion from husband, Dr. Reddy thought, "I can create the type of office-based practice that I want to be a part of." Within 60 days, Dr. Reddy had a loan, an office, partners (a physician and physician assistant) and patients.

High on her list of values were collegiality, a sense of personal satisfaction and no compromising on the quality of patient care. "I wanted to create a practice we could all feel really good about because patient care was absolutely central. We have made this practice a vehicle for personal and patient satisfaction, and we just won't compromise," explains Dr. Reddy. "We really see patients as human beings and their illnesses in the context of their families. Quality of care is foremost, and we do not tolerate expediency. We have found a home working together." She explains that each provider sees two-and-a-half to four patients an hour. There is no sense of rush or hurry in the relaxed, warm atmosphere of the office.

Dr. Reddy and her colleagues are proud of a compliment paid by a local 25-year family medicine veteran: "You run the kind of practice I would really like to run. If I were a patient I would come to your practice." As summarized by her first partner, Dr. Siqueiros, "We have an element of joy in the way that we treat patients and that happens to be called work." He continues, "Another important value is treating staff in a decent way. We don't take our staff for granted. We all want to feel good about working together for the patients."

"I wanted to personally prove that you can run a financially successful business and not cut a corner," says Dr. Reddy. "We do it right and we succeed financially." Dr. Reddy combines the best values of family medicine with a practical business sense. "My family helped me select the name "Acacia" because it represents an organic tree, like a family tree. It also helped that it began with an "A," and has the same name and meaning in both Spanish and English."

Dr. Reddy is also an entrepreneur. In between a quick conversation with her office mate and the office manager, she reviews leases and the design plan for an expansion of Acacia Family Medical Group about 10 miles away. It is clear that she thrives on the growth of practice operations. Now in practice for five years, her vision has become a reality and she wants to expand to one more location "because there is a great need for us there."

Patients who see Dr. Reddy and her colleagues come from a wide geographic and economic spectrum, from migrant farm workers to well-off retirees from Carmel. "One of the pleasures of working here is the diverse patient population. The different types of patients keep us on our toes. You have to constantly switch gears between one patient and another."

Dr. Reddy is proud that because Acacia has hired only bilingual staff the practice is truly seamless for Spanish-speaking patients. It is clear that the staff also enjoys the diversity of patients, from newborns to the elderly, and they advertise themselves as providing "Health Care for Children and Adults."

Dr. Siqueiros, who recently attended a 100th birthday party for one of his patients, describes the three- or four-generation families that he takes care of as providing an "extremely rich experience." He believes that the patients know they are being treated with integrity and that integrity in a family setting has a healing effect. Knowing a patient's family, having that context, makes the care of him or her "more coherent and less fragmented. Family members shed light in many corners," says Dr. Siqueiros.

Acacia has expanded office hours and does not close for lunch as many other practices in the area do. They are also open on Saturdays. Anyone who wants to be seen the same day is accommodated. As one patient says, "It is always a great experience to come here; everyone in the office makes me feel very welcome, and they have especially good doctors." To ensure convenience, comfort, and efficiency for patients, Acacia has taken the following actions:

• Telephones and reading materials are available in the reception area.
• Chairs, scales, and BP cuffs have been resized to be more welcoming for larger patients.
• A wide selection of books and a dedicated play area are available for children.
• Walk-in appointments are available during morning hours, including Saturdays, for acutely ill patients.
• Appointments are offered through the lunch hour.

Outpatient services provided by the group include:

• A full range of care for patients from newborns to geriatrics
• Gynecological procedures, such as IUD placement and D&Cs
• Dermatologic procedures

The physician assistant provides a combination of extended and continuing care services; there are no other allied health professionals within the group.

A full spectrum of inpatient services from obstetrics to level II newborn nursery to ICU care with consultation are provided by all five physicians at two area hospitals. They have decided not to continue to offer colposcopy because greater volume would be needed to keep up their skills. Dr. Reddy estimates that 90% of the group's time is devoted to outpatient care, with five to 10% given to inpatient care. The clinic also provides low complexity laboratory tests.

Compensation and Benefits

All of the physicians are paid on a salary basis. Dr. Reddy has studied several other types of compensation plans based on productivity, but has not yet found one that is compatible with the Acacia values. There is an employee manual that outlines all policies from e-mail to lactation to performance expectations. Vacation is earned by accrual and for those employed less than two years, it is 10 days; two to six years, 15 days; and those with six years or more earn 20 days of annual vacation. All employees receive 40 hours of annual sick leave. Employees can use accrued vacation or compensatory time off for parental leave for school visits. Acacia contributes 5% of pay to a 401K plan.

