Published in Medaille Magazine, Summer 2010 issue, p. 22-23

Magazine Feature: The Business and Science of Sleep

For someone who helped to found a company out of his basement, the story of Scott Blodgett ‘10 BBA and his business, Sleep Insights Management Services, LLC, is that of the quintessential entrepreneur. Now serving as chief operating officer, Blodgett has worked to expand and adapt his company since its inception in 2005.

Having started as a technologist at the Strong Epilepsy Center at the University at Rochester Medical Center, Blodgett had extensive experience in the clinical side of seizure monitoring. At a personal and professional level, he faced some frustrations. “With universities being the way they are, unless someone above you . . . moves away, there’s no upward movement,” says Blodgett. “And, while patient care is good, it’s not great. Patients are more numbers than people, and it’s all about getting people through the system.”

Through that frustration, Blodgett and his business partner, Dr. Kenneth Plotkin, sensed an opportunity. “We wanted to focus a health-care business that was patient-centered,” he shares. “Like any other small business, we scraped together money and started to piece together a business. Our original business model was to diagnose and treat patients with sleep disorders – neurological and pulmonary.”

“We started off working out of our basements at our homes, and after a few weeks, we found temporary office space,” says Blodgett. From there, the pair coordinated the transformation of a “concrete shell” into a modern and “luxurious” sleep center at Sleep Insights Medical Services, PLLC, learning along the way practical elements of starting a business – from construction to negotiating leases – all without formal business training.

“The field of sleep medicine was exploding at the time we opened,” explains Blodgett. “Rochester was underserved, with roughly half the beds that were needed. Our four-bed center hit capacity quickly, and we saw our wait times grow.”

In the absence of the detailed business plans that some entrepreneurs swear by, Blodgett observes, “We built a house without a foundation. We had a great-looking house, but there wasn’t a lot of structure, I was missing a formal business education.” He continues, “You need a little skill, a little guts, and a little luck. You shake it up and come out with a product. What I’ve learned through education at Medaille, and through the school of hard knocks has helped me to be a good leader.”

Taking into account certain regulatory issues, the original Sleep Insights Medical Services, PLLC spun off a second company, Sleep Insights Management Services, LLC, to help with expansion. In tandem with that action, the team brought in a third business partner, Jeffrey Dann, a CPA and medical management executive with years of entrepreneurial healthcare experience.

In the face of changes to the sleep medicine field, “About six to eight months ago, we had to throw out the playbook and rewrite it to include home sleep testing,” he says. “With a $300-400K investment in each of our sleep centers, the overhead is huge, and we decided as a company that instead of fighting it, we’d embrace it.”

With 38 full-time employees, including four physicians and two nurse-practitioners, the company now serves about 750 patients each month, with approximately $9 million in yearly sales. Having expanded from that single location to four sleep centers in the Rochester area, Sleep Insights Management Services, LLC, and its related Sleep Therapy service, the company is now poised to reach a national market.

“Sleep issues are linked to other medical problems; if we can treat patients with sleep apnea, we can lower blood pressure, and increase metabolism to promote weight loss,” he explains. “We only see a fraction of the patients who need it. We’ve launched a national campaign where we’re going from four fixed centers to a fifth in Oswego (NY), and coming up with many state and regional areas where we’re doing home studies and collaborating as care facilitators.” He continues, “We’ve taken hold of the business to collaborate with other partners; we’re their outsourced specialists.”