COUNT ME AS ONE WHO IS NOT SURPRISED THAT SEVERAL of healthcare’s billion-dollar corporations have posted huge losses. I may be at the age of retirement, and I might be guilty of values and ethics often labeled as “old fashioned,” but I am possessed with common sense.
Those of our clients carefully following news stories about healthcare companies know that many of the biggest and most recognized players have surprised their stockholders with losses of astonishing size, announced seemingly without warning. But in today’s world of big money, many of these companies became big without addressing the fundamentals of any good business.
My business experience tells me that any company which delivers a quality product that meets and exceeds the needs of its customers is guaranteed success, but only if its management team can competently execute a good business plan. Examples of this? General Electric gets lots of plaudits, and I think they are well-earned. One of my favorites is Emerson Electric. It has 36 consecutive years of record earnings and profits! Better known companies are Federal Express, which created an industry, and Microsoft, which seems to continually offer software with more features and lower prices than its competitors (although many of you curse the complexities of certain Microsoft programs).
Here’s the point I want to make. You can read our editor’s predictions of further hard times ahead for the healthcare industry on pages 4-6. He’s probably right that healthcare’s struggles to reinvent itself will tend to make it more difficult for clinical laboratories to earn a fair profit. His analysis is based on sound fundamentals, although he tends to downplay the equally serious impact of ongoing government interference in the healthcare market.
Here’s the point I would like to make: although there will be gloom and doom for many healthcare providers during the next five years, there is also an opportunity for clinical laboratories to enjoy reasonable success. However… that success depends on a business capability not yet widespread in the laboratory industry. That business capability is management skills combined with the courage to initiate change.
In any economy, in any industry, at any time in the market cycle, you can find successful businesses. They are the ones with a value-added product, close attention to their customers’ needs, and good management implementation. I believe such managers are emerging in our industry. That is why I believe that optimism about our industry’s future is justified and appropriate.