Hours/Practice Flexibility

Almost all of the providers work less than a full-time schedule. Dr. Reddy and Dr. Barroga see patients approximately 30 hours per week, Dr. Acton approximateley 20 hours per week, and Dr. Siqueiros sees patients approximately 32 hours a week. Sharon Gehringer, the physician assistant, handles unscheduled and continuing visits and works full-time. Since all of the physicians handle obstetrics and admit patients to the hospital, they share on-call duty and hospital rounds with one another, if needed. They also share call with another family medicine practice so that each member of the practice is on-call one weekend in eight.

Employees

The practice has made an explicit decision to hire younger, less experienced office staff and train them. To this end, they provide training and one-on-one mentoring and coaching “from the ground up.” On occasion the physicians provide help with employee needs, such as treating depression, offering financial assistance or help with unstable family situations. The practice provides tuition reimbursement up to $1,000 per year, dependent on successful completion of college coursework. There is an egalitarian atmosphere—all physicians and employees receive the same holidays, sick leave, vacation time, etc.

Employees really like the family-oriented celebrations hosted by the practice. There is a holiday dinner with spouses invited and a holiday party for the children with presents and one of the spouses playing Santa. There is also a summer picnic that is highly rated by employees’ families.

Balance

Dr. Reddy is very satisfied with the balance she has achieved between her personal and professional life. Although on some days she sees patients from 9 am until 5 pm and then has another hour of chart work, she does not work at all on Monday and Thursday mornings. Dr. Reddy says, “I am very concerned about the number of women physicians in family medicine who no longer deliver babies. I believe women can do it all, with the right type of flexibility.” Dr. Reddy is adamant about the ability of people to multi-task and integrate work life and home life. “For example,” she explains, “Often if I am playing a game with my son, I may be reading a journal article. Or during drive time to school I will be returning phone calls.” Dr. Reddy is especially appreciative of her colleagues who cover for her when she has less flexibility when her husband travels. When her children were younger she had a full-time nanny.

As previously noted, Dr. Danielle Acton, another working mother in the group, maintains the balance in her life by working 20 hours a week. She continues to deliver babies and is satisfied that she has enough time to devote to her children. Both Dr. Acton and her husband, who is also a physician and medical educator, are involved in providing care for homeless shelter residents. “We think our daughters appreciate what we do, especially when they see us at the homeless shelter,” she says. Dr. Acton is also an active female role model for the Girls Scouts of Honore Bay. According to Andrea Fuerst, program director, “She is a terrific model of a Girl Scout volunteer. Dr. Acton helps us with our science activities and makes it fun for the girls to work on studies of electricity and physics.”

New associates are offered a competitive salary and an option to buy into the group following an initial introductory period. Important qualifications of new associates are considered to be “top-notch training, good fit with colleagues, shared values of love for medicine with balanced lifestyle.”

A combination of patient demand and physical capacity are the factors that drive the need for additional physicians/providers. Patient referrals to specific physicians are based on request and schedule capacity. Sharon Gehringer, PA, was recruited to the practice from Texas about a year ago and comments that, “They really know how to utilize a physician assistant here; I am totally integrated into the practice.”

When new associates join the group a letter is sent to the community. In addition, open houses are held to introduce the new associate. Physician involvement on hospital committees is also encouraged.

The primary patient care needs of the community are determined via local surveys of the health of the population conducted by the Public Health Department. Based on those surveys, the practice has identified adult diabetes care, childhood obesity, pregnancy care, preventive health, and safety as areas of high need in the community.

In order to meet these needs the group provides health education in the form of articles in local newspapers and interviews with local press and TV on a range of topics, such as children's health or natural childbirth. Acacia considers itself the foremost practice in the area in terms of providing health education. In turn, the community seems appreciative of the group's efforts and provides avenues for the group to promote good health and safe habits, such as:

• Presentations to mother-baby classes at the Salinas Adult School;
• Use of volunteers from high schools to read to children in the clinic reception area;
• Presentations on women's health to sororities and hospital groups;
• Career talks to high school students and even to preschoolers; and,
• Participation in the Reach Out and Read program.

