LEARNING CURVE: COLBYCARE NURSES : Nurses Network : Health Agencies Merge to Compete

After running her own home-health agency for eight years, ColbyCare Nurses founder Carolyn Colby realized she was losing business to bigger companies that had offices throughout the state. So she founded the National Independent Nursing Network with other small agencies to compete for contracts from managed-care providers. Colby was interviewed by Karen Kaplan.

It’s difficult for home-health agencies to exist alone because the large managed-care organizations are looking for agencies that can take care of patients throughout the state. Companies told me they couldn’t contract with ColbyCare because we were a just local agency and they needed someone with a presence in Northern California and in rural areas. A lot of my large competitors were able to do this because they had multiple branches.

So I teamed up with owners of other home-health agencies and we founded the National Independent Nursing Network in July 1994. We’re a preferred provider organization composed of 34 independent home-health agencies from different parts of California.

We’re all entrepreneurs and independent women. When we saw that the market was shrinking, we said, “Let’s do something proactive and maintain our share of the market.�

It has been a lot more complicated and time-consuming than I expected. It’s taken us a whole year just to get things off the ground. We had to incorporate, develop contracts, make brochures and marketing materials and come up with a logo--all that kind of stuff.

We’re all used to being the bosses of our own companies, and we’re all strong women. So what would normally take me 15 minutes to do myself ended up requiring a lot of discussion and compromise because we are all pretty independent. Even though we’re all in the same business, the way we do business is totally different.

We decided to hire an executive director, and that took a lot of thought and consideration. Then we had to agree on how much we were going to pay and what benefits to offer.

I did not realize how much time I would have to devote to the network. I had anticipated meeting every other month for four hours, but it’s been more like two or three days each month. When you factor in the cost of flying to our headquarters in Sacramento and the time and energy I spend there, that’s a big commitment.

We just started going after HMOs and other potential clients in June. So far the network has landed five contracts. That only increases my business 1% so far, but we just got started. I think eventually I’ll see a 25% increase due to contracts from the network.

The other advantage of being in a network is having people to share ideas with. Not having to rely solely on your own brain every once in awhile is great. It’s really helped me in my business. They give me suggestions of different ways to approach a problem.

On creating one’s own opportunities . . .

“We’re all entrepreneurs and independent women. When we saw that the market was shrinking, we said, ‘Let’s do something proactive and maintain our share of the market.’ �

On working with other business owners . . .

“It has been a lot more complicated and time- consuming than I expected. . . . What would normally take me 15 minutes to do myself ended up requiring a lot of discussion and compromise because we are all independent.�

On the side benefits of forming a network . . .

“The other advantage of being in a network is having people to share ideas with. . . . It’s really helped me in my business.�

AT A GLANCE

Company: ColbyCare Nurses Inc.

Owner: Carolyn Colby

Nature of business: Home-health-care agency serving children and adults

Location: Culver City

Number of employees: 50 full-time nurses and support staff, plus 160 part-time nurses

Number of clients: 400

Annual sales: $3.8 million