Richard “Ricky” Caplin is CEO of The HCI Group of Jacksonville, FL.
Tell me about yourself and the company.
Coming out of Thanksgiving, I feel like one of the most blessed guys in the world. I’m married to Danielle, who is an amazing wife. I have three kids – Callie is five, Rilen is three, and Brooks is five months old.
I’m an entrepreneur. I started at KPMG as a CPA and wound up in healthcare technology. My father and two sisters are doctors. I’ve been blessed to grow HCI from a small company in a friend’s townhome to become one of the largest healthcare technology consulting firms in the world.
How does HCI fit into Tech Mahindra’s plans now that the acquisition is complete?
It’s helpful to understand HCI and who we are to answer that question. We were blessed to have become one of the larger and leading healthcare technology consulting firms. But when you look at where our expertise lay, it was primarily around the digital strategy and advisory services, implementation, training, project management, and support of the electronic health record and the applications that play with that. We started to do a little bit in cybersecurity and a little bit in innovation, but when you look at where we spent the majority of our time, it was really in only maybe 20 to 30 percent of the actual healthcare IT spectrum and spend.
Fast-forward to Tech Mahindra. They’re one of the leading digital transformation and innovative, entrepreneurial, large companies in the world. I think they’ve got roughly 117,000 employees. They’ve had tremendous growth and are leading the way of some of the international firms. They didn’t have a lot of expertise in healthcare, specifically around where we played, but they had tremendous strength in digital transformation and some of the services that we offer now. That rounded out the rest of the spectrum.
When I talk with people and I share why we did this thing, in the US, a lot of the large-scale implementations are slowing. There are obviously mergers and acquisitions occurring, but a lot of the large projects will be finishing up or happening over the next couple of years. Most of the healthcare IT executives that I speak with are focused on what’s next, and of course there are tremendous pressures to do a lot more with less.
Our focus has now become, what is beyond this big project? How do we decrease operating expenses and do more with less? How do we innovate? A lot of the capabilities that Tech Mahindra brought to the table — around infrastructure, robotics, automation, application managed services, and innovation — are focused on bringing costs down and doing more with less. It brought us from us doing 20 to 30 percent of the spectrum to 100 percent of the spectrum and allowed us to do a lot of next-generation capabilities.
How are other health IT companies reacting to what sounds at least like a changing if not actually diminishing demand?
If you look at the consulting firms in our industry, most of them have at the very least plateaued or are shrinking. Very few are still growing like HCI. That’s because a lot of them were tied to these implementation bubbles. That reinforces why we did what we did. We had to change.
There’s certainly going to be implementation business in the future. I think the last statistic I saw was the implementation business is constricting at about nine percent a year. That may have expedited since I last heard that, but that’s just one small piece. That’s where we built our expertise, but that’s becoming less and less of what we do. There’s so much opportunity beyond that. That’s the exciting part, as our industry becomes more disrupted.
HCI was an early international player. Will companies that are late in developing international business succeed?
We’ve probably been international since the first or second year of doing business. We didn’t make money for a long time internationally and we invested a lot of time there. I’m skipping back to give you some history, but when we started the company, we really didn’t get going until 2011. I think we claim 2009, but we weren’t doing healthcare technology consulting until 2011. That was the height of Meaningful Use, those couple of years.
We were always concerned. We knew it was a bubble. We wanted to do the best we could and learn as much as we could in that, but we were always focused on what was next. One of those areas was global. We probably have more clients and speak with more healthcare IT executives globally than any other firm in the world, including the big ones.
To answer your question, I think we’re at the tip of the iceberg with some of these large-scale implementations internationally. But I think the game is a little different than it was in the US. In some of these countries, you may only have two or three buyers. Maybe one, in some cases. It’s a little different than when you can go around the United States and sell to hundreds of different hospitals and health systems. Internationally, my experience has been it takes a while to build trust and relationships with a lot of these folks.
We learned some valuable lessons over the years. I won’t share all of them, but certainly one of the most important ones is that you can’t be a bunch of Americans coming to foreign countries telling them how to do things. You need to hire and develop that indigenous talent and knowledge of how they do things. You need to be able to bring in the global best practices. With that comes some of the American and British ways of doing things.
Now that HCI Group is owned by a non-US parent company, even though most of its business comes from the US, will you have to apply those same localization efforts in integrating their consultants who may not be familiar with how we do things here?
One of the important things to understand about our merger or acquisition of Tech Mahindra is that we’re a completely independent, standalone company that operates as The HCI Group. Basically nothing changed in our company. That’s why they bought us, because we understand healthcare and we have a lot of these relationships already.
