CUTTING EDGE TECHNOLOGY IN A SMALL GROUP PRACTICE
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practicing pediatrics, adult and geriatric medicine. The four-year-old
practice prides itself on combining the traditional bedside skills of
the family physician with cutting edge information technology to provide
an unparalleled level of patient service and quality. Dr. Escobedo was
able to bring an established practice, which predated her by a decade,
with her when Peak opened.
| PRACTICE SUMMARY CHART | |
| Type of Practice | Private, Urban |
| Physicians | 4 |
| Additional Providers | .5 NPs |
| Yearly Patient Visits | 3,200 |
| Yearly # of Deliveries Annually | 50 (until OB was terminated in January 2004) |
| Additional Employees | 6 additional staff |
| Affiliations with Hospitals | Practice shares space with a gastroenterologist, and acupuncturist/herbologist and an acupuncturist/sonographer |
| Residents | UCLA-Santa Monica Hospital, St. John's Hospital |
| Medical Students | One third-year student from USC on occasion |
The FNP at Peak Health staffs regular office hours at the college health center and manages the practice’s nursing home patients. One RN, who is disabled, works from home writing normal lab letters to patients. All but three of the office staff are also trained as MAs and do all of the office functions.
Additional services provided in the office include:
- Ultrasound
- HIV Oroquicks
- Travel vaccination
- Urgent Care Generic Medication Dispensing
- Limited supplement dispensing
Compensation and Benefits
Dr. Escobedo and her partners are well aware that they have made some financial sacrifices to own their own family medicine practice. Dr. Escobedo says she is fortunate to have been able to take a third mortgage on her home because property values have at least doubled since she and her husband purchased their home. They tried to keep start-up expenses to an absolute minimum and a year of planning was crucial to achieving that goal. Dr. Madden’s information technology expertise was also an invaluable contribution to the start-up costs. For the first year he worked almost full time on getting their technology systems to where they all wanted them to be.
On an annual basis their goal is to recoup the $120,000 per month that it would take to operate the office comfortably. So far this year has been their best and they have recouped $100,000 per month. Their goal for overhead is 60% and they are now at 68%. Salaries are minimal, “but you don’t do this to get rich,” as Dr. Madden says. “We love our work and we like practicing together, so money isn’t everything.” The goal is to pay each of the physicians $80,000 to $100,000 annually. Their model is for all to share compensation equally, although Dr. Escobedo recognizes that this may not be possible for the long term, and they will be considering productivity in the future.
Each of the physicians takes off two or three weeks a year for vacation and/or CME. This arrangement has been rather ad hoc because in the three years Peak Health has been open one partner had twins after two months of bed rest, there were two marriages, one divorce and one partner had to recertify. They have a plan for formalizing work expectations, but thus far the physicians have been working as hard as they each can, recognizing that the payoff will be long term.
Hours/Practice Flexibility
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PRACTICE: WEEK-AT-A-GLANCE
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Dr. Escobedo describes her typical work week as 50 hours in the office and 10-12 on the computer. In office time, she includes visits to nursing homes and a local college. Her husband, a trumpet-maker, is a stay-at-home dad who cares for their two children. Their home is about five blocks from the office so Dr. Escobedo is in and out frequently. She considers this proximity to be essential, “We were very lucky to find a Santa Monica home that we could afford and that was close to the hospital.”
Similarly, Dr. Madden, Dr. Chen and Dr. Saeki work long hours but enjoy a modest amount of flexibility. Peak Health Medical Group is proud of its workable call schedule. Instead of being on call from weekend to weekend, their call is from Wednesday to Wednesday, offering the advantage of tying up only one weekend. The person on call does not have office hours but covers all call, rounds at the hospital, and makes nursing home visits. During call week the on-call MD only sees patients in the office when it fits into his or her schedule.
To bring in extra income Dr. Escobedo also works for VITAS Hospice’s Encino office on a contractual basis. She handles these patients on the evenings, weekends, during call weeks, and over her lunch hour. Dr. Madden has a similar challenge, that of being the computer expert and a full-time family medicine specialist. Though it is not easy to juggle he enjoys this aspect of the practice and the other physicians and health providers cover for one another when there is an emergency.
Employees
Employees of Peak Health have worked in other practices and seem impressed with this one. “The doctors here ask for our opinions, take them into consideration and work with our opinions. It is really unique here compared to the six or seven other offices I have been in. I actually can’t stop talking about it – it is so wonderful,” explains medical assistant Armando Hidalgo. He and the other employees recognize they are in a start-up situation and appear to accept that they haven’t received raises in three years. Dr. Escobedo explains, “We were new business owners and we knew we needed experienced people. We found them because they shared our spirit.”
