Small business: Prescription for growth

Like most family physicians, Dr. Todd Stivland was used to people dropping everything to take his phone calls.

Stivland the entrepreneur, however, had a different experience making cold calls after launching Bluestone Physician Services, which offers on-site medical care to frail elderly and special-needs residents in assisted living centers, group homes and memory-care facilities.

"It was a little humbling to have people not return messages and not take phone calls or think I was crazy," said Stivland, who started Bluestone from a desk in his dining room in 2006. "When you're a physician you don't have the same thick skin that salespeople have. I have a lot of respect for them after doing that."

Fortunately for Stivland, the cold-calling days of his first year in business are long gone. Now he gets calls from facilities in other states eager to bring in Bluestone.

Today the company is the largest provider of residential-based care in the Twin Cities, with doctors, nurse practitioners and physician assistants regularly visiting thousands of patients in the Twin Cities.

Bluestone, which has 110 employees, has teams in Duluth, St. Cloud and Mankato and Wisconsin, where it expanded earlier this year. Revenue this year will reach $14 million, Stivland projected, up from $10 million last year. The only constraint on growth has been hiring enough doctors to keep up with demand. He said he's turned down multiple offers to invest in the company, which has its headquarters in Stillwater.

The company got an early boost from its low overhead, newly available electronic medical records and Medicare billing codes that allow greater payments for home visits and office calls, Stivland said. Bluestone's growth prompted Stivland to make the difficult decision last year to turn his practice over to a company physician so he could concentrate on his role as CEO.

"Pretty much unanimously, they said we're doing something important, this is a national issue and if we just stay in 'flyover' land, we're not going to make the change we could if we expanded," Stivland said.

That consensus reflects critical elements of Bluestone's culture, including the company's mission-driven focus and the passion of its employees, Stivland said. The company also trusts employees to do their jobs and to decide how and when to do them.

"People become more productive, more engaged and more willing to work when you treat them that way than if you try to manage everything they do," Stivland said.

Employees have responded positively, with Bluestone ranking fourth among 40 small companies based on their feedback in the Star Tribune's 2014 Top Workplaces survey.

Stivland launched Bluestone in 2006 after he and his family returned to the Twin Cities from Duluth, where he had worked for 12 years for a large health care system. On-site care, he said, helps avoid the confusion and anxiety that he often saw frail elderly and special-needs patients go through when they visited a clinic, as well as the difficulties family members often have in getting them there and back.

Those visits, and on-site lab tests, X-rays and ultrasound imaging that also are available, enable Bluestone's teams to take care of problems "before they become crises," Stivland said. Those include what he said were the three most common causes of hospital admissions for the company's patients, whose average age is 87: bladder infections, falls and constipation. Bluestone's efforts, Stivland said, have reduced emergency room and hospital admissions among such patients by 80 percent or more.

Brenda Gammelgaard, marketing director at Rose Arbor & Wildflower Lodge, which offers assisted living and memory care in Maple Grove, said having Bluestone Physician Services visit was a competitive advantage until other facilities also brought them in.

"It's OK, though, the good news is it's helping the people that need the help," Gammelgaard said. "[Stivland is] just a real caring, compassionate man. The folks that he's hired, it's in their hearts, too. It's that caring and compassionate attention that makes a difference."

The expert says: Jack Militello, management professor and academic director of the health care MBA program at the University of St. Thomas' Opus College of Business, said what Stivland is doing with Bluestone is interesting both as a business and as an effort to change health care delivery, something many larger organizations are trying to do.

"End-of-life stuff is stressful enough; let's make it easier on people," Militello said. "That's what appealed to me about this. It's a good business deal, but it's also human."