Indiana’s health care giants were well-represented last week at the J.P. Morgan Healthcare Conference in San Francisco. Now in its 33rd year, the conference has become THE event where deals get made, deals get announced and every company touts itself to investors.
Anthem CEO Joe Swedish and Eli Lilly CEO John Lechleiter made presentations, as did David Dvorak, CEO of Warsaw-based orthopedic implant maker Zimmer and John Greisch, CEO of Batesville-based hospital equipment maker Hill-Rom.
Every speech is designed, as much as anything, to get more investors to buy each company’s stock. And this year at least, those sales pitches all had a common theme: We’re not the same-old company any more.
“Our business has been transforming from a historical business-to-business model to a business-to-consumer model,” Swedish said, in a statement that could apply to all the companies at the conference.
Anthem: Changing from the company you hate to the company you love.
Health insurers have often been one of the companies consumers hate the most. It was health insurers that were the main target of Michael Moore’s 2007 film Sicko, and it was Anthem (formerly called WellPoint) that President Obama made the poster child of bad behavior in the push for his 2010 health reform law.
Swedish acknowledged that the health insurance industry has ranked at the bottom every year in a survey conducted by Forrester on consumer experience. That didn’t used to matter under Anthem’s old business model, which was aimed at wringing the biggest price discounts from hospitals and doctors and then selling those discounts to employers’ human resources staff.
Consumers were a tangential part at best in those transactions.
But now the Obamacare exchanges are boosting enrollment in individual insurance plans, and employers are shifting to private exchanges that will have the same effect. In tandem with those shifts, consumers are seeing higher and higher deductibles that put the initial cost of care on their shoulders.
In response, Anthem is desperately trying to become the company that helps consumers shop for care, manage their health and navigate the complex world of health care providers. It is pouring money into new information technology resources that function more like Amazon than the Anthem of old.
“Over the next three to five years, our ambition is to emerge as the health plan with the leading and distinctive consumer experience as a key point of differentiation,” Swedish said.
Hill-Rom: No longer a hospital bed company. In fact, an anti-bed company.
“We’re more than just a bed company,” Hill-Rom CEO Greisch implored the audience at the J.P. Morgan conference.
These days, Hill-Rom is making a host of products, many of which are designed to help patients not use its hospital beds—a strategy it has had to embrace as hospitals are under enormous financial pressure to keep patients out of the hospital, and as medical technology requires fewer and shorter overnight stays.
“What we do for our customers, first and foremost, is help them actually keep patients out of the beds, advancing mobility, mobilizing patients as quickly as possible, ensuring that they’re not stuck in a bed for too long a period of time,” Greisch said.
Hill-Rom is doing that with beds and bed surfaces that reduce severe bed sores, as well as lifts that help get patients in and out of bed. It also sells surgical instruments and other products for operating rooms, as well as IT products designed to help hospital nurses be more efficient.
Zimmer: Now putting things in your entire body, not just your knees and hips.
Warsaw-based Zimmer Holdings Inc. has made a fortune selling knee and hip replacements. But with those expensive procedures now being targeted by hospitals looking to cut costs, Zimmer is touting its whole range of implants for the spine, hands and feet, for traumatic injuries and even for dental surgeries.
“We span the entire anatomical portfolio,” Zimmer CEO Dvorak told investors.
Zimmer, which is set to close this quarter on its $13.4 billion purchase of cross-town rival Biomet, thinks the combined companies will be a juggernaut for the “entire anatomical portfolio.”
“Each of these entities has historically, generally, been focused on total joint replacement knees and hips,” Dvorak said of Zimmer and Biomet’s sales efforts. “But I will tell you as importantly to us,” he added about the combined Zimmer-Biomet, “it creates some incredible scale opportunities across the other product categories.”
Lilly: The big pharma company that’s now like a biotech firm.
Lilly has been calling itself a biotech company for more than a decade now. That claim was based mainly on the sales of its insulin products, which are technically biotech products, but not the most sophisticated (and commercially successful) variety.
But with Lilly now just No. 4 worldwide in overall diabetes sales, and with its longstanding psychiatric dominance now ended (after the patent expirations of Zyprexa and Cymbalta), Lilly’s near-term future hinges more so than its peers on its success at launching new drugs.
That’s more like biotech companies, which woo investors with their pitches about their “platform technologies” that could one day lead to a handful of blockbuster drugs.
Lechleiter noted Lilly’s success in 2014 at getting new drugs approved, and mentioned the new products it expects to launch in 2015.
But the really enticing things are high-risk drugs Lilly is working on: evacetrapib as the next-greatest cholesterol lowering drug and solanezumab as potentially the first truly effective drug at slowing Alzheimer’s disease.
“These prospective new launches position Lilly for robust growth in the next few years, with the potential for what some have called ‘biotech-like upside’ later in the decade with molecules like evacetrapib and solanezumab,” Lechleiter told the J.P. Morgan attendees. It is, he added, “an exciting time for Eli Lilly and Co.”