Balance
Female physician mentors have been critically important getting Dr. Escobedo where she is today. The assistant residency director at her family medicine residency was particularly influential. A real renaissance woman, this educator was a constant reminder that you could have a rich family life and be a productive and good physician. Dr. Escobedo says, “These female mentors showed me that it really can be done. You can run a successful practice and compete with others while having a family.”
Dr. Escobedo readily admits that her biggest challenge is staying in balance. “We had to run a marathon to get the practice going, but now it is time to slow down a little. But that’s difficult because of the expectations we all have for ourselves.” Another challenge is managing the administrative aspects of the practice while seeing a full load of patients. Dr. Escobedo handles all of the administrative and human resources and Dr. Madden handles all of the information technology. She readily acknowledges the tremendous support of her husband and children. “I could not do this without my husband’s support. He is absolutely terrific.” Dr. Escobedo explains.
Peak Health looks for the following qualifications in employed physicians and/or prospective new partners:
- Familiarity with the practice
- Computer competency
- Enthusiasm
- Excellent training and experience
- Willingness to delay compensation in order to build a quality practice
The practice has had new partners leave and now works out a full employment contract so there are no discrepancies or difficulties when this occurs. Now that the practice is up and running physicians must work with Peak Health as employees and get to know the staff before being considered for partner. Peak Health looks to hire new employees when regular demand proves to be above capacity. The patient’s request for a particular physician is always first priority, followed by provider availability.
It has not been difficult to introduce new physicians to the practice, as they have all come from the local residency where they began relationships with both patients and referring physicians. Dr Escobedo adds, “of course we introduce them and ‘talk them up’ whenever we see other docs because referrals are so important to their early success.”
Affordable primary care is a principal need of Santa Monica residents. Dr. Escobedo explains that it is difficult to identify more specific needs, as the Los Angeles population is so dense and diverse that the practice targets only a small percentage of the middle class. Within two miles of one another there are families with average incomes in the millions and then others who get by on $30,000 or less. In order to meet the needs of its patients, the practice:
- Maintains open IPA contracts for capitated plans
- Charges affordable fees with discounts for cash
- Negotiates cash prices for radiology and lab services
- Offers open access scheduling for patient flexibility
- Employs young, tech-savvy doctors who embody the heart of family medicine – listening
- Has a modern atmosphere
Peak Health is fully integrated in the community and most of its patients are referred by word-of-mouth. All the physicians live in the area as well as participate in the community. In particular, Peak Health has reached out to local colleges which were practically abandoned by providers when budgets became tighter. Dr. Escobedo believes the community perceives the staff as young, competent, tech-savvy, friendly, and committed to their patients. As a whole, Peak Health does as much as it can for the community. In addition to their work with local colleges, staff members give lectures and participate in health fairs.
Dr. Escobedo has children in elementary school and helps out the PTA when needed. Formerly on the PTA board, she found it a bit overwhelming and now prefers more of a ‘worker bee’ role to one in leadership.
When asked about her own professional growth Dr. Escobedo explains that "starting a new practice was a huge source of growth." In addition to learning about database structures and even the basics of programming in HTML, she has also learned a tremendous amount about the business of medicine. On a day-to-day basis she has had to learn the intricacies of contracting, banking, human resources and the installation of blood pressure cuffs. She also took the AAFP fundamentals of management course and read dozens of books about management, leadership and the future of medicine. She reads Family Practice Management, American Family Physician, and a couple of IT journals. She regularly researches topics related to specific cases via www.aafp.org.
Currently there are no outcome measures or performance indicators collected by Peak Health. As the practice is only three years old it is still actively growing and in the process of fully implementing its electronic office. The infrastructure needed to efficiently and effectively conduct quality studies is being built and is viewed as important. However, funds and time restraints present a challenge.
To measure patient satisfaction Peak Health sent a newsletter and full questionnaire to their patients with e-mail. Overall, the practice was pleased with the results which showed that 80% of the patients were either extremely satisfied or very satisfied.
Peak Health is currently establishing a clinical research practice to do paid clinical research using their patient database and community connections to recruit subjects. Its physicians see participation in Phase III and IV studies as an excellent opportunity to offer treatments and medications at no cost to their patients and to diversify and augment their revenue stream.
To ensure that patients receive excellent care from others to whom they are referred, staff members send letters for all lab reports received and try to do their due diligence to follow-up with people they've referred.
