From his first apartment-based business to running one of the largest emergency medicine management companies in the nation, Dr. Kip Schumacher embodies the entrepreneurial spirit of Acadiana.
If you could step back in time to the summer of 1971 at the iconic Evangeline Maid Bakery in Lafayette, you would likely see a uniformed, 18-year-old kid standing on the roof with a hunting rifle. That was what a security detail looked like some 38 years ago. To be more specific, that’s what William C. Schumacher, known then and now simply as “Kip,” or more formally Dr. Schumacher, looked like in that bygone era. It was his very first job, so long ago, in fact, that the mention of it stirred forgotten memories and a tidal wave of deep-belly laughs. “What was I looking for up there? I was looking for peace and quiet and a way to pay for school,” Schumacher says chuckling. “Can you believe I was up there with a rifle? That was long before they had risk managers.”
But Schumacher wasn’t destined for the roof of the bakery. Deep down inside in his soul, there was a spark. Anyone who has ever run his own business or sought to control his own destiny knows all about the spark. As soon as you pay it attention and give into its pull, it transforms into a raging fire that’s difficult to extinguish. While there are many ways to describe entrepreneurial spirit, this is possibly the best vignette to apply to Schumacher. It wasn’t long before he turned in his security uniform and rifle and went out on his own. Surprisingly enough, his first startup was a handmade jewelry business. “By that time I was in medical school, and I was using the jewelry business as a way to pay tuition,” he says. “I was making jewelry out of brass, silver and gold wire, and sales really started picking up.”
Abdalla’s, at one-time Acadiana’s local retail giant, took an interest in Schumacher’s jewelry. What had started as a quaint, artistic gig quickly turned into a serious small business. “After I had the support of Barbara Abdalla, we started selling in art shows all over the South. We really had to crank things up. I had five employees and an apartment and basically converted the whole operation into a sweat shop,” says Schumacher, letting loose again one of his trademark laughs. “Those were the good old days.”
But graduation day eventually came and Schumacher had achieved his long-standing goal of becoming a doctor. The raw materials he used for his jewelry business were boxed up, and he started along a path that would truly be his destiny. The first time he put on a white coat was at Opelousas General. That’s where he cut his proverbial teeth and, being board-certified in emergency medicine, he was thrown into the deep end of the pool and expected to swim immediately. And swim he did, in the fast-paced, ever-changing stressful environment of the ER. Yet it was a unique environment that allowed Schumacher to thrive. “Back then, it was quiet enough and the volume was low [enough] that I really got to spend quality time with the nurses and patients and administrators and other doctors. We were only seeing maybe 400 or 500 patients each month, so there was time to sit around and do that. There was time to communicate,” he says. “I learned that quality care isn’t about writing the right prescription or ordering the right tests. It was about convincing people that they’re part of a team, from patient to nurse and everyone else, all working together to provide the best health care possible.”
That was when the seeds for the Schumacher Group, now 15 tears in operation, were first planted. “If you want good things to happen, I quickly realized that everyone has to work together. We’re talking about team integration here. It’s communicating directly with all the stakeholders and making sure everyone feels respected,” Schumacher says. “It’s about the family and the ward clerk and the nurses and everyone else sharing information instead of one doctor saying, ‘Do this because I told you so.’”
If there’s a CliffsNotes version of what the Schumacher Group does, that’s it in a nutshell. The company goes into a hospital’s emergency room and streamlines operations, from creating an electronic database for medical records to improving communications between stakeholders. During a time when emergency rooms are being overrun by patients and understaffed by nurses, the Schumacher Group is there to jump directly into the fray to help with scheduling, recruitment, leadership, quality improvement and patient satisfaction. Today, the company is operating in 19 states, assists some 2.7 million patients annually and is the third largest emergency medicine management outfit in the nation – arguably the fastest-growing as well.
Dr. Kip Schumacher says no IPO is in the works: “We don’t want investors influencing how we deliver health care services.”
Photo by Robin May
THE MAN BEHIND THE PLAN
If you spend any amount of time with Dr. Schumacher (“Call me Kip”), you wouldn’t guess that he’s sitting on what amounts to a corporate empire. He’s chosen to stay close to humble beginnings in Lafayette, and made a conscious decision to keep his headquarters here, too. Although he’s clearly a driven man with countless balls in the air, Schumacher also thrives from personal relationships; he draws you into conversations, makes eye contact and is far from the stoic figure many associate with captains of industry. He also seems to have as much confidence, although not in an egotistic way, in himself as he does his workforce.
Tyron Picard, Acadian Ambulance’s executive vice president of governmental affairs, is a longtime friend and can attest to Schumacher’s unique personality — both in the boardroom and out. “Kip is a very focused businessperson,” Picard says. “I’m also close to a number of his executives, and I know that he is very strategic in his thinking, very empowering as a CEO in terms of not micromanaging his key executives, and he shuns the spotlight. When I think about Kip, the phrase ‘mind your knitting’ comes to mind. He has kept the mission of the Schumacher Group, which is the best at what it does, very clear and uncluttered, and has not allowed it to be distracted into businesses outside of its core competencies.”
