George Barrett and Cardinal Health stay ahead of health care’s pace of change

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George Barrett, chairman and CEO of Cardinal Health, wants to be challenged and face the hard truths. For him, that’s how you can be the most effective leader.
He’s been known to wander around the office and encourage people to talk.
In town hall meetings, Barrett will sometimes intentionally try to draw out organizational observations that are uncomfortable — he wants to hear examples of where the company has failed to deliver.
“I think as you obtain a certain level of leadership in any organization, whether that’s a business, a church or government, there’s a tendency for a system to form around you to make you feel good, to basically deliver the good news,” Barrett says.
Good news flows easily in most organizations, so the challenge is getting bad news, which is how you learn and adapt.
“I’ve certainly been in organizations in my life where it was very, very difficult to hear the difficult truths, and those difficult truths are the ones that help you compete — those are the ones that really tell you whether or not you’re serving a customer well or creating the right environment for your employees,” he says. “And if you’re insulated from that reality then you’ll never be a great organization.”
Facing the hard truths has never been more important than in the health care field where the pace of change has picked up dramatically. For example, Cardinal Health’s ability to manage quick changes and industry ups and downs helped the company weather the steep challenge of replacing $17 billion of business when it lost its Walgreens contract in 2013.
Here’s how Barrett and his more than 34,000 employees are positioning the $91 billion company so it remains a solution provider to the health system.

Betting on the future

In an industry like health care where there is a lot of turbulence and it’s not completely clear what all those changes will mean, it can be difficult to determine what strategy to take and what resources to develop.
“There has been probably more dramatic change in the last couple of years than we’ve seen in the decades prior, and I would expect it to continue to happen,” Barrett says.
Instead of focusing on the implementation of the Affordable Care Act that continues to go through modifications, Cardinal Health has realigned itself around what it does know.
“So rather than obsess about (the ACA), what we have really focused on is, what are those major trends in health care? And how do we see them unfolding?” he says.
It is completely clear that there is an aging population that will need increased care, and public health problems will continue to challenge us as a society, Barrett says.
If, as a nation, we’re spending 18 or 19 percent of gross domestic product on health care, there will be pressures to manage per capita spending, and health care institutions need to be part of that solution. Health care is going to need to be delivered in multiple settings that will be more coordinated over time, and consumers will be more involved in their own care, he says.
Some of the experimentation in the health system will stick and others won’t. That’s why Barrett says the company has systematically identified areas that are extremely important and made investments — from generic pharmaceuticals and biopharmaceuticals, to alternative sites of care.