By backing one another up and asking questions Peak Health fosters a team approach when treating/referring patients. All of the doctors share an office to facilitate curbside consultations and regular communication about patients, workflow and personnel. Peak Health physicians know that everyone - patients, entire office staff, cleaning people, IPA, doctors — has to be part of the team to perform at the highest possible level.
Relationships with Other Specialists
The vast majority of Peak Health referrals are by word-of-mouth from current patients. Dr. Escobedo believes that referrals from community physicians are based on their opinions of the practice and Peak Health's flair for technology. All but one of the Peak Health physicians completed their residencies at the Santa Monica community residency program and relationships they began as interns continue to be important. Together they have more than 25 years' experience in Santa Monica and their connections are amazingly deep despite the practice being only a few years old.
Dr. Escobedo reports that "while we have an excellent list of community subspecialists, this list is always limited by the patients' payor status. Capitated patients have a very restricted panel we can choose from. We have our favorites in every specialty based on quality, style and our ongoing relationships and mutual respect-as well as the given patient's temperament."
Relationships with Other Health Providers
Peak Health currently leases space to an acupuncturist and regularly refers patients to him. Many of Peak's patients use supplements and a range of alternative therapies. As Dr. Escobedo explains, "We encourage our patients to educate us about the alternative therapies they are using and we offer Western medicine's perspective on those therapies, when indicated, in a respectful manner."
Hospital Relationships
Peak Health is affiliated with Santa Monica UCLA and St. John's Hospital, an easy choice as they are local. Dr. Escobedo works as attending staff and for years participated on committees. She says that the relationships she has with the nurses and employees are very valuable for patient referrals.
Relationships with Medical Students and Residents
Dr. Escobedo incorporates teaching in her professional life primarily through interactions with the most obvious source-her patients. She always encourages young patients who show any interest in a career in health care. "One friend who followed me around when I was a resident is now a third-year medical student," she says. She welcomes externs from her alma mater — Washington University in St. Louis and USC — and enjoys working with enthusiastic students.
Technology purchase decisions result from Dr. Madden's appraisals and return on investment analysis. The practice's latest purchase, new Compaq tablets, was a relatively easy decision that involved searching for tablets that fit the practice's specified criteria. Key features included a keyboard, wireless system, tap screen, fully functioning PC running Windows 2000 or XP, long battery life, an affordable price per years of use, and a maximum life span of 2.5 years. They determined that since IT changes so fast a longer life span would leave them frustrated.
Purchasing
Purchasing decisions are made collaboratively among the group, and they are always looking for the most efficient way (including eBay) to purchase supplies for the practice and the office.
Patient Communication
The practice's website (www.peakdocs.com) is used primarily for postings, directions, lists of insurance accepted, patient education and on-line scheduling. All correspondence with patients is done via e-mail if an address is provided, otherwise it is mailed. The practice accepts e-mailed documents from other physicians or health care providers, and similarly will e-mail information to consultants with an e-mail address. During a recent flu season the practice sent an e-mail message to its patients indicating how it would be allocating its scarce supplies and offered suggestions for other sources.
EHR/Practice Management Technology
Three words — cheaper, faster, better — describe the practice's electronic health record. Peak Health physicians cite several advantages to the electronic system, including:
- easy to use
- cost effective
- error reduction
- quick patient follow-up with prescriptions and other orders
To help administer her practice Dr. Escobedo carries a wireless tablet PC with her and uses it for everything. At home she has remote access via her desktop, in addition to a wireless network.
The practice's EHR system has integrated billing and scheduling functions and coding is done by the providers at the same time they place orders. Their EHR is further utilized by Peak Health for tracking purposes, as is the website www.webinr.com, which specifically manages its Coumadin patients.
Dr. Madden's main challenge is to constantly improve the data entry and retrieval interfaces embedded in the electronic health record. As the database structure becomes more and more familiar the physicians are becoming adept at incorporating decision support and best practices knowledge to make it easier and easier to do the right thing. "We are constantly updating them to make sure that our checklists for various conditions reflect best practices," says Dr. Madden.
Knowledge Management Technology
At point-of-service, all of the physicians access medical databases and medical information via their tablet PCs. Some particularly popular services are www.familydoctor.org, www.fpnotebook.com, www.cdc.gov, the Web version of Epocrates and the PDR.
Practice Management
To keep the practice in good financial health Peak has a full-time medical biller and a part-time consultant who manages coding and collections. Until last fall one partner did all the bookkeeping, payroll, rent and partner payments. The practice is currently working to delegate these jobs to a bookkeeper. In terms of budgeting Peak Health projects annually and keeps to a tight monthly budget. If overspending occurs one month it must be made up using surpluses from the prior month. Presently there is no administrator for the practice, and Peak Health is in the process of grooming a current staff member for the job.