In fact, the focus Schumacher places on his overall mission and the well-being of his employees are two key reasons he has succeeded, says Karen Reynolds, the company’s senior vice president of patient services. And she should know. Reynolds was at Schumacher’s side during the Opelousas General days. They shared the same vision of an emergency room that could operate with compassion and improve based on enhanced communications. Schumacher recalls that they would often look at each other and say, “This can be done better, and we can go out in the industry and tell people how to do it.” For his part, Schumacher calls her a “true believer.”
Reynolds has remained by Schumacher’s side. She’s seen the company transform into one the best places to work in the region — there have been many articles published on that theme alone — and is impressed as anyone by the profit-sharing opportunities and quarterly discussion groups meant to better the work environment. “Kip is a visionary and he is devoted to what he does,” Reynolds says. “And he’s dedicated. He sticks to his mission, and he doesn’t divert from that.”
Make no mistake: at the core of Schumacher’s mission, and the thrust behind his vision, is that entrepreneurial spirit. Even when he started the company back in 1994, Schumacher shunned the traditional business model of using outside investors. Instead, he says “sweat equity” built the Schumacher Group. The company did take out a loan five years ago to help it grow, but it was quickly repaid. “We have a clear run without incumbencies,” Schumacher says.
Still, that hasn’t stopped the gossip mill from turning out rumors every now and then about a possible sale or initial public offering. Schumacher says he has no interest in either avenue. Just last week, he went up to New York to attend a convention and take meetings with JP Morgan and others in the financial market just to “control any rumors that are out there” and to “keep my hat in the ring for mergers and acquisitions in the future.” But aside from that groundwork for a future that may never come, Schumacher insists he isn’t making any moves to go public. “There are a lot of people who have tried to convince us to go public over the years, but that isn’t part of our strategy,” he says. “We don’t want investors influencing how we deliver health care services.”
Dr. Kip Schumacher and his executive assistant, Bonnie Bouillion
Photo by Robin May
REACHING FOR NEW HEIGHTS
If there’s anything Schumacher enjoys doing more than growing his business, it’s traveling with his family. And we aren’t talking the traditional beach vacations here. Along with his children, Schumacher has hiked Glacier National Park, trekked across Africa on safaris and even climbed Mount Kilimanjaro. “I think it’s important for kids to learn what a small world it really is,” Schumacher said. “I think maybe next year we may go to Japan and Mount Fuji.”
International travel also allows Schumacher to get a glimpse at other health care systems around the globe. “I was in Ireland last year and talked to a lot of people in the pubs about access to health care. I did the same thing in Tanzania and Argentina,” he says. “The one thing I’ve learned everywhere I’ve went is that the U.S. really has a great health care system, and people just don’t appreciate it.”
Bud Barrow, CEO of Our Lady of Lourdes, says that kind of adventurous character spills over into Schumacher’s professional life as well. “He’s a driven person and never satisfied with the status quo. He’s extraordinarily bright and passionate about progress and health care,” Barrow says. “But most of all, I think he’s frontier-seeking, which is something that’s unusual in today’s business climate. He’s always looking for that new mountain to climb in business, that new opportunity to undertake, all in an effort to make a difference.”
Nowhere else is that better exemplified in the Schumacher Group than in its information technology department. Among other honors, the Schumacher Group has been named “Innovator of the Year” by the Louisiana Governor’s Technology Awards Committee. “Our investments in technology have been driven by our principles to focus on delivering quality patient care and providing our physicians and hospital clients the tools necessary to provide such care,” Schumacher says.
While it might sound a touch like technological jibber-jabber, it’s actually an important aspect of the Schumacher Group’s success. For instance, the company has implemented electronic medical records at more than 40 hospitals around the country. Electronic records have been a buzz phrase in the industry for years, but few hospitals have been able to tackle the task efficiently due to the complexities involved. Such a health information system allows for storage, retrieval and manipulation of records in the blink of an eye and can often be the difference between great care and just standard care.
Unfortunately, only about a quarter of office-based physicians are using electronic medical record systems, according to the National Center for Health Statistics, and less than 10 percent of those have a fully-integrated system. The Schumacher Group has simplified the process by doing everything in-house, from software development to training. “We’ve invested heavily in information technology, and that department now has 50 people working in it. Plus, we’re about to hire six new process engineers,” Schumacher says. “We help hospitals pick the right kind of system, we help them implement it, and we help them conduct training.”
