The idea that we are in a constant state of change is of course nothing new. Heraclitus (6th century B.C.), even went so far as to identify constant change or flux as a foundational tenet of his philosophy. The study of ancient philosophy is in many ways a study of the flawed, and the concept of flux is no exception.
However, while Heraclitus was speaking in a metaphysical sense, perhaps he was just in the wrong line of work. Had he been an observer in our industry he would be praised for his insight, for change is constant.
So if change is constant–what to do? Profile companies that effectively gain market share in periods of disruption, and you will find common links: business intelligence, thoughtful innovation, and a plan forward.
Business Intelligence
Business intelligence monitors many fronts including economic, societal, competitive, and regulatory trends. The major disruption for our industry has come from the regulatory and legislative front. Addressing health care was a major focus of the Obama administration for the first year. The administration scored three legislative health care victories in the first 14 months including: Children’s Health Insurance Reauthorization Act of 2009, American Recovery and Reinvestment Act of 2009 ($19 billion in health care IT), Patient Protection and Affordable Care Act of 2010, and the Health Care and Education Reconciliation Act of 2010.
Consensus opinion is that major legislative efforts are completed, and the focus will now shift to interpretation of legislation passed. Beyond the natural cycle of legislative activity, mid-term elections and recent electoral momentum shifts tend to make this shift a likely scenario. The continued impact to our industry will be felt as interpretive rules and guidance are generated.
As this goes to press, the next front of legislative push is not on health care but is on financial reform. While the initial focus was on aspects of Wall Street that concerned Main Street such as the regulation of derivatives, there could be indirect impact to the health care market through the Durbin amendment and other provisions.
Effective business intelligence allows successful companies to manage risk and find new growth opportunities to exploit.
Embrace Innovation
High performance companies recognize the economic cycle will change and wisely keep their eyes on innovation to fuel future growth.
Many in the market are finding card solutions to be a major opportunity to serve customers in a more flexible manner while driving innovation. The use of cards removes cost from manual solutions, and through interchange can materially grow program profitability as each transaction generates shared revenue. Innovators realize that the business model you adopt with your partners must include interchange share as a key component. Your business won’t thrive without it in a card-rich environment.
Thought leaders view cards beyond tax-advantaged account access to further expand on the card ROI trend. Reimbursements and rewards mechanisms have led to the cash account (purse) as a stacked card option, providing funds back to cardholders, without cutting checks. In a stacked card arrangement, cash purse is a standard account solution, not an afterthought. Use of a cash purse eliminates the cost of cutting checks and when loaded onto a card adds to the base opportunity for interchange.
Thoughtful innovation such as expanded use of cards and cash purse to deliver client ROI are examples of industry leaders finding growth opportunities in this period of rapid change.
A Clear Plan Forward
Companies that have a clear plan forward will fare better than those in a simply react mode. The diversity of plans is as rich as the diversity of companies in CDHC; however, all would do well to include a few primary building blocks:
Business intelligence, innovation, and a clear plan are all important when working through a period of rapid change. But remember that it isn’t just about change. Along with the awareness of the flux should also be an appreciation of the other Heraclitean tenet, the logos. Where the flux describes the concept of constant change, the logos describes the concept of universal connectivity. After all, we are all in this together.