Health Care Cost Trends
The Division of health Care Finance and Policy
Responses to request for testimony
Pediatric Health Care Associates, P.C.
Pediatric Health Care Associates is a large group practice which offers appointments in five
locations on Boston’s north shore. Our Peabody office is open 365 days a year—including
weekends and holidays. Each office has a CLIA certified in-house laboratory and additionally
the Peabody office has an x-ray facility. We are committed to seeing our patients whenever
possible, so that patients might avoid the emergency room for routine pediatric problems.
Should concerns arise outside of our clinic hours, both a triage nurse and an on-call pediatrician
are available 24 hours a day for help. When emergency services are needed, we are happy to
refer our patients to local emergency departments and will work with them to coordinate the
The care provided at Pediatric Health Care Associates is focused on the entire family. Our
physicians are certified by the American Board of Pediatrics and most are Fellows of the
American Academy of Pediatrics. Our nurse practitioners are certified by the National
Certification Board of Pediatric Nurse Practitioners & Nurses and/or the American Nurses
Credentialing Center as Pediatric Nurse Practitioners.
The services provided at Pediatric Health Care Associates are reimbursed on a fee for service
basis. Much comment was made in the reports regarding fee for service payment methodology
and the impact on services provided. It is important to realize primary care pediatrics is much
different than services provided by specialists. During the busiest months, clinicians are working
at 120 per cent of capacity. During the least busy months they are working at ninety to ninety-
five per cent of capacity. There is a huge incentive to provide care efficiently because patients
want to be seen by their physician and not wait hours in an emergency department.
Eighty-five to ninety per cent of practice revenue comes from evaluation and management,
preventive medicine services and immunization administration. Preventive medicine visits are
encouraged and the practice follows guide lines published by the American Academy of
Pediatrics. Preventive medicine visits comprise approximately thirty- five to forty per cent of
our visit total. The remaining visits are for same day sick, follow-up and urgent visits. The
reports suggest a change in reimbursement methodology would decrease utilization and cost but
I did not see any mention on what the consequences would be. A capitated reimbursement
system can easily lead to less care and negative outcomes. A major shift in patient expectations
will be required.
Less than one per cent of Pediatric Health Care Associates revenue comes from imaging services. The
specific services provided are limited and were selected to provide treatment in the most cost effective
The revenue from imaging services at Pediatric health Care Associates is not significant so we have not
One hundred per cent of the patient revenue at Pediatric health Care Associates is paid on a fee for
service basis. Approximately four per cent of Pediatric Health Care Associates revenue was generated
based on higher quality.
For the period 2006 through 2008 the per capita cost for our patients has remained flat. During the
period we have experience an increase in the total number of patients but the costs have remained flat.
One hundred per cent of the physicians at Pediatric Health Care Associates are paid based on a salary.
We have experienced difficulty recruiting and retaining physicians because of salaries, directly related to
reimbursement. The retention problem is worse if the spouse is also a physician and they have more
attractive opportunities in another part of the country.
During the period in question Pediatric Health Care Associates has not negotiated any payment rates.
The physicians are part of a PHO which negotiates certain contract on their behalf. Contracts which are
not part of the PHO have set rates which the practice decides whether or not to participate. Pediatric
Health Care Associates as a policy enrolls in all available health insurance plans.
Pediatric Health Care Associates maintains extended office hours at their Peabody location. The
Peabody location is also open 365 days a year. Pediatric Health Care Associates offers extend hours and
weekend coverage in an effort to be available for patients and reduce the need for referrals to the
emergency department. The practice currently tracks ED visits, asthma hospitalization, specialist
referrals all in an effort to provide care in the office versus a higher cost alternative. The practice has a
long-term desire to expand behavioral health services. The physicians feel strongly that the
pediatrician’s office is a more familiar/ comfortable environment for children to receive services.
Pediatric health Care Associates affiliation with the Partners network is a huge plus in helping to reduce
costs, improve quality and efficiency. The availability of accurate and consistent information is
important to controlling costs.
Competition among primary care providers already exists. Patients have many options when it comes to
selecting a pediatrician.
Making data regarding reimbursement and quality public is a trend which the market place will demand.
The biggest problem is in the quality and accuracy of the data. The systems which I have seen are
fraught with problems and don’t take into consideration differences among practices. A large practice
with hours of operation and number of locations similar to Pediatric Health Care Associates is open to
criticism of not always receiving care from their primary physician.
No additional comment.
None of the reports seems to address patient expectations and demands. Patient education has to be
high on the list of areas which need addressing. As the health care delivery system evolves patients
need to understand in clear terms what the impact will be on service available to them.
SIGNED UNDER THE PENALTIES OF PERJURY THIS 11th DAY OF March 2010
Pediatric Health Care Associates