The initial staffing business model of Diversified Professionals, Inc. (DPI) proved to be successful immediately. Rapid growth, team development and provider confidence spread news of the DPI brand like wildfire. The company was able to fully staff well-trained and competent nurse anesthetists at any facility that called with an urgent need. Even though the team at DPI was successful at what they did, the anesthesia market began to consolidate in 2007, lessening the shortage of providers and decreasing the need for facilities to utilize a staffing service. By natural attrition of the business cycle, DPI lost staff, contracts and had to consider a new way of doing business.
In the summer of 2007, down to only two owners and one committed full-time CRNA, the team chose to change the direction of their business model. It was obvious that market conditions were changing and the company had to reconsider from where opportunities would come. Gerry Pedersen was a close friend and colleague to DPI and had a relationship with HealthSouth Surgery Center. As one of the original Ambulatory Surgery Centers in the Baton Rouge market, it was in decline, but Gerry believed the center could be of value to DPI. The longtime anesthesia group there gave notice and the opportunity to move into the fee-for-service model had finally presented itself.
The HealthSouth Surgery Center contract was a huge lift for DPI, allowing for the opportunity to install key pieces of their current-day platform. One of the most important pieces was onboarding Dr. Scott Gardiner to help staff the physician side of the operation. Additionally, the group started its own Revenue Cycle Management company, I-MD. With no support staff at the time, all administrative and billing operations were done after hours by the two partners. These decisions laid the foundation of what was a strong pivot by DPI. DPI was able to implement a service involving both CRNAs and physician anesthesiologists practicing collaboratively and perform its own billing services. Although short-lived, the HealthSouth Surgery Center contract was instrumental in moving DPI into this new direction. It helped build expertise and confidence with the new business model and it developed key relationships with some highly respected surgeons in the Baton Rouge market.
Relationships have been the key to DPI establishing credibility and trust throughout its history. Although DPI served HealthSouth for only eight months, strong connections were formed with surgeons from the Bone and Joint Clinic. By this time, Gerry, Jeff and John knew and had worked with several of these surgeons for years. Coming in with fresh ideas, anesthesia efficiencies and innovative techniques that the current anesthesia team was not providing, DPI was able to increase the amount of service with no stipend. All money earned was based on patient and insurance billing. The facility was successfully staffed with one physician anesthesiologist and two nurse anesthetists who were able to handle all surgical demands at the location.
During this time period, Gerry had a full-time job as the Chief CRNA at Lane Regional Medical Center in Zachary, Louisiana. When Lane had an opening for a nurse anesthetist in December 2007, John Sikes ended his staffing contract in Baton Rouge and filled the role at Lane. John and Gerry worked side-by-side on contract opportunities in the Baton Rouge area. When John started as an independent contractor for Lane, the hospital had their own in-house anesthesia team and did their own anesthesia billing. As employees moved on to other opportunities, other DPI teammates would come and fill the employment void at the hospital.
As DPI became more involved with the Lane, the hospital was making their own moves towards growth. The hospital built to a 3-story building MOB on campus and they expanded their GI services. Simultaneously with all these transitions, the DPI team was able to show the hospital the value of transitioning DPI to a full fee-for-service contract in 2010. The new agreement paved the way for Gerry to have more of a business role within DPI and ultimately make him a partner, again proving that the relationships the company had led them to success.
Early in 2009, the former administrator at HealthSouth was in a similar role at the Advanced Surgery Center in Baton Rouge. Unhappy with the lack of flexibility with their anesthesia partner, the ASC contracted with DPI to provide anesthesia management services to their facility. Once again, DPI was able to provide top-notch service and flexibility at a minimal cost.
In looking back at the history of DPI, the company became very successful quickly with their staffing model, but just as quickly, the company had to rebuild itself from the ground up. At the end of 2007, in the downside of their business cycle, DPI was without staff, and had essentially struggled to find work. By the end of 2009, DPI was up and running again with two surgery centers and a hospital. The company was flourishing. The resurgent success stemmed from relationships, passion for the craft and sheer perseverance. This was a dynamic time for anesthesia management companies like DPI. Venture capitalists and private equity companies were aware of the cash flow of these types of companies and were rapidly making acquisitions. Now that DPI was doing well and serving strong contracts, they had another decision to make: to continue growing or be satisfied with their current book of business.