At the Helm

Why Quest Diagnostics' CEO isn't content to run the 'world's largest lab'—and where he's taking the $8B company next

by Eric Larsen, President, larsene@advisory.com

Welcome to the "Lessons from the C-suite" series, featuring Advisory Board President Eric Larsen's conversations with the most influential leaders in health care.

In this edition, Steve Rusckowski, chair, president, and CEO of Quest Diagnostics, talks about how diagnostic information services can inflect the country's $3.6 trillion in health care costs, the unexpected upside of the Theranos misadventure, and how Quest is thinking about the drawbacks—and benefits—of the landscape-changing regulatory shift known as PAMA.


Steve Rusckowski, chair, president, and CEO of Quest Diagnostics

Question: Steve, you're in your eighth year helming Quest Diagnostics, the $8 billion leader in diagnostic information services. I'd like to first ask you about the scale of the company—while you're predominantly focused in the United States, with almost 50,000 employees and 7,000 access points, you also have a global presence. In other words, you guys are ubiquitous—not too many unmarked spots on the map. Overall, you touch one-in-three Americans, with access to more than 90% of insured lives in the country.

Steve Rusckowski: Actually, Eric, if you take out Kaiser, we have 96% of insured lives.

Q: That drives the point home even more forcefully. Now, before we talk about who Quest is today, let's go back for a moment to your corporate origins. A true "only in America' story—Dr. Paul Brown founded Quest in 1967 out of a single-room Manhattan apartment—with a $500 loan from his father-in-law to start the company, he used his bathtub as a staining area for Pap test slides for cervical cancer, and his wife would drive specimens around town with their kids in the backseat.

Fifty-two years later, I think we can conclude—in light of the geographic presence I described a moment ago—that Brown's vision is on its way to being realized. So from that NYC apartment company formation all the way to today—how would you define Quest's value proposition?

Rusckowski: Dr. Paul Brown's vision was that the laboratory industry should do more of this in common through central locations. So he envisioned a day when there would be independent labs like ourselves where you have large hubs with physicians. And hospitals would send out what testing could not be done as economically in a hospital setting and as well as in a central location. So you're exactly right, Eric—that has become a reality.

If you think about what we do, sure we're the world's largest laboratory—but I didn't join Quest Diagnostics to run the world's largest laboratory. I joined Quest Diagnostics to make a larger contribution. And the contribution I saw in health care innovation is diagnostics, because it is at the beginning of every costly decision. Diagnostics is only 2% to 3% of health care costs, and yet 70% of decision-making in health care is based upon those lab values—that expensive next choice you make is very dependent on the results of the biopsy, the CBC, the cholesterol test. And if you think about 70%, you have this incredible leverage opportunity.

So when I joined, we said, "Yes, we're one of the world's largest labs, but that's not our business. We're in the business of empowering better health with diagnostic insights," which we define as diagnostic information services. Because increasingly, as you move away from the chemistries and into genetics and molecular, as you start to think about the useful attachment of that data to the things that are really going to advance health care, you realize that the information and services are becoming more important.

Q: That's a key distinction—moving beyond simply providing the data itself to actually deciphering the insights. As you pointed out, diagnostics may represent only a fraction of total healthcare costs, but arguably those insights touch upward of 70% of downstream, longitudinal care. And as you move from basic lab to the more frontier genetic and molecular tests, the stakes are only going up.

Rusckowski: Exactly. Let me offer a computer metaphor. In the '70s and '80s, the big computer companies were IBM, Digital Equipment Company, HP with the HP 3000 minicomputers. And then one day Bill Gates gets up in Seattle and says, "You know what? More can be done at the desktop." As did Steve Jobs in Palo Alto. And what made it useful? Well, there was software that provided useful business tools, like WordPerfect, VisiCalc, graphics, all of that—and nowadays, nobody knows what a minicomputer is, right? And as the software became more sophisticated, services became a useful necessity to understand and interpret the software.

And that's a great metaphor for what's happening in the laboratory world, where genetics is this increasingly complicated form of science. We have MD-PhDs creating laboratory-developed genetic tests to provide information used to determine whether a cancer drug will work. But when oncologists get that information, they actually need a lot of help because they haven't been trained on it—so we've also hired genetic counselors to interpret that data. Similarly, we've got agreements with Illumina and Thermo Fisher to use their next-generation sequencing technologies for clinical testing, but that generates a lot of data, just like the old computers did, so we need to make it useful, find the insight in that data, and then be able to explain it.

