Health care is at an inflection point, Medtronic Chief Executive Geoff Martha said Tuesday in a LinkedIn Live event to outline the company's new branding campaign and a broad strategy for growth.
Technology advances will allow better access to care and more personalization of care — while also delivering on the elusive promise of lowering health care costs, he said. And the coronavirus pandemic has put both the concerns and the possibilities at the forefront for Medtronic and other health care companies.
"If we're not going to see that this is an opportunity," Martha said in an interview, "I don't think we ever will."
Martha on Tuesday announced the company's new branding, "Engineering the extraordinary."
Martha and Torod Neptune, the company's chief communications officer, in the LinkedIn presentation talked about how fast technology is advancing and how Medtronic aims to keep its spot as a leader in the industry.
The medical device and health care company, which is based in Ireland but has operational headquarters in Fridley, in the past year reorganized into 20 smaller units to more quickly respond to the marketplace "through speed and scale," Martha said in the presentation.
The company is putting money behind it. In its fiscal year that ended in April, the company spent $2.5 billion on research and development and opened its first engineering and innovation center outside the United States in India.
The company also pledged that by fiscal year 2025 it would produce 20% of its revenue from products and therapies released in the prior 36 months. That's up from 17% at the end of the last fiscal year, according to its Environmental, Social and Governance (ESG) released Tuesday.
A more aggressive branding campaign is needed as Medtronic needs to explain its new technologies to potential patients and as it needs more tech talent in a particularly tight job market. Medtronic also must convince government-run health systems in the European Union and other places that strategic investment in health care can save costs in the long run, expand access to care and lower costs.
Technology, he said, can redefine what is possible in health care. And Medtronic is in a good position financially to both develop therapies and acquire companies with new technology.
The timing is important, Martha said, because several countries are, like the United States, looking at infrastructure packages and many will include health care investments.
"More and more stakeholders ... are way more focused on this with a sense of urgency I haven't seen before," said Martha, who took part in the Group of 20 business summit meetings last week in Italy, his first overseas trip as CEO.
The pandemic has provided momentum for change, as people observed companies quickly pivot to new products and the vaccines developed and tested in record time.
Medtronic not only ramped up production of its ventilators and helped other companies make them, the company also added advanced technology to its models. For example, health care providers can now control them from outside the room — protecting them from more COVID-19 exposure. Medtronic updated all of its ventilators with the technology for free over the past year, the ESG report said.
The three areas with some of the most potential to transform health care technology are miniaturization, robotics and data/artificial intelligence. Already, Medtronic's surgical machines use all three.
Medtronic also has developed a pill with imaging technology in it. A patient can swallow it, for example, and health care providers can receive information about their colon health. As the United Kingdom health system was dealing with a large back-up for colonoscopy screenings since they were not done or patients were reluctant to have one during the height of the pandemic, Medtronic worked with the agency for people to use the pill technology.
The company also is developing a device that could help control blood pressure without medication. Clinical trials are near completion on the device.
"These technologies are changing the game," Martha said during the LinkedIn presentation.
There are some headwinds for Medtronic as technology disrupts the business. Different competitors could emerge as data and artificial intelligence become more central to product development. Medtronic also must focus on how to keep the data safe, Martha said.
And companies in other countries such as China could emerge as governments and venture capitalists support health care product development, he said, and compete for tech talent.
Medtronic also has a goal outlined in the ESG report to decrease complaints on targeted products by 10% by fiscal year 2025, which requires money for quality control and communications.