At a certain point large companies realize they can’t be any more dominant in their industries. Microsoft can’t exercise much more control over the personal computer world, and with 28 million medical members across the country, WellPoint can’t control much more of the health insurance market. In order to keep growing, the company is trying to identify the next mega-trends in business. It is imagining a future where it is commercializing health insurance in the developing world, controlling the latest financial sector technology, developing a new hotel concept across the country and any number of other hypothetical situations. The company has charged Denny Weinberg with scouring the world’s business landscape to see where the biggest ideas are coming from and how to get WellPoint involved in their development. They’ve created Arcus, a new business development division, and placed Weinberg at the head of it at the company’s offices in Camarillo. Eight years from now, Weinberg is going to report back to the parent company to lay out ideas that will prove to be worth billions. Weinberg was reluctant to share specifics about what Arcus is planning, but one of the company’s first orders of business has been to partner with Dole in building and operating the Four Seasons Hotel Westlake Village Wellness Center and Spa, a business model which Weinberg expects to see duplicated across the country. Question: How did Arcus form and how did you end up as chief executive officer? Answer: The history goes back almost four years now. When you’re a company getting bigger and bigger and the industry is slowly consolidating, smart companies start thinking in the long-term five, 10 and 15 years out. I’d been with the company for 18 years in areas that were turnarounds, or starting up new products. Leonard (Schaeffer) came to me and said ‘set aside everything you’re doing and go off for a year and figure out what we need to do to diversify the company and bring it beyond health insurance.’ He said we’re looking for the horizon beyond what we’re doing today. The second thing he told me was that we had 10 years to develop our ideas, and at the end of the tenth year it had to be a multi-billion dollar set of ideas. The third thing he said was that we would have no limitations, and that we would take a year to figure out what we’re going to do. Q: How has the company developed so far? A: Well, now we have only eight years left instead of 10, our bogey is 2013. We’ve gone from 80 really good business ideas down to 14 very well articulated business plans into three final business clusters. We’ve made investments and hired a leadership team, a terrific group of people from every industry. The three sectors left are Arcus HealthyLiving Services, Arcus Financial Services and Arcus Worldwide Services. In the healthy living space, one of the three investment spaces is the destination business. One of the most visible things we’re doing is this project with Dole that we announced over a year ago. The pilot launched in partnership with Dole Nutrition Institute and the California Health and Longevity Institute is a huge piece of business all by itself. Eventually I think we’ll have a public launch of a set of destination businesses. Q: Can you share any other business deals that Arcus has completed? A: We started another project recently, but it’s now being operated by WellPoint instead of Arcus. We bought a very small company in the outcomes research business, and reorganized it so it can have access to the data created by 15 different health plans around the country. This will allow clinical studies, both pre-FDA and post-FDA, to be assembled and managed much more quickly, which is a breakthrough. You hear on the radio and see in newspaper billboards these ads for clinical trials in California, telling people if they’re interested to call this number to be part of the trial. The reality of the situation is that’s very inefficient and expensive, you get calls from people across the country and it can take a very long time to fill a study. Health plans can find ideal candidates because they have relationships with physicians who understand their patients and can communicate with health plans to collect people interested in studies. Q: Can you give some insight into the areas that Arcus is going to explore in coming years? A: We’re thinking of the most exciting business changes, like the way that the home mortgage business changed over the last couple of decades, where the biggest banks in the country created something very unique and service oriented. In finance, credit cards have grown from having a huge amount of loss associated with them because of fraud, but there is an increasingly large number of technology companies creating a very unique artificial intelligence, there’s a huge business around this. In health care you have our private insurance system, and then you have government systems in places like England and Canada, and there are huge numbers of people in other parts of the world without coverage. We look at that as an emerging market, think about the changing dynamics in China, throughout Asia and Eastern Europe. The world of commerce is so multi-faceted, it’s not like the old conglomerate model anymore, we need to develop partnerships with important companies. As we look across various industries we’re saying ‘here’s a company that we need to talk to.’