They’re not influencing the way we do things. But what they are doing is giving us so much more capability to do things. Obviously our balance sheet is a lot stronger to go in as a systems integrator and take more risks and do more innovative things, so this was designed intentionally to allow us to continue to be entrepreneurial and to be their healthcare arm.
We just announced that we’re the global partner for CHIME. It’s a five-year deal. Everywhere the CHIME logo is, you’re going to see The HCI Group attached to it. It’s The HCI Group. It’s not Tech Mahindra.
Has Tech Mahindra made other healthcare acquisitions, and if so, have they let those companies continue to operate under their original names as they will do with HCI?
This was their first and only healthcare acquisition. Obviously they had some healthcare business. The healthcare business in the provider space that HCI acquired and they inherited, we brought onto our team. They have some good experience in the payer and life sciences, pharma side of things, but right now I’m just provider.
Tech Mahindra is a fascinating company. One of our sister companies that’s fully owned by Tech Mahindra is Pininfarina, the designers of the Ferrari. They also designed the new Coca-Cola Freestyle machine, the one where you can mix your own items using cherry, diet, vanilla, or Coke Zero. It’s one of the top Italian design companies in the world and Tech Mahindra bought it. I’m setting up conversations with some of the leading healthcare IT executives in the world, bringing Pininfarina in to rethink healthcare, the way you engage with the patient, and the way that’s designed. There are really cool conversations that we’re starting to have in innovation.
We weren’t looking to sell the company. We had a number of strategics reaching out to us just because of the growth, size, and scale. We had become probably the largest and fastest-growing in our industry. You always take the call and have the conversation. Who knows where it will lead? You make a new friend. It might be B2B. Certainly it’s nice to speak to people. I got to meet the CEO and vice-chairman and president of Tech Mahindra about a year and a half before this happened and we were just talking about B2B opportunities. I wasn’t overly interested in selling the company.
I founded HCI with my brother-in-law and one of my best friends, Greg Jones. He came to me one day and expressed that he felt called to go into the ministry and was going to be looking to do something else. When he told me he wanted to go to seminary school, all of a sudden these conversations became a lot more real. I had gotten to know the folks at Tech Mahindra and obviously we had a lot of other opportunities, but I felt this is where God wanted us and it was the right opportunity. Believe it or not, Greg actually started seminary a few months ago, right after we sold.
Where I was going with this is that I spent a lot of time coming from basically not knowing anything about the people of India to realizing that the people at Tech Mahindra are brilliant, from the lowest level of the company to the highest level. They’re good people. Throughout that process, I felt like I was being called to help serve the people of India, particularly the children of India. That has become one of one of my passions. I don’t know how it’s going to all work out. I know I’m spending a lot of time learning and figuring that out and meeting with some orphanages. I’m really excited to see where that can go. I feel like I’m exactly where God wants me right now.
People wonder where I’m going now that I’ve sold a big part of the company. I’m still an owner for another few years, but I’m still fairly young. With the opportunity I’ve been given with HCI Group and Tech Mahindra and now my new passion for the children of India, I’m not planning on going anywhere any time soon.
What consulting services are in most demand?
Obviously there’s a lot of pressure to do more with less. How we automate things, which could be through robotics, outsourcing, or artificial intelligence. Certainly infrastructure managed services and application managed services. Cybersecurity has been a huge opportunity and a high-growth area for us.
The most interesting conversation that we’re having with a lot of leading institutions is the leapfrog conversation. We’re having strategic conversations with leading institutions on how they can catapult to the next level. Instead of being a lagging industry, how do we lead through technology and disruptive technology? We’re having white-boarding sessions with some leading institutions.
That’s one of the beautiful things about Tech Mahindra. They bring so much knowledge and lots of startup companies and different types of things to the table. Then we’ve got things like Pininfarina. These aren’t tomorrow-type ROIs for an organization like ours, but this is where the future is and this is where we want to play.
Do you have any final thoughts?
We’re at a very exciting time in healthcare. I don’t think we’re going to recognize the way healthcare is done today in 10 years, maybe even five. We all know that change is coming. A lot of companies and health systems are leading. With the political times, we know that change is coming. With the unrest in the Middle East, we know that change is coming.
I’m really excited being a global leader in healthcare technology consulting and knowing a lot of these healthcare IT leaders around the globe, to be a platform and a catalyst for that. We may not come up with all the best ideas ourselves, but oftentimes our clients and partners will. Being that platform for a lot of them to speak, we’re sitting in an exciting and unique place.