What are some of the challenges that you guys are facing in the healthcare industry?
The patient empowerment trend is certainly making it easier for us. Our patients expect a lot more today. And not all of the insurers are really capable of delivering a level of service that the patient now expects. The providers themselves are trying their best, but the real problem lies in the insurance when they don’t necessarily approve a certain procedure. And obviously the finger-pointing happens, as you know. This trend is certainly favorable to us.
The only trend that’s not positive, in general, is that the insurance industry is incredibly, incredibly conservative. And so it takes a while for them to adopt some of the newer technologies. But the pressure is so high that we’re seeing a great amount of traction from some of the larger companies coming back to us and saying, “All right guys, we love what you’re doing. We want to see some of the early results. And we certainly want to touch on how can we work together to make this happen.” But we don’t anticipate that to be an overnight type of scenario.
What about industry consolidation? You’re seeing a lot of nontraditional consolidation these days with insurers, pharma, retail, obviously providers. These different areas of healthcare are kind of combining, partnering up. Whereas in the past, there’d be a lot of silos, a lot of kind of lone-ranger type deals where you’re on your side, we’re on our side. Is that kind of thing really helping you guys or is it making it more challenging?
The harder it becomes to provide good service and the harder it really becomes to make a profit in the industry, the more important it is to integrate vertically. And so I think that trend favors [ChronWell] significantly, whether it’s on the acquiring side or on becoming a high valuation from a target perspective. So imagine us wanting to acquire certain providers, so that we can integrate vertically and continue expanding on our claims cycle, right? That becomes a lot easier for us because the market’s supporting the valuations that the sellers are expecting and we can certainly drive a ton of value out of vertical integration at much higher efficiency. So, it makes sense for us.
“The harder it becomes to provide good service and the harder it really becomes to make a profit in the industry, the more important it is to integrate vertically.”
Joe Rubinsztain, chronwell
Now on the other side, as we seek capital to go do these acquisitions, the investors are now becoming more aware that the company becomes a much more attractive target. And therefore, they assign a higher valuation to it, which in turn allows us to do the acquisitions that we need to do. So, it’s a good cycle from our perspective. Certainly, the consolidation of the industry is helping us a ton.
What advice do you have for your fellow CEOs, whether they’re young, old, experienced?
Always hire better than yourself. If you don’t hire somebody better than you, you will never be able to grow. Number two, trust yourself. The reason you are there as a leader has nothing to do with you being better. It has something more to do with a certain set of qualities that are rare. If you recognize those qualities and are able to exercise a collaborative partnership with people that are better than you, you will become much bigger than what you could become yourself. Trust yourself as a leader, but do not impose your will.
And I think lesson number three is respect what you have built. At the beginning, when we started gMed, we truly didn’t understand what we had on our hands. We had a huge impact on that market. And that the bigger we got, the more impact we were able to achieve. But the problem was that constantly while growing, we always thought there’s something we’re doing wrong, there’s something we’re doing wrong, we’re not growing faster. The truth is, for the right companies, organic growth is okay. And if you’re doing the right things, that means you’ve got the right stuff. And if you’re having the impact, then it means you are a lot better than what you think you are.
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