How do you view change?

Mike Mallaro
CFO and chief information officer of The VGM Group

Blockbuster Video got outflanked by competitors who found a way to give customers cheaper, more convenient movie rentals. Reading is thriving, yet bookseller Borders died after narrowly defining its business as physical books sold from stores. Kodak forgot it was selling the preservation of memories, not film. Technology made booking travel easy, squeezing out travel agents who didn’t provide value-added insight and trust. 

These are just a few of the many cases of recent business failures driven by inability or unwillingness to change. Change is messy, chaotic and uncomfortable. But it marches on, unstoppable and inevitable. Are you a dealer of oxygen concentrators and bent metal? Or are you a healthcare professional offering people effective solutions to their healthcare needs outside of institutions?

Healthcare needs of the frail elderly and people with chronic health conditions are growing exponentially. The aging of America, an obesity epidemic, broader insurance coverage, new technology and excessive spending on the institutionalization of the aged are all driving huge increases for solutions that you are, or could be, providing. There are 2 million people on oxygen today, double the number from 1998, and that number will double again over the next 10 years. There has been a staggering growth in power mobility users during the past decade, driven by greater consumer awareness. Smart money expects that growth to continue.  One in three people over 55 suffers from chronic pain. More than 30 million Americans suffer from sleep apnea, but have never been tested or treated. One-third of seniors live in their homes, alone. Most of those homes desperately need modifications to be safe and comfortable, given the limitations of the aging resident. Hospitals face daunting new mandates to keep people at home and avoid re-admission. Advancing technology is exploding onto the scene with breakthroughs ranging from nutraceuticals to pain relief to remote monitoring. Organizations providing quality healthcare solutions that improve quality of life and can be executed at a cost less than the value provided will win.

We must also deal with other, perhaps stark, realities. Traditional payers are going to pay less for each unit of health care. With or without competitive bidding, reimbursement rates are going down significantly. Insurers are concentrating their power at a frightening pace, which is bad for all of us. Inadequate business fundamentals are plaguing many healthcare operations, including HME providers. We must get better at standardizing processes, learning and building on best practices, investing in important technology and professionalizing. Government regulation will continue to stifle our work. None of these obstacles are easy, but neither are they insurmountable.  Looking backward is hazardous. A changing world and a changing healthcare marketplace require us to look forward. The pace of change requires us to do it sooner rather than later.

Some companies recognize change, and figure out how they can use it to their advantage. Others see the coming trends, and fight to keep things the same. They see change as a threat to their business. Still others sit back and wait until they’re absolutely sure the trend will stick around before jumping on board. As a result, they’re constantly playing catch-up. Are you reimagining your products, services, and business model to gain your share of the future? Are you building a growth plan for emerging opportunities? Are you networking to find best practices and better ideas? Are you making the changes required of a serious business in changing times? This relevant quote by futurist Alvin Toffler is applicable: “Illiteracy will not be defined by those who cannot read and write, but by those who cannot learn and relearn.” Standing still is deadly.

Starbucks prices its coffee, arguably a commodity product, for twice what competitors do, and wins anyway. Apple solves problems, ones people didn’t even know they had until Apple showed them the better way. Kohl’s is a retail star; it wins in a trendy business using un-trendy, superior execution of business fundamentals. You see it’s not just failures around us. Successes are everywhere. 

The future is bright for many of us in this business. But make no mistake; it is a future that is different from the past. Change happens. Winners adapt, adjust business plans, seize on opportunities that emerge. We are part of a segment that is growing and will be much bigger in 10 years than it is today. Do you want to join Starbucks, Apple and Kohl’s, or would you prefer to go the way of Borders, Kodak and Blockbuster?