After more than two decades in the pharmaceutical business, mostly in international jobs with drug giant Eli Lilly, Thomas Wellner moved into the top spot at CML HealthCare Inc. in February. CML runs a network of medical labs in Ontario and imaging clinics that perform X-rays, ultrasounds and mammograms in three provinces. When he took over, CML had been without a permanent chief executive officer for nine months, and had recently retreated from an unsuccessful foray into the United States. One of Mr. Wellner’s first jobs is to develop an expansion plan to add some growth to the company’s profile.
Was it tough to take over the top spot of a company that has been undergoing considerable turmoil?
CML has been around for 40 years, but the last five to seven years have been relatively challenging. There was the transition from a founder, a significant transition on the board, and also a transition in the market. And the governments we serve are challenged in dealing with all the demographic swings in health care. Obviously there was a feeling that leadership needed to be changed. But I’ve been in some unusual environments previously, so this particular foray is nothing different.
What did you have to do in the first few months to get employees on side?
The prior leadership seemed to feel they needed to stay at home. I don’t ascribe to that philosophy, [so] I have visited more than 100 of our specimen-collection centres and imaging clinics as well as labs and data centres. I have done a significant number of town hall employee meetings.
I tend to be a roll-up-your-sleeves [person who wants to] understand what is going on. I certainly read reports, study data, look at trends and understand markets, but I also like to see the process flow at the ground level. I like to understand what people are struggling with, and where they see opportunities for us to do the business better.
Why is it so important to get out into the field?
We are interacting with 25,000- to 28,000 patients a day at our collection centres. We have 120 couriers that pick up and drop off samples. We are uploading and downloading data and information to physicians. We do more than 300,000 tests a day. So to truly understand that, you need to get out there and see it happening.
Is this something that CEOs in other kinds of businesses should do better?
A CEO needs to see the big picture, but also needs to understand what is happening at the ground level. It is also a great way to engage with your people who have ideas for what could improve the business. You get a different perspective when you are sitting side-by-side on a lab bench looking at how [an employee] is assessing a sample.
Is there an important role for private-sector companies in Canada’s medical system?
I strongly believe there is. Frankly, it is a fallacy if we think that we have a single system. There are many examples of services that are provided successfully on a private basis – physiotherapy [services] and long-term care facilities, for example. So, absolutely, there is a role for private providers. I believe that health care is a very personal thing and people should have more choices as to how they allocate their own resources to it.
Is CML really a low-risk dividend play with predictable income streams, or can it also be growth story?
I believe we can [be both]. The dividend and the steady income are very important to our investor base. I certainly respect that, and believe that there is a component of our business that will continue to provide that. But if we can add more innovative tests and additional services through our existing network, that could provide us with growth. We also have opportunities to be acquisitive, and we have opportunities to expansion geographically.
Would you like to provide more services that are currently part of the public system?
We have the capability to provide high-quality MRI services but, based on our licence restrictions, we are not able to service all the patients we get. We get lots of patients who say that they would gladly pay additional fees if they would not have to wait 100 or more days for an MRI, or to go to a less-convenient location. We could provide that, if we had some loosening of the restrictions.
Would you look at expanding imaging beyond the three provinces you are in now?
Right now we just want to stabilize the imaging business and complete the digitization [of the service] to make sure that we are as efficient as possible. I don’t see expanding imaging as a main strategic priority right now.
What went wrong with the expansion to the U.S.?
The United States has a very different health care system. I think that was not recognized. Second, in the imaging business you really have to do a good job engaging the radiologists, and I’m not sure that that was done. Third, I think there was a bit of chasing the deal. And the changes to the U.S. reimbursement [system] really didn’t help.
Would you ever re-enter the U.S. market?
We might at some point. Right now there are enough uncertainties in the U.S. as to how the health care changes are going to play out that it is not on the immediate horizon. There are other opportunities geographically that are a higher priority for us.
Would you consider expanding further afield?
Yes, but that would be more the day after tomorrow. We could go into a jurisdiction that has a single-payer market [where we could] deliver services very similarly to how we deliver them in Ontario. There are three or four countries that have that type of model in Europe. There are a couple in Asia that fit. Even places such as the United Arab Emirates and also potentially India.
You have worked around the world. What’s the value of international experience to a senior executive?
It is absolutely crucial. But I’m not sure that many companies, especially ones in Canada, truly appreciate it, because we have a very local, provincial mindset in a lot of ways. Other than in the natural resource industries, and perhaps the banks, we don’t really have that many truly global players. But I think it should be a component that is stressed in a senior leader’s development.
President and chief executive officer, CML HealthCare Inc., Mississauga, Ont.
Born in Charlottetown; 47 years old.
Bachelor of science (life sciences) from Queen’s University, Kingston.
–Joined drug company Eli Lilly in sales, becoming marketing manager of the Pacific division in the 1990s.
–Ran Lilly’s 1,200-employee German operation from 2004 to 2007.
–Named president of Ontario pharmaceutical startup Therapure Biopharma in 2008.
–In 2011, became president of drug-delivery company Convergent Healthcare.
–Named president and CEO of CML HealthCare in February, 2012.