George Barrett– the 1973 Staples grad who starred in soccer, basketball and baseball and sang with the Orphenians — has had a storied career.
After graduating from Brown University with a double major in history and music, he taught and coached at Horace Mann, performed opera and folk music professionally, and got an MBA from NYU.
Today — hey, why not? — he’s chairman and CEO of Cardinal Health, the enormous healthcare company ranked #26 on the Fortune 500. He serves on many civic and charitable boards (including the Rock & Roll Hall of Fame), and has an honorary doctorate from LIU.
Recently, Institutional Investor spoke to Barrett. He discussed a number of topics, including the vast changes sweeping healthcare.
George Barrett (Photo/Andrew Spear for Institutional Investor)
Among the questions and answers:
Talk about the incredible changes taking place in health care, including the ACA.
These were the changes we were thinking about back in 2009, when we started to regroup. It’s well beyond the Affordable Care Act, which hadn’t yet been implemented. Demographic changes are tremendous. We have a dramatically aging population. We have 11 million people today over the age of 80. That number will double by 2025. This is just in the U.S., but it’s happening globally as well. As you know, older people are higher consumers of health care products and services. That creates economic pressures. How are we going to give these people access? We are spending around 18 percent of GDP on health care, crowding out spending on other issues like infrastructure and education.
Innovation is also transforming health care and our ability not only to prolong life and treat disease, but in some cases to cure diseases and repair physical pathologies with medical devices. Finally, the big trend is consumers becoming more like consumers, meaning they will have a greater role in their own health and, ideally, in their own wellness.
How do these forces change what you do as a company?
It changes everything: how we deliver care, in what setting we deliver care and by whom. How do you measure the quality of the care over time and, of course, who pays for it?
What’s the most difficult part of planning for that?
Well, the easier part was clearly having a point of view on what kind of changes would occur. The hardest part, in a way, is managing pace. It wasn’t impossible to imagine some of the changes or how they might play out, although getting them all right is, of course, impossible. What’s most difficult is over what time period. How fast does it occur? How dramatic are the changes?
As a leader, that’s actually one of the biggest challenges. I could assume that change will happen as it has historically, just rather slowly, and you just stick exactly to what got you there. Then you run the risk of really being disrupted or blindsided. On the other hand, you can assume that change is going to occur overnight, very fast. You’re so preoccupied with the future you’re not focusing on the disciplines of competing in today’s world, and you get hurt in your core activities, and you’re sort of out over your skis on the future. I think this issue of managing pace is important. I remind the organization all the time that we need to compete to win in the world as we know it today, and — it’s an and, not an or — have a clear point of view on some of these future trends and make some thoughtful, disciplined, measured bets on the long term.
Health care is obviously a big issue in the upcoming U.S. presidential election. There may be enormous changes coming regardless of which party wins. How do you plan around that?
George Barrett (Photo/Stephen Webster for Barrons)
I mentioned earlier that it’s hard to judge pace. Now add the complexity of the political year and the political discourse, which can be headline driving, but not necessarily deeply informed as to what’s happening on the ground in health care. I think we have to remind ourselves that what’s happening in the trenches is often different than what’s happening in the news.
It’s going to be a year where there’s a lot of discussion in the political realm about health care. There are certainly those who continue to talk about whether the Affordable Care Act is going to be repealed. I think undoing that is extremely difficult and we would not bet on that. I do think, like any piece of large social legislation, it will probably be modified over time. I don’t think that would be unusual. I think for us the key is staying agile, having a point of view on the future, making sure we have a seat at the table as we’re thinking about policy changes and that our voice is heard.
(To read the entire interview, click here. Hat tip: Michael Mahoney)
