In this article, we interview Charles Haberkern. Charles is a successful serial entrepreneur who has built up one of the top ten largest rheumatology practices in the U.S. We dive into his journey as an entrepreneur and how he turned around a large healthcare company at the age of 26.
Let’s start all the way back. So you were in high school, and I understand you started working right off the bat. Can you tell us more about your background?
I started working when I was 16 and ended up working for a gentleman who was an entrepreneur. At 18, I was managing a store for him and had more money than I knew what to spend. I had a brand new Camaro, and I bought it right off the showroom floor, and I thought, Wow, life is good.
I then enlisted in the army and spent three years serving my country. In less than a year and a half, I was promoted to sergeant. I was in charge of a 25-man unit at Fort Lewis, Washington. After that, I was sent to Germany for a year to serve as the section chief for a nuclear missile unit.
While I was in the army, I started taking college classes. When I got out, I went straight to college and graduated four years later. I didn’t want to be a CPA because I didn’t want to see what happened after the fact, but I figured if I knew the numbers, I’d be able to get a job.
After earning my degree in accounting, I landed my first job. The company hired eight accountants. Out of the eight, I was the first to get promoted to a department manager position, and then I ended up being the credit manager for a $40 million company two years out of college.
What industry was that company in?
It was an agriculture company that owned about 25,000 acres of land. I learned quite a bit while there—everything from annual crops to almonds, pistachios, and more.
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So, if you started out in the agriculture industry, how did you end up in healthcare?
A friend of mine was a partner in a CPA firm and came to me and asked if I would like to change jobs?
I said, well, it depends. Will I make more money? He said, most probably; however it was in healthcare. I agreed and went for the interview with the doctor that owned the business. This doctor was unbelievably successful; he was already a multi-millionaire when I first met him. After the interview, for a few weeks, the doctor and his director would ask me questions about what I would do in this and that situation. So after about three weeks, I figured out that he was asking me these questions so he could fix the problems he was facing in his medical group. I got fed up and told my friend that he either hires me or I’m done. They ended up giving me an offer.
How old were you at this point?
Maybe 26. So the hospital’s owner made me an offer, and it was like $10,000 too low. I said no thanks. I gave them what I wanted. They called and said, sorry, we can’t pay you that much. Later that day, they offered me what I wanted, which was how I started in healthcare.
How did you manage to run two 40,000-square-foot medical buildings at age 26?
When I arrived, I realized that the owner was making so much money that he didn’t even realize that his healthcare business was poorly run. I mean, we had eight reception areas. The receptionist was stealing co-pays. One receptionist was stealing $100 a day. And it was just it was a madhouse. So I just started fixing things, and I was stepping on the toes of the administrator.
So I started firing people, reconciling all the reception areas daily, and making them sign before they put it in the safe. I think in the first two or three months, I fired 30 or 35 people. Surprisingly the morale went up because before, people were doing other people’s jobs because there were horrible people working there. After I fired the 30-35 people, I saved over $1,000,000 in salary and benefits. I then gave out like $300,000 in raises to get everybody paid comparably.
So this upset the administrator there. She called the owner, and he came up from L.A.
Well, the owner came into town yelling and screaming, and he was a yeller and screamer. So I’m in a meeting with him and the administrator, in a big conference room. He said, what the heck are you doing? You know, you can’t do this. You know, you gave $300,000 in raises.
I said, Yes, I did. All my paperwork was in order, the administrator didn’t know about that. I said, But I also saved you over $1,000,000. What are you talking about? So I showed him everything, and he looked at the administrator and said, Katherine, Charles is now the senior V.P. of operations, and you report to him.
This guy ended up owning medical groups and taking full-risk contracts all over California, Texas, Florida, and New York. He’s semi-retired now, but he is just an amazing person, and I learned so much in health care from him.
See the full interview here -> https://youtu.be/5Fi_XlCik_M