Martha Gomez, a receptionist, explains how the Reach Out and Read program works in the office. "Each child selects an age-appropriate book and the reading behavior is modeled by staff. It is a really good program." Dr. Reddy is on the board of the California Reach Out and Read program and reports that this is a well-researched medical intervention. With a small investment in books and time, it can have a huge impact on children. It also allows physicians to observe children and unobtrusively assess age-appropriate behavior. As described by Suzanne Flint, Director of California Reach Out and Read, "Dr. Reddy's group quickly understood the reasons for incorporating Reach Out and Read into their practice, and has involved community leaders as well."

Because the physicians in the group are bilingual in English and Spanish the practice has proven to be a good fit with the community. Acacia attracts a broad range of community residents. In spite of this, however, there are a number of underserved patients in the area, including patients seen at farm worker clinics and the county hospital. To encourage them to seek care a discount is provided for uninsured patients.

Dr. Siqueiros summarized his approach to professionalism by saying, “It takes great discipline.” He spends at least an evening a week, and some time during weekends, reading journals. In addition, he meets the requirements for family medicine recertification and attends lectures at the hospital. He often asks questions of consulting physicians. Dr. Reddy and the other physicians regularly read journals and attend meetings to advance their knowledge about family medicine., the Turtle Health Plan covers 25,000 lives, and most of the specialists in the county are involved in the plan. Dr. Nicely will definitely stay involved in Turtle Health to make sure it is successful. For the future, Dr. Nicely would like to stay involved in (although not lead) the UIHS clinic redesign efforts that are currently underway. "I am still trying to learn that personal success as a leader means sharing and giving power away to others."

In order to validate the care provided by the group, quality is closely monitored using outcome measures/performance indicators collected by external groups such as HEDIS. If problems are detected the data are monitored further to determine the source of the problem. The data are then shared with all the providers and a special focus is placed on problem areas.

A variety of patient satisfaction surveys are administered monthly. Data and comments are summarized, with the most positive and most negative comments shared with providers and staff to help them focus on areas where improvement is necessary.

The latest clinical information is accessed via websites and textbooks. Copies of practice guidelines are available via the AAFP website, among others.

Relationships with Other Specialists

To ensure that patients receive excellent care from others to whom they are referred, consultation letters are carefully reviewed, detailed referral letters are prepared, and other professionals are contacted verbally if treatment plans appear unclear or if further information is needed.

To foster a team approach a request for total management or consultation is included with the letters and returned to the practice. Further information is sent via fax or a direct call to the other physician is made. With respect to a team effort, the entire office staff-receptionists, medical assistants, medical records staff as well as the physicians-are considered part of the Acacia team.

Hospital Relationships

The Acacia group is affiliated with both hospitals in Salinas; the decision was based on proximity and broad reach of patients. As Chair of Family Medicine at Salinas Valley Memorial Healthcare System, Dr. Reddy also serves on the Medical Executive Committee and is Co-Chair of the Family Practice/OB Committee. Dr. Siqueiros serves on the Family Practice Executive Committee for one hospital and on the Credentials Committee for the other.

In 2003, Dr. Reddy spearheaded a successful challenge to one of the hospitals that had curtailed the neonatal privileges of 11 family physicians in its new Level II nursery and Neonatal Intensive Care Unit. Working with the California Academy of Family Physicians, Dr. Reddy mobilized her colleagues and patients to generate community support. As Dr. Reddy says, "I was spurred on by their (parents of infant patients) eloquence in explaining what a difference it made in their lives to have the doctor they had known all through their prenatal care be their babies' physician. We felt we had to draw the line when such a large number of active physicians' privileges were unfairly revoked."

Relationships with Medical Students and Residents

As a new practice, Acacia has been somewhat internally focused and has not fully incorporated teaching into the practice. Plans call for incorporating medical student teaching into the practice soon, however. In addition, members of the group work with residents from the Natividad Medical Center Family Medicine Residency Program, which is affiliated with UC San Francisco.

Purchasing

Technology purchase decisions are made collaboratively with the office manager and staff. A recent purchase involved the telephone system, which entailed soliciting bids and then comparing features and cost. Leasing terms were evaluated, and some components were purchased secondhand on Internet sites such as eBay.

Patient Communication

Although Acacia has a web site it contains only basic practice information and does not yet allow two-way communication. The site is expected to be more fully functional soon. Currently, email is used with some referral physicians and for communicating with insurance companies.

Practice Management Technology

An electronic health record system has not been implemented, although research has begun for potential purchase of a system. Most of the physicians use personal computers or personal electronic devices to answer questions while with patients. An integrated practice management system is in place for purposes of coding, scheduling, and billing; diagnoses are tracked via an office visit coding system.

