The Center for Autism and Related Disorders (CARD) is now back under the leadership of its founder and former CEO.
Doreen Granpeesheh and her business partner Sangam Pant acquired CARD out of bankruptcy in a deal involving a consortium made up of PE firm Audax Group and its portfolio companies. The deal — approved by a judge at the end of July and valued at about $48.5 million — closed at the end of August.
Now that she owns the company, Granpeesheh will take over its daily management as CEO, reversing her career trajectory. When Granpeesheh sold the company to investment titan Blackstone in 2018, she planned to hand over the reins to another CEO, taking on a board role and slowing down, she explained on the latest episode of the Behavioral Health Business Perspectives podcast.
But then COVID hit. And she became a nearly constant advisor to the company’s new leadership as it navigated the historic crisis. Ultimately, she stepped away from her board role as the company stumbled under the pressures triggered by the pandemic.
She would have done several things differently in navigating the challenges brought about by COVID. She also details how she plans to navigate the still-relevant pressures that put CARD into bankruptcy in the first place.
As a new company — Pantogran LLC now owns CARD — Granpeesheh shared her insights on where the company came from and where she will take it now that she is back at the helm.
Highlights from the conversation are below, edited for length and clarity. Subscribe to BHB Perspectives to be notified when new episodes are released.
BHB: From a business perspective, why did you see the company growing as large as it eventually did? And what did you see that made you think it would be something that could be really big and successful?
Granpeesheh: I started treating children coming out of UCLA (University of California, Los Angeles). UCLA’s clinic was very small and research-oriented. The patients who wanted ongoing therapy moved over to my new practice with me.
It was a very small operation. I did everything: hiring therapists, training them, billing patients for them, seeing the patients, record writing, everything. A few of the parents whose children had done very well started writing books about the interventions. Lots of parents started reaching out to me from different parts of the country, requesting that I come and open a clinic where they were. Parents asked me to start clinics there. I told them if they could get about 20 or 25 patients, it would be feasible for me to come out there and open a clinic. It started gradually, and then I started opening more clinics and building the company’s infrastructure.
If you were to pick a year or a narrow range of years that really were key for the accelerated growth of the company, what would those years be?
I’d say they would be from 2015 to 2017. We had figured out the formula; let’s put it that way. We had a very good system in place to scale up. Those were very key.
At that time, you were meeting very high demand driven by increased sensitivity to autism as a condition; the rate of autism diagnostics had skyrocketed between the time you started CARD and those years. But in 2018, Blackstone announced it would acquire CARD. Was that the first time the company engaged with outside investors?
I never had any kind of outside funding. I managed the company pretty closely, I would say. We would raise funds through revenue and allocate them to further growth or research. We were always able to reinvest. What happened was that we had opened over 150 or so clinics during those last couple of years, from 2016 and 2017.
These clinics were great. They had the infrastructure, and they were doing well. But it was getting to the point where it was very difficult to manage. We were exhausted. We had been working very long hours and very hard for many years now. Sangam and I as well as our core leadership team — which was predominantly clinicians — felt that if we got to 300 clinics, we would be holding the company back because we don’t have enough span. We can’t expand more and keep it under control.
We all felt that bringing in an investor like Blackstone might help us expand. That was the whole reason for this. I had been approached by a variety of investors all the way back to the early 2000s. I was never interested because I saw the path and wanted to stay on the path.
Around 2017 or so, it had gotten to the point where the private equity industry had entered our field. So, other providers were growing through acquisition faster than we were. I felt that we needed help expanding beyond this number.
The pandemic was cited as a major impetus for the bankruptcy proceeding. What was it about the pandemic that was ultimately so disruptive? There was a time when people were under these strict mandates. But that was only a couple of months, and then people started to make their reentry back into normal life.
There were a few other things. People point to the debt. But we didn’t bring on debt immediately [as part of the Blackstone investment]. It wasn’t just the debt. The company was really healthy before COVID. But there was a slight imbalance of expenses and revenue. That tends to happen when you bring in large infrastructure all at once.
The difference was that over the years that we were building CARD, it was a very gradual process of adding expensive things, whether it was new leadership that needed to have higher compensation or a new electronic health record that cost us a lot — whatever it was, it was all gradual.
Coupled that [sudden growth in expenses] with the reduced revenue resulting from the initial hit from COVID with a new management team … all of that together is what caused CARD to struggle.
One of the things that I disagreed with or would do differently, personally, is centers were shut down because they were just struggling with cutting costs. The way that we would have operated in the past would have been to go in and try to figure out why they’re struggling, and see if we can help them and see if we can turn things around.
Now that you have the company back and you’re going to take over as CEO, how will you run it differently and make sure that it doesn’t run into the same issues that we’ve already talked about that led to the bankruptcy?
We started engaging on this after the bankruptcy auction in mid-July. We divided up the costs among the management team. Sangam took over all vendor agreements and started renegotiating and reducing costs on those. An organization the size of CARD had hundreds of vendor contracts. A lot of those contracts were honestly too big for the size of the company that it is now. In a short period of time, we negotiated a lot of those contracts, including payer contracts.
I started working on employment and getting employees back in. I had a couple of weeks to rehire as many employees that we want to keep as possible. As we were doing this, our goal was to bring in as many savings as we could. Sangam and I taking over allowed us to make the hierarchy more flat. A lot of the costs were associated with the top level of the company. We were able to make that a lot less.
We’re starting out with a much more lean company. That’s the answer. We have to keep the company lean, go back to taking care of our patients and staff and also pay attention to the business. That essentially means going back to not outsourcing every single function. Keeping cost at the forefront and managing the books a little more carefully will be in mind when taking care of patients and staff.
Over the last few years, CARD started to restrict its patients to younger children because it aimed to focus on early intervention. I’m not going to do that; we’ve changed that. We’re going to have clinics for all patients of all ages.