In this vein, Schumacher says the key to the success of his company has been a focus on putting systems in place to get information directly into the hands of those who impact patient care. Electronic medical records are just one example, but it’s indicative of the company’s mission to help physicians — not just managers — understand that new policies and procedures can help them locate where improvements need to be made. Even the company’s forms for feedback from patients and other stockholders have gone electronic. “The instant charts are coded and analytics are extracted, information is immediately available for distribution to Schumacher Group employees, individual doctors and medical directors,” Schumacher says. “The feedback is available in a matter of a few days versus a matter of weeks, months or years.”
The Schumacher Group also believes in the evolution of human resources as well. For example, the company created the position of “patient resolution manager” this summer. The role is a new one, created for a registered nurse or licensed practical nurse with emergency department experience to head up company-wide management of patient issues and follow up. Previously, patient issues were handled in more decentralized fashion, primarily through the company’s regional nurse liaisons. The job of the new patient resolution manager, however, is to assure that all patient complaints are followed up within 24 to 72 hours using a process that relies more on standardized policies and procedures; enhanced reporting mechanisms; and better communications.
AN EYE TO THE FUTURE
On the horizon, Schumacher and his team are keeping tabs on President Barack Obama’s proposed health care plan, as well as cuts to Medicaid. That extra attention, however, seems to be more out of interest and staying up-to-date with current affairs. “I don’t think it really matters what policy changes go into effect in the long term,” Schumacher says. “The more patients that would be covered under the proposed system, the more services that will be required. They’ll all be trying to get appointments with local doctors, and they won’t be able to get in to see them because there will be so many people vying for attention. I think what’s going to happen is even more people are going to show up in our emergency rooms. And that’s sad.”
Federal and state government advocacy are important to the Schumacher Group. From the CEO all the way down to RNs, the Schumacher Group is actively involved on many fronts to positively impact its patients, physicians, partners and the industry at large. Schumacher says the company monitors and attempts to influence legislative and regulatory changes on the state and federal level, from patient safety and disaster response to reimbursement and professional liability. As such, the company’s employees are members of various committees within the American College of Emergency Physicians and the Emergency Department Practice Management Association. In fact, Schumacher himself co-founded the national trade association known as the Emergency Department Practice Management Association, or EDPM, in 1997.
The Schumacher Group also provides a forum for its clients and providers, what Schumacher calls “emergency medicine activism at a mouse click.” Through what’s known as “The Provider Portal,” these stakeholders have a quick and easy means for voicing their position on current federal and state legislation and related issues. The site provides a one-stop shop to monitor current bills impacting patients and systems, and allows stakeholders to impact these issues with a click of their mouse. This online action tool can quickly execute a pre-drafted letter and empowers providers, as well as Schumacher Group employees, to submit by e-mail, mail or fax a missive in support or opposition of a particular legislative issue. The instrument also allows them to craft their own letters to their legislators.
Right now, it’s difficult not to argue that Obama’s health care plan is the hottest issue going. But Schumacher has seen stressful national politics before, and he doesn’t get swept into all the hype. “When I look at what could hurt us, it’s just a short-time change,” he says. “So if I was only looking at it from the short term, then I’d have heartburn and wouldn’t sleep at night. But I’m not looking at it that way. I think our service is so valuable that we’ll always have a role to fill.”
The future looks so bright to Schumacher that expansion plans for 2010 are already under way. The company is planning on increasing its number of employees from 700 to 750; growing revenues from $390 million to $450 million; adding 18 new facilities to its current tally of 152; and will see some 3 million patients next year, up 300,000 from the current year. “We’re also going to be looking into expanding into the Great Lakes area as well,” Schumacher says.
It’s a long way from making jewelry in his apartment office and miles away from sitting on the roof of the Evangeline Maid Bakery. But Schumacher remembers those days fondly. After all, he wouldn’t be where he is today if it weren’t for those early experiences. He also wouldn’t be heading into a promising future without that foundation. And he does plan on being a part of that exciting future, no matter what rumors you might hear about acquisitions or going public. “Why would I get out now?” Schumacher asks laughing. “I’m having too much fun.”
[Editor’s Note: Since its inception Acadiana Business has profiled several entrepreneurs for this annual issue; after this year’s nominations were in, we decided to single out Dr. Kip Schumacher of the Schumacher Group as Entrepreneur of the Year. Based on annual revenues, earlier this year the Schumacher Group earned the No. 3 position on our list of the top 50 privately held companies in Acadiana, behind two long-established corporate entities, Stuller Inc. and Frank’s Casing Crew & Rental Tools. The Schumacher Group is now on track to take the lead as the largest privately held company in this region, though we hope the competition remains fierce. In October Fortune Small Business magazine ranked Lafayette among the top 50 best cities in the country to launch a business. In the mid-size communities category, Lafayette was No. 2, behind Huntsville, Ala. “Growing economies, affordable workers, stable housing markets, low crime — these metro areas have all the features entrepreneurs need to thrive,” the editors wrote. The Schumacher Group’s story is one of true entrepreneurial professionalism, one we hope will inspire the next generation of business men and women willing to take risks. Our economy depends on it.]