So increasingly, as the science advances, the focus of our business is diagnostic information services—because there's nothing more expensive to health care delivery than a bad diagnosis.

Q: Let's go a bit deeper into what Quest labels its "esoteric" work—the advanced genetic and molecular testing. As an example, you've partnered with Memorial Sloan Kettering to advance precision medicine in cancer diagnosis and treatment, with an aim to drive greater accuracy in treatment decisions and drug efficacy. Obviously, this is exciting work at the frontier of medical science. How much of your business and mindshare does this represent?

The best resources to guide your precision medicine strategy

Rusckowski: So first of all, of about $8 billion in revenues, about $6 billion is what we'll refer to as general diagnostics. And it's an operations management dream: We do a half a billion tests per year, and we do it incredibly efficiently. We have 12,000 phlebotomists drawing blood. We have 3,800 couriers in cars picking up those specimens, then 23 airplanes that moving them to the right laboratory. We then load up our laboratories, and 95% of the time, we're sharing the results the next morning via EHRs—we coordinate with all 600 interfaces, big and small. The biggest portion of our workforce works from midnight until 8am.

And then there's the billing: If you do the math, we're at $8 billion, and there are 160 million requisitions per year, so our average order is about $50. Each requisition includes three to four tests, and therefore we receive about $10 to $15 for each test on average.

So to your question on the advanced work. From this massive set of operations, because of our capabilities, we've developed about $1 billion of business in what we refer to as "advanced diagnostics," which as you mentioned centers on genetic and molecular testing—in fact, most people don't realize this, but we're the largest genetics diagnostic company out there right now.

And our work here is multifaceted. Our partnership with IBM to identify personalized cancer treatment options fits into the idea of attaching information to health care choices to move health care forward. But we're also exploring broader areas like consumer genetics—like our growing relationship with Ancestry to do their ethnicity testing, as well as using services to help payers and integrated delivery systems work on population health. And the work with Ancestry has shown that there is a growing segment of consumers who are willing to pay for things out-of-pocket that we never thought they would; there's a company in California called Color Genomics, which basically provides an over-the-counter, relatively inexpensive BRCA test primarily for women.

Partnership strategy

Q: We alluded earlier to how unconsolidated the lab industry was when Brown got started. And as much consolidation as there's been in the past 50 years, the industry is still quite fragmented. Quest represents only 8% of the larger $80 billion lab sector. Independent labs are 17%, LabCorp is 7% and the balance is owned by hospitals and health systems. I presume, Steve, that if you're going to inflect the broader health care inflation rate, achieving greater scale is a prerequisite. Fair assessment? And if so, are the independent labs and health systems approaching Quest for partnerships? 

Rusckowski: It's a good question, Eric, and you're right—we are aligning more closely with those independent players and health systems. When I talk to the C-suite of integrated delivery systems about their diagnostic information strategy, we're really talking about three things. One is if you run a hospital, then you need to have a laboratory for in-patients, and we have proven methodologies to save you 10% to 20% of your cost center. So if you're running a $200 million cost center, we can save you $20 to $40 million per annum. Two, you're sending out the more sophisticated testing—advanced diagnostics, genomic, molecular, so on—and chances are you're not overly sophisticated about how you buy that. So we can help you save money on that and also just get better at your whole diagnostic workup. And three, for the roughly one-third of the market that's hospital outreach, where systems are leveraging that lab asset to be in business serving physicians outside the four walls of the hospital, we can work with systems to figure out whether they really want to be in that, given the pricing pressure that they're getting from Medicare, Medicaid, and commercial insurance. Sometimes, we actually buy their outreach business.

So it's a three-prong discussion, and we have systems where we do all three. And when we get into this discussion, we can explore how to address the other things keeping them up at night. Depending upon the system, we can get into population health, employee health, and other areas that we're working on. In some cases—including Banner Health, University of Pittsburgh Medical Center, and University of Massachusetts—we've created joint ventures.

Q: Quick math question for the uninitiated here (myself included): You mentioned as an example a $200 million cost center, and that because of the efficiencies that Quest can bring to it, you can net 10% to 20% savings. How big does a health system need to be in terms of its revenues to have a $200 million cost center?

