. . . And In Health

Despite an industry upheaval and two gravely ill sons, this health-care entrepreneur discovered the prescription for perseverance.

It was early 1996, just months after he and his wife, Jacquelyn, founded their contract rehabilitation company, Achievement Therapy Professionals (ATP) Inc., when Ted Langdon first heard rumblings that times, they were a changin' (in the health-care industry, that is). Hearsay trickling down the grapevine of home-health and rehabilitation providers pointed to the inevitable: President Clinton's Balanced Budget Act of 1997 would cut back on Medicare, not only bringing about a cap on outpatient rehabilitation services, but also lowering per-visit costs to Medicare-based home-health agencies, hospitals and skilled nursing facilities.

Sadly, looming business woes were the least of the Langdons' worries that year. In the summer of 1996, at age three, their son Spencer-twin brother of Tyler-was diagnosed with leukemia, warranting three years of chemotherapy and approximately $1,000 worth of medication each month. Faced with circumstances that would obliterate the future goals of most, the Langdons didn't fold, but instead expanded ATP's services to override the Medicare massacre.

Making ATP a "one-stop shop" by adding outpatient rehab to its services was the ultimate goal, but first the Langdons had to move the company out of their Carrboro, North Carolina, home (situated in a bedroom, no less) and into a Hillsborough, North Carolina, office complex. To Ted, outpatient was ATP's salvation. "I really started seeing the effects [of the Balanced Budget Act] in 1997," says Ted, 33. "Medicare-based agencies were laying off staff, and the first people to go were with contract companies." If they didn't go out of business or merge with other corporations, agencies drastically reduced their pay rates to contract companies, lowering the therapists' wages. Some just didn't pay at all-like House Calls, a statewide home-health agency in North Carolina whose owner was nabbed for allegedly double-billing his way to Medicare/Medicaid fraud in 1997. "I tried everything I could to retrieve [the $14,000 House Calls owed], but they were sued by everyone," says Ted. "They had everything frozen, and I was so far down on the lawsuit list that, basically, I never got paid."

Now when you're a national chain of rehab clinics, a less-than-$10,000 loss might cause a dent in operations. But when the two-year-old business you bootstrapped using savings, a couple credit cards and retirement money is hit with that kind of blow-and you're paying for your son's chemotherapy treatments-believe Ted Langdon, it hurts. "The banks sure wouldn't loan us any money," he remembers. "It's a service company, and the profit margins are too narrow." And don't forget the risk factor amid all the health-care reforms. It may have taken a year to fully recover, but by injecting his own capital-earnings he'd saved from the six-figure salary he made working, sometimes seven days a week, as a licensed physical therapist assistant prior to starting ATP-he dug himself out of the hole.

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This article was originally published in the April 2000 print edition of Entrepreneur with the headline: . . . And In Health.

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