Financial Management

The office manager (who has prior experience as a hospital billing consultant) a billing supervisor, and Dr. Reddy have overall responsibility for the financial health of the practice. Dr. Reddy secured the capital from her husband to open the practice and has secured capital for expansion via a mortgage on her home. With the help of an external bookkeeper, the office manager handles all payables. Dr. Reddy and another physician conduct analysis of the financials, along with the billing supervisor and office manager.

Currently, QuickBooks financial reports and separate expense spread sheets are used for the budgeting process. "We are in a growth phase and soon will develop a more sophisticated budgeting process," says Dr. Reddy.

Other Practice Resources

Legal, tax, and audit issues are handled by labor, real estate, and corporate attorneys, along with a local CPA. Human resource issues are handled internally, although a labor attorney consults with them in difficult situations. Payroll is handled by a payroll company, which offers supplemental human resources consultation.

Marketing

A business plan was developed by the group at the outset and was updated in 2003. A primary market is young families, especially pregnant mothers. Thus far, the marketing efforts that have proven most successful include presentations to community groups and other direct patient education. Least effective are yellow pages advertising and welcome wagons.

The most serious competitive threats within the geographic area are the loss of OB and pediatrics patients to increasing numbers of new OB/GYNs and pediatricians, as well as the expansion of a number of other physician groups. In response, the number of advertisements that emphasize OB and pediatric capabilities has been increased. The advertisements, placed in local newspapers, feature different types of families and emphasize quality care.

Coverage/Relations with Payers

The percentage of the practice covered by various payers can be broken down as follows: Private health plans: 70%; Medicare: 18%; Medi-Cal: 4%; and self-pay/no insurance: 8%. With the exception of Medi-Cal-only patients, all of the care provided is fee-for-service.

In 2001 Acacia was affiliated with a large IPA in the area and its patients were 70% HMO. The IPA became insolvent; Dr. Reddy joined its board to try and help identify solutions. A significant amount of charges were written off; however, loyalty was gained from the community as patients were turned away from other practices. Currently, there are no IPAs in the area.

Contracts are negotiated by Dr. Reddy and the office manager. Decisions regarding particular contracts are difficult and, unfortunately, have not always been successfully negotiated. While Acacia's value to the community has been to refuse to turn away patients, this makes it difficult to have clout in the contracting process. On the other hand, the group has been very tough about terms that could affect its autonomy or are too vague, and such terms are eliminated from the contracts. As part of the process for negotiating or re-negotiating contracts a standard letter is sent requesting rates for a variety of office visits and procedure codes; these are then compared with the Medicare RBRVS.

Reimbursement

Ninety-two percent of Acacia's patients are insured; eight percent are self-pay. A discount is provided for the uninsured which approximates insurance reimbursement and is 30% of the group's fee schedule. Acacia is very sensitive to the needs of the underinsured and uninsured and works out alternate forms of payment for both categories of patients. In addition every effort is made to provide medications and make decisions that are rational and cost-effective. When the practice added two physicians from the county hospital, it was with the clear understanding that their former patients, many of whom were uninsured, would move to their new practice.

 

Primary Contact:	Sumana Reddy, MD
	Acacia Family Medical Group
	Salinas, California

Dr. Danielle Acton, Acacia Family Medical Group, Salinas, California

Dr. Rafael Siqueiros, Acacia Family Medical Group, Salinas, California

Sharon Gehringer, PA, Acacia Family Medical Group, Salinas, California

Practice Staff:

• Gail Gopaul, Office Manager, Acacia Family Medical Group, Salinas, California
• Martha Gomez, Receptionist, Acacia Family Medical Group, Salinas, California
• Maggie Acosta, Medical Assistant, Acacia Family Medical Group, Salinas, California
• Jennifer Domingues, Front Office Coordinator, Acacia Family Medical Group, Salinas, California
• Jamie Gardner, Medical Biller, Acacia Family Medical Group, Salinas, California
• Veronica Orozco, Billing Supervisor, Acacia Family Medical Group, Salinas, California

Others contacted for this profile:

• Araceli Cervantes and baby, patients of Dr. Reddy
• Andrea Fuerst, Program Director, Girl Scouts of Honore Bay
• Juliet Nicero, patient of Dr. Reddy
• Suzanne Flint, Director of California Reach Out and Read
• Mark Tunzi, MD, Residency Director, Natividad Medical Center, UCSF-affiliated program

Other Resources:

• www.acaciamed.org
• www.reachoutandread.org 
• "Welcome to Acacia Family Medical Group" practice brochure