Rusckowski: If the example's a $200 million cost center, that's roughly a $3 billion system. If you look at the cost of running a hospital system, roughly 50% of the costs are ancillary services, and within the ancillary services, roughly 15% is the lab cost. So that's where the $200 million comes from. So it's not insignificant, and while it's a portion of the system that it's labor-dependent, it's not as labor-dependent as the other 50% of the cost structure. So it's an opportunity to save that 10% to 20% without a lot of heavy lifting.

Q: Which is a material number when you consider that the average nonprofit health system operating margin last year was 1.7%.

Rusckowski: Yes, exactly. Now every conversation is different, as you can imagine – if you see one integrated system, you see one. Every opportunity we see is different, depending upon where they sit with their geography of laboratories and what they have for patients.

So a couple examples: As I mentioned, we've formed a JV with the University of Massachusetts. We bought their outreach business back in 2013. And for John O'Brien, the gentleman running the system, his thought process was, "In Massachusetts, it's all going to value-based reimbursement, so I care less about activity and fee-for-service and more about lowering my cost to serve." But in Connecticut, where we bought Hartford HealthCare's outreach business and provided a nice cost-savings opportunity by moving it up to Massachusetts, it was all about becoming more efficient—the CEO, Elliot Joseph, was more in the camp of, "I've got a $100 million cost center. I need good ideas about how to save money that I can implement quickly."

And on the West Coast, where we did the trifecta with PeaceHealth—we bought their outreach business, we help run their laboratory, and we provide their sophisticated testing—the C-suite is thinking more about where to put their resources and what their strategies for success are. It's, "Do I want to invest my capital into buying the next generation of equipment or in advanced diagnostics? Do I want to rely on more partners now to become more efficient in different areas of the value chain? And wouldn't this be a good area for having Quest help us with that?"

You know, some of the CEOs are looking at this as a melting ice cream cone. The assets are going to be less valuable in three to four years than they are today, so why not take the money off the table now and redeploy that capital into something more useful to their strategy?

Protecting Access to Medicare Act

Q: Let's talk about that melting ice cream cone for a moment. We'll start by going back to April 1, 2014, when the Protecting Access to Medicare Act (PAMA) was signed. PAMA is one of those innocuous-sounding acronyms that's actually hugely consequential for your industry. Talk about what PAMA represents, because it's while it is injurious to everybody's economics, it affects the various industry players unevenly.

Rusckowski: So some background: CMS is the largest buyer of laboratory services in the industry. The agency buys about $8 billion in laboratory services, and about 80% of that is regional laboratories, hospital laboratories, or specialty laboratories—Quest and LabCorp represent only about 20% of what CMS buys. And the reason why there is such fragmentation is because the logistics and economics of our central-laboratory model that work really well in densely populated metropolitan areas are less effective the farther away you get, so that's why you need to have laboratories in rural and small-town America. And the cost to serve is quite different in those areas.

So Congress realized that if CMS wasn't controlled, we'd run the risk that CMS will arbitrarily cut the rates, laboratories would close, and Medicare beneficiaries would not have access to critical laboratory testing. So PAMA aimed to address that fear by refreshing how we pay laboratories. The idea was to gather market-based data for the entire marketplace—not just from Quest or LabCorp, but from all the regional laboratories and hospital laboratories—and then pick the volume-adjusted median as the new rate. And there's a wide variation of those rates, with the nationals being the lowest and hospitals being the highest.

But when CMS launched the data collection process—and it was an enormous amount of data, all the codes that are the clinical lab fee schedule, all the rates by commercial payer—the agency restricted who can provide data by a definition called an "applicable laboratory," which allowed smaller laboratories not to report. And then it actually became problematic for hospitals to report the data. So in the end, the vast majority of the data came from the two large nationals, which resulted in the price pointing to the lowest of the low. A clinical lab fee schedule came out in 2017 that puts a 10% cut per year for three years, and the data suggest there will be a tail to that in 2021, which will essentially be about a 40% cut—that essentially cuts the profit on the industry in half.

Q: Which effectively reconfigures the industry.

Rusckowski: Exactly. You don't have to be an economist to realize when you take out half the profit in a very fragmented industry, you're going to have structural change that will benefit the leader, Quest Diagnostics. And yeah, it's part of our strategy to consolidate. But the end consequence of this is that there will be Medicare beneficiaries who eventually won't have access to laboratory services because small operators are not going to be able to stay open.

So we're fighting PAMA: We agree with the principle, but we don't agree with the implementation of it. We're contesting in court that CMS did not properly execute against the intent of Congress, and we've also got legislation on the Hill that would postpone the next data collection process by one year and hire an independent body to look at a better approach to the data collection.

Q: So what I'm hearing is that on one hand, this is definitely a headwind to your own economics. But on the other hand, it's disproportionately harder-hitting on these subscale hospital-owned and independent businesses, which in an ironic twist ends up helping Quest because you're a more attractive partner. Fair characterization?

Rusckowski: Yes, I think so. On the one had of course it's painful because it's real money, right? Our business for Medicare is about a $900 million a year, so this has cost us and our competitor about 10%—about $100 million—a year. So in the short run, it's tough because we have to accept that price haircut and still continue to grow the company and make our margins.

But it's also accelerating health systems' interest around their diagnostic information services strategy. Everyone's saying, "Okay, I get it. I need to start to think about this going forward because I have a melting ice cream cone." So our investment thesis right now is that the short-term is going to be painful, but in the mid- to long-term, there's an opportunity for us to consolidate and become a bigger player and gain share.

Q: Is it possible to generalize, Steve, how sophisticated or knowledgeable health system leaders are about PAMA?  Do they understand the economics of the lab business deeply enough to see the vulnerability that this regulation will cause?

Rusckowski: Two years ago, the vast majority of hospital CEOs didn't know anything about PAMA. But today, I'd say the majority know about it; it might not have a big effect on your hospital finances the first year—just a little signal in the noise—but then you've got the second year and the third year, right? And then there are other factors: Commercial payers are starting to scrutinize ancillary service reimbursement levels. And the consumer is also scrutinizing costs, thinking, "Why am I paying this hospital 10 times what Quest is charging?"

Q: So it's essentially a force multiplier effect: PAMA itself is compromising industry economics, with essentially a 50% cut in profitability. But then the impact gets amplified further with commercial payers scrutinizing the huge pricing variability in the market, and consumers increasingly focused on their own out-of-pocket costs—so a perfect storm of factors that together take this melting ice cream cone and basically microwave it.

Rusckowski: Exactly. First, PAMA: If we ever take out the profit of any industry, you see a structural change. Second, we see all our commercial partners thinking about reducing the variation in health care cost, and they see labs as a big opportunity to take out variation. And finally, it's the consumer, yes, but also the employer, who is the biggest payer in this country. The employers are thinking about what they need to do for themselves, because they're paying for 70% of this, while their employees are screaming about high deductibles and out-of-pocket costs because they're paying for 30%. Those three areas together is a catalyst for transformational change for the industry—and it benefits the leaders, like Quest Diagnostics.

Consumerization

Q: This discussion dovetails closely with what seems to be a key element of your growth strategy: consumerization and retail strategy. I'm particularly curious around the 200-plus retail sites that you have in-flight with Safeway and Walmart.

Rusckowski: So we have five strategies for growth, one of which is to be the most consumer-oriented diagnostic information service company on the planet, which includes the digitization of our whole patient-consumer experience. And what do I mean by that? It means that today, when you walk into a Quest patient service center, you'll see a kiosk, a display, and we have a smart app, MyQuest. And this app allows you to do a number of things, like schedule your appointments in advance, compare wait times at multiple patient service centers, and access test results. And for a nominal fee, we'll look back at our database for anything we might have for you over the last decade. And it already has more than 7.5 million users.

Second, we've come out with a new direct-to-consumer product, QuestDirect, which lets people take at-home tests and then just drop them off at a patient service center. It came from an experiment we did with our joint venture partner Banner Health in Arizona. Now, Arizona allows consumers to get a lab test without a physician's order—actually, this is where Theranos set up shop in a Walgreens. So we gave it a try, and lo and behold, there's a market—people want to check their cholesterol, their A1C and glucose, they want to check for STIs without having to talk to their physicians. And now we've got QuestDirect in 48 states. And as we go forward, that will be the platform for a genetics opportunity as well.

Third, there's the physical access and experience that you get with Quest Diagnostics. We have about 2,200 walk-in patient service centers, but many of those centers were in medical office buildings, which aren't always easy to navigate—you have to find parking, go upstairs, figure out the hallways, etc. So we moved about 25% of those centers to retail-like settings, with a goal to eventually move 50% of them. And that gets to the partnerships you mentioned—to help with this, we're working with retailers. We have clinics in about 150 Safeway stores; we've put patient service centers in nearly 70 Walmart stores, and we continue to build on other retail relationships. And this is important because we meet people where they are: What better place to get your laboratory requisition filled than in a convenient retail location where you're already going in the course of your day-to-day life? And it's big numbers: Walmart sees 100 million Americans per week.

Population health

Q: Let's periscope up and talk more broadly about something we touched briefly on earlier. Lab may represent only 3% of the health care dollar, but it touches at least 70% of downstream care. With this math equation in mind, how are you thinking about deploying your diagnostic insights?  How to inflect the industry at the most urgent macro-level, which is addressing total cost of care?

Rusckowski: To me, the biggest issue in this country is the $3.6 trillion cost of health care. And $2.6 trillion of those costs, the major portion, have nothing to do with hospitals; it's everything outside of the hospital, which means we need to get better at things like managing chronic disease and the high-cost, at-risk portion of the population. And Quest Diagnostics has a lot of data, we see a lot of lives, and we have centers at locations where a high proportion of at-risk populations visit. So we see a big opportunity to help bend the cost curve by helping manage an at-risk population.

For instance, we self-insure 60,000 employees and their dependents, and 5% of that population accounts for 50% of the health care costs. So we're using our data to manage that population—we do a biometrics screening to identify which employees might be moving in the wrong direction, we ask them to opt in, and we help them proactively manage their multi-chronic diseases. And, increasingly, we'll get engaged around social determinants of care. Because we don't just have the data, okay? I know how to light up a logistics workforce. I mean, we already go into people's homes.

You may not be aware, Eric, but we're the market leader for doing at-home medical checkups for life insurance—we go into people's homes to take their weight, get their blood pressure, take their EKG—so there's no reason we couldn't help someone who's managing an at-risk pool get to that population. So for example, we could collaborate with an integrated delivery system in Florida, let's say, where we can identify a population with easy access to a Walmart, so we can monitor their health management. Because a lot of integrated delivery systems are thinking about this—for chronic disease management, but also in terms of discharge planning and readmission rates—but it's hard for them to really get into the population.

So as far as I see, applying diagnostic information services to help bend the cost curve is really our biggest opportunity to help, because we not only have the capabilities and the access, but we can also find those lives with our data. And because of our physical presence—catching the 100 million people walking into Walmart, the smart app, the thousands of patient service centers and physicians' offices—we engage with 50% of the total American population every three years. So we have the visibility and the capabilities to address the problem, right? So let's figure out how we can make a contribution.

Mutual exclusivity

Q: Let's pivot from consumer trends and reimbursement to the more conventional (and arguably more consequential) payer side. Between 2007 and 2018, Quest was in an exclusive contract with Aetna, while your competitor was exclusive with UnitedHealthcare. That all changed in 2019, when both Aetna and United opened up their panels and discontinued the mutual exclusivity. Big structural shift in your sector—how did this come about? What are the implications?

Rusckowski: Well, first of all, when I joined the company in 2012, we were not in-network with UnitedHealthcare or Horizon, and we were out in a number of states with Anthem. So the team and I started working on that, in part by telegraphing to the market that this experiment of commercial insurers having only one large national lab as the preferred lab was not the best strategy for most, with a few exceptions. We thought it would be better to have a level playing field with others and compete on the basis of our value proposition—and that it would be better for the payer and the patients and the physicians to have that choice, too. So we actually said, "Going forward, we would rather be on par with at least one other national."

Now, instead of the single preferred lab, the movement is to choose a handful of select laboratories out of the hundreds and then work proactively on benefit design and work with us to have that handful pick up a larger share of the overall purchasing within that category. So it's not coincidental that when United announced last spring that we're back in-network, that LabCorp is still in-network, or that shortly thereafter, Aetna opened up its network. And that's where we are as we enter 2019; we picked up 43 million new lives between United and Horizon Blue Cross Blue Shield in New Jersey and Anthem in Georgia—which is a big portion of the U.S. insured population.

What payers are working on is what they're spending on laboratory services and what portion of those services they're buying with the two large nationals. And despite what most people think, the minority of what they buy was with the two large nationals. So, in fact, our strategy was not successful in terms of moving more of our laboratory services to the preferred exclusive national. And the movement now is to proactively work on choosing a handful—based upon a set criteria—of laboratories out of the hundreds and then working on benefit design that allows those preferred labs to pick up a larger share of the overall purchasing within set categories. And I would say, Eric, that this is not just a laboratory opportunity; it's an opportunity in general for all health care services. Laboratory services represent the test case for what will be happening in other categories of health care services.

Theranos

Q: I have one digression I'd like to explore—and perhaps you were expecting this—but I have to ask about Theranos. We know now how deeply fraudulent Theranos and Elizabeth Holmes were. But at the time, of course, we were all captivated with the promise of this putative revolutionary technology. So I'm curious for your reflections on this odd chapter in the laboratory sector, and how it echoes more broadly across American health care.

Rusckowski: I'm not going to comment on the technology except to say that its concept of a "lab-on-a-chip" wasn't a new concept.

Theranos also tried to sell the idea of doing 10 or 20 tests on a chip—but we have 3,000 tests. Why would a patient want to test cholesterol and glucose and A1C on the chip when they might need other, more advanced tests that have to go through the laboratory anyhow? And that data still has to be put in someone's EHR, okay? A big part of our value add is interfacing with all those EHRs, and that has to be done independently while you run that laboratory, whether it's a chip or a centralized model.

Q: Absolutely. But do you think the controversy, for better or worse, sort of thrust laboratory diagnostics into the spotlight in a way the industry hadn't been before?

Rusckowski: It did bring a greater level of understanding and visibility around the importance and complexity of what we do. Theranos' founder Elizabeth Holmes talked about how it's important for people to have access to their numbers, and how you shouldn't have to go through a doctor to get those numbers—accessing that information should be an easy, painless, positive experience. And you can't disagree with that, right? A large part of our strategy was going in that direction, so that visibility was helpful as we were trying to simplify and improve the consumer experience.

Looking back and wrapping up

Q: Before we start to wrap up, Steve, I'd like to ask about your personal career path. I understand you weren't always interested in health care—in fact, you originally started as an engineer. What made you shift course?

Rusckowski: That's an interesting question, Eric. As you mentioned, I trained as an engineer at Worcester Polytechnic Institute, and I worked a couple of summers in an engineering company in my home town of Torrington, Connecticut. But after sitting behind drafting boards for a while, I thought, "This is interesting—but what does that guy do down in the corner who's running the division?"

Now, that was the general manager of the division, and I felt like he had an interesting group of people coming and going—salespeople, engineers, etc. I realized I was more interested in the business side of technology. So after I graduated from college, I joined the management development program at Proctor & Gamble, where I was placed in what was essentially a manufacturing facility in Quincy, Massachusetts. And talk about a maturing experience: I was 20 years old and supervising 25 people who are twice my age. But it made me realize that I wasn't just an engineer anymore; I was managing people, budgets, and operations, and I needed to learn about business. So I quit work and went back to school, MIT's Sloan School of Management.

Q: Now if I recall correctly, you joined Hewlett-Packard (HP) after graduation. Did you have an interest in health care at this point, or did something else draw you to HP?

Rusckowski: I joined HP because it was a cool California company focused on technology and innovation; back in the '80s, when I started there, working at HP was sort of like working at Google or Amazon. Now, my goal was to run a business someday, and HP is where I grew up, professionally—a lot of how I run businesses today, how I think about innovation, and how I manage people was really cut in those early days—but I never thought I would get into medicine. But for personal reasons, I wanted to stay in the Boston area, which was where HP had its medical division. So I started working there, and 15 years later, became really the last leader for it.

Wind the clock forward to 1999, and HP's instrumentation business, including the medical division, spun off to create Agilent Technologies. So I saw that business go from $3 billion to $60 billion. So I cut my teeth in the really early days of Silicon Valley. I eventually led the sale of Agilent's health care business to Philips Healthcare, where I was CEO until 2012, at which point I joined Quest Diagnostics.

Q: At what point did health care shift from something incidental about your work—and your focus on innovation—to something vocational?

Rusckowski: I fell in love with health care and medicine because it applied everything I love about innovation to a very complicated field. If you think about two of the most-fertile grounds for innovation, they are defense and health care, and I'd rather apply my skills to health care, doing good for people around the world.

So it became a vocation for me, and I was able to pursue and become a leader of the business. And I'm grateful for that, because I could have applied my skills to a lot of other areas, but I landed in a place—in medtech and health services—where I feel like I'm making a contribution with the gifts I've been given.

Q: Let's conclude our discussion with a final question. As you think back over your 40-year career, what are you most grateful for?

Rusckowski: We never get to where we are without people who helped along the way. And fortunately, I can point back to four or five people I worked with who took a risk and gave me a shot at doing something before I proved myself. And I'm lucky because I was able to thank them, too—I've always been a big proponent of thanking the people who've helped me.

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