Financial Management
Dr. Madden, with the help of Dr. Saeki and the new bookkeeper, use the practice management software included with the EHR, QuickBooks and online banking to track, verify and report cash flow, revenues and expenses. Dr. Madden wrote a simple time clock, and interfaces standard Web-based reports with the QuickBooks database. Payroll is done by the bookkeeper with QuickBooks payroll.
Other Practice Resources
Peak Health belongs to CAP-MPT (Cooperative of American Physicians, Inc./Mutual Protection Trust) which provides malpractice coverage with extra services, including business management support, lessening the necessity for legal consul. An accountant manages taxes and audits, and a bookkeeper is currently in training to assist.
Peak Health is in the process of building human resource policies. The practice began with three employees and now has 12. The practice has hired consultants for various projects, seeking bids through the Internet site, www.prosaavy.com before making its selections.
Governance/Physician Leadership
When they started the practice the founders were careful to develop a corporate structure for the partnership including incorporation and a buy-sell agreement. They were working on a partnership agreement and an employment agreement when one of the founding partners decided to leave. The buy-sell was invoked and was very important in the corporation’s survival. Because of the expense of attorney’s fees Dr. Escobedo says they made a mistake in not developing the partnership agreement until after they were up and running. They are currently finishing up partnership agreements for the shareholder employee-physicians.
Marketing
Peak Health has a business plan and long-term goals for growth. The emphasis on the plan varies in relation to the challenges the practice is facing at any given moment. Marketing efforts target INS applicants, college students, new parents, and friends and families of existing patients. A quality e-mail newsletter has proven to be the most effective marketing tool, while ads in the telephone book are the least effective.
The biggest threats facing Peak Health are services that aren’t reimbursed, discounted fee for services, and collection delays. As Dr. Escobedo says, “There are more than enough patients to go around but reimbursement is so poor that the practice often cannot afford to provide the care.” In response to market pressure Peak Health has moved 1,500 patients from one IPA to another, stopped drawing blood in the office for patients under one “particularly heinous” capitated contract, and diversified its services.
Coverage/Relations with Payers
Peak Health is aiming to keep its payor mix at a 50:50 capitated and FFS ratio, but still is dependent on the one large IPA and big insurers who may account for 10-20% of clinical revenue. The percentage of the practice covered by various payers can be broken down as follows: 55% capitated/managed care; 45% discounted FFS; Misc. PPO plans 25%; Medicare and Medi-Medi 10%; Medi-Cal 5%; Cash/self-pay 5%.
Nature of Contracts
Dr. Madden and Dr. Escobedo are in charge of negotiating contracts for Peak Health. When doing so they focus on maximizing revenues and do not assume risk for anything other than their services. When negotiating or re-negotiating contracts the practice uses return on investment or revenue projection for analysis purposes. They first look at whether or not they can negotiate aggressively (i.e. “are we prepared to walk away or not?”) followed by costs vs. revenues, cash flow, risk amelioration, opportunities to increase reimbursement for quality, hassle factors, downstream benefits, and magnitude of the contract.
Reimbursement
Ninety percent of patient visits/surgeries at Peak Health are covered by insurance. For those patients who are un- or under-insured the practice offers cash discounts. College students paying cash benefit from an additional 30% discount on the already low cash prices. There are no problems with the less than 10% of self-pay patients the practice sees. Peak Health works hard to collect payment at the time of service, and maximize “the bang for their buck” by offering negotiated cash prices for laboratory exams and some radiology services.
| Primary Contact: | Jodie Escobedo, MD |
| Peak Health Medical Group, Inc. | |
| Santa Monica, California |
Dr. Brian Madden, Peak Health Medical Group, Inc., Santa Monica, California
Dr. Wakana Saeki, Peak Health Medical Group, Inc., Santa Monica, California
Dr. Jennifer Chin, Peak Health Medical Group, Inc., Santa Monica, California
Practice Staff:
- Armando Hidalgo, Medical Assistant, Peak Health Medical Group, Inc., Santa Monica, California
- Yolanda Marquez, Medical Assistant, Peak Health Medical Group, Inc., Santa Monica, California
Others contacted for this profile:
- Rivki Beer, RN, Team Manager, VITAS Hospice, Encino Office, Encino, California
- Tracey R. Childs, M.D., M.P.H., F.A.C.S., Surgical Associates of Santa Monica, Santa Monica, California
- Marty Cregg, patient of Dr. Escobedo
- Larry Kagan, medical student from USC
Other Resources: