On January 1, 2013, Rice Powell succeeded Dr. Ben J. Lipps as
Chief Executive Officer (CEO) and Chairman of the Management Board of
Fresenius Medical Care. Rice Powell previously served as Vice Chairman
of the Management Board and Member of the Management Board
responsible for the region North America. In an interview, they both describe
their personal view of ongoing developments at Fresenius Medical Care
as well as the challenges and opportunities arising from these, and why the
Company is well positioned for long-term success in the future.
Dr. Ben J. Lipps
How would you assess the performance
of Fresenius Medical Care in fiscal year 2012?
2012 was a very successful year for Fresenius Medical
Care. We achieved record results yet again – for the
16th year in a row. We continued to expand our strategic
growth initiatives, specifically our global clinic
But more importantly, we are very proud of
the continued progress we are making to promote the
best possible patient care and the highest product
quality, while growing the business profitably and in
line with our values.
It has also been a rewarding year for North America.
We successfully grew our core business and achieved
our key quality goals. We made significant progress
with the integration of the acquired Liberty Dialysis
business and worked through the new U.S. reimbursement
system for dialysis that was introduced in 2011.
We also provided support for our dialysis patients and
fellow employees who were affected by Hurricane
Nevertheless, we can never be complacent about
what we have achieved in the past since we know that
the overall environment will not get any easier. I think
we are very well positioned to meet potential future
challenges and opportunities on the product as well as
on the therapy side of our business.
Dr. Lipps, can you comment on
Fresenius Medical Care’s financial performance
in the past years in more detail?
Since Fresenius Medical Care was founded back in 1996,
we have been able to build our business organically
as well as through acquisitions from about $1 billion
in revenues to very close to $14 billion in 2012. At the
same time, our net income has grown from less than
$100 million to $1.2 billion. But more than that, we have
countless patients in our clinics over the years.
Today, we provide more than 38 million dialysis treatments
a year to nearly 260,000 patients worldwide in
our clinics; that’s about six times as many as in 1996.
Dr. Lipps, you have more
than 40 years of experience in the dialysis industry.
Do you have any personal highlights?
I remember most clearly when – after a number
– we built the first artificial kidney and were
able to treat the first patients. You have to consider
that up to the early 1970 s, kidney failure was a death
sentence. Soon, we were able to increase the life
of patients with the help of dialysis and the
artificial kidney by a month. One month became two,
then years. And of course today, we have thousands of
patients living on dialysis for decades. In the U.S., for
example, we have been able to reduce the mortality
rates in our clinics by 35% in the last ten years. So it
has been a real pleasure for me to see all the efforts in
the industry to improve the quality of life of patients.
Today, products that are used for dialysis really differ in
quality compared with those available when I started. I
am proud to be part of the company that has spearheaded
these advancements for patients.
Mr. Powell, you have been with the Company since 1997,
the past eight years as a member of the
Management Board responsible for North America.
What has stood out from your perspective?
For me, it is the scope of our business and how it is
grown. Throughout its history, Fresenius Medical Care
has been the market leader in an industry that is expected
to carry on growing steadily in the future. One
key reason for this is our vertically integrated company
structure. This means, for instance, that we can
introduce and study new products, therapies and additional
services in our Fresenius Medical Care clinics.
Our own staff there are encouraged to look critically
at new products and give us feedback immediately.
On the one hand, this guarantees very high success
rates for Fresenius
Medical Care, while improving efficiency
in delivering health care on the other.
Dr. Lipps, you handed over chairmanship
to Rice Powell on January 1, 2013.
Is there any advice you would like to give your successor?
First of all, I have to say that I am really proud that
Rice joined Fresenius Medical Care back in 1997. He
has done an excellent job of running our business in
North America. I think Rice and myself, we both share
the same dedication to the quality of care that we
provide to patients, and that has paid off over the
years. So it was a real pleasure for me to pass over
the baton to Rice at the beginning of 2013. I have
confidence in him and in the whole management
team. But we have been working together for over a
decade. So there is no advice I can give him from a
business perspective that he does not already know.
Maybe one personal tip: I have realized over the years
that the quietest time of the day in any office around
the globe is 4:30 in the morning.
Is it true that you yourself hired
Mr. Powell back in 1997?
Absolutely, I still remember the interview. We had
some interesting discussions and, after a short time,
we decided that it would work for both of us and the
Company. I literally locked the door so that he
couldn’t get away, got a contract and Rice signed it
before he left.
Mr. Powell, where do you see the biggest personal
challenges in your new position as CEO?
Obviously, running global operations means that a lot
of responsibilities are being added to my daily schedule.
We are a decentralized vertically integrated company
a global footprint and a very international
management team. I think that sounds like a challenge
itself. Creating trust is a major task – internally
as well as externally – with any kind of CEO transition.
I am very thankful to have such deep support
from my colleague and predecessor Ben Lipps. And
being in the office at 4:30 am certainly sounds like a
challenge for me as a father with two daughters.
And from the Company’s perspective,
where do you see the major
challenges in the years ahead?
Let me give you a couple of examples relating to our
service and our product business. On the service side
of our business, we are, of course, keeping an eye on
how reimbursements develop globally.
In the U.S. we
have already successfully transitioned
to the bundled
reimbursement system. With our main focus on quality
and our vertically integrated company structure,
we have built a solid base to deal with any further
developments in reimbursement schemes. On the
product side, we are paranoid about product quality
– you have to be in the health care industry. We regularly
review our global production management systems
try to identify any irregularities
in the production
process that could cause harm to patients.
Obviously no one can guarantee that there will be no
issues, but I think our strength is that we do everything
we can to eliminate any problem as soon as
possible. Additionally, Fresenius Medical Care
is in a
strong position with a long-standing and proven management
team that has extensive and unique experience
in the global renal industry.
Dr. Lipps, when you look back –
where do you see Fresenius Medical Care’s
I feel blessed to have been part of this industry for
46 years, 13 years of which I served as the CEO of
Medical Care. The tremendous support and
dedication of all our employees in providing the best
care in our more than 3,000 dialysis clinics, along with
the best dialysis products, has allowed our Company
to be highly successful and become a unique global
company. I am so proud of Fresenius Medical Care’s
many achievements over the past years. More than
1.5 million dialysis patients around the world depend
on our life-saving products. Every 0.8 seconds we provide
a dialysis treatment somewhere on the globe,
and over four million people rely on Fresenius Medical
to some degree.
Mr. Powell, what targets have you
set for the years to come?
As we have tried to show with the guiding theme of
this year’s report, we will be focusing on continuity.
That also means we cannot stand still since our environment
is not static. There are so many opportunities
but also challenges to meet in the future and my
goal is to make sure that we are in a position to deal
with them as well as we have in the past, or even
Of course, we give top priority to providing
the best-quality products and services. You cannot be
in the health care business without putting quality
first. Lots of people count on us delivering on our
promises: patients, employees, shareholders. So that
will be a focus of mine, as it has been Ben’s.
Dr. Lipps, what has influenced
you the most during your time as CEO?
I derive my strength from the dedication of our employees.
Some of them have been working with us for
over two decades now and lots of strong relationships
have evolved during that time. Also, as CEO of a
company that is committed to taking care of patients,
you have the opportunity to meet patients who have
managed to survive on dialysis for many years. That is
really satisfying to see. One example I remember very
well was meeting a patient who had been on dialysis
for more than 30 years. I handed over an award created
for patients who are on dialysis that long. Thepatient’s
reaction and his feedback showed me that
all the energy and time we invest as a management
team and as a company is worthwhile.
Mr. Powell, what are you especially looking
forward to as CEO of Fresenius Medical Care?
It is very impressive to see how Fresenius Medical
Care has expanded and in particular to see how many
employees have grown in their work and in their
teams. I am really looking forward to promoting further
growth – for Fresenius Medical Care and for our
employees. I want to be a builder, not a renovator,
and look forward to building or adding new businesses.
Moreover, in the last 15 years and especially
during my time as a Management Board member,
have had the opportunity to meet many people,
mainly in North America. Now, I am really looking
forward to meeting people from all the divisions
worldwide and spending more time understanding
the cultural differences in our businesses.
Mr. Powell, Dr. Lipps,
thank you for the interview.