What do BlackBerry and the Affordable Care Act (ACA) have in common?
Within the next seven years they will both be irrelevant, an asterisk in the history of business.
For BlackBerry it will probably happen sooner. They got too comfortable. Their corporate leaders failed to sustain innovation or understand where that innovation would lead. They broke two cardinal rules in marketing – they felt bulletproof and they fell in love with their product, forgetting that falling in love with the product was actually the customer’s responsibility.
For President Obama’s healthcare reform law, it started with 10 noble principles that almost everyone agreed with. But along the way the principles fell victim to the messy legislative process of deal making and compromise. The 10 principles morphed into a 2007 page monster that a majority of Americans do not like, or do not understand. In the end, what was produced was really payment reform, not the type of structural reform necessary to bend the cost curve. And in the end, ACA, too, will become irrelevant before the benefits become widely accepted.
It will be deficit/debt reduction, not ACA, that will drive the transformation of the healthcare delivery market and produce the level of savings that will bail out the government and help American businesses to be more competitive in foreign markets.
In an interview with Bloomberg TV [see video], Cleveland Clinic CEO Toby Cosgrove said, “We certainly are prepared for both scenarios, but for healthcare providers I’m not sure it makes a great deal of difference how this goes down. We know that we have to take costs out of healthcare and we are working very hard to do that.”
“The train has really already left the station…”
If you are paying attention to the deficit, debt and Medicare numbers – if you are not, you should be – then you already know that a major healthcare market/business model overhaul is unavoidable. There is not a current program or legislative proposal that has any chance of becoming law that will sufficiently reduce costs enough to stop the deficit hemorrhage that is being driven largely by Medicare, a program that will see millions of new beneficiaries added over the next 15 years.
We have no fallback position for this problem. Congress spent the money elsewhere.
In a free market, the theory goes, customers propel the change. Not this time. It will be significant cuts in Medicare spending that will force the transformation. The feds have no choice unless, of course, they think that the Greek financial crisis is something we all want to experience for ourselves.
I have been wrong before, but that is beside the point.
What are your thoughts?
© 2012 John Gregory Self