Quote-of-the-day mailing list
-------- Original Message --------
Subject: qotd: Where is WellPoint headed?
Date: Wed, 13 Feb 2013 07:11:55 -0800
From: Don McCanne <firstname.lastname@example.org>
To: Quote-of-the-Day <email@example.com>
The Wall Street Journal
February 12, 2013
WellPoint Names New Chief Executive
By Anna Wilde Mathews and Jon Kamp
WellPoint Inc. named Joseph R. Swedish as its new chief executive,
unexpectedly turning to a hospital-industry veteran to lead the
second-largest U.S. health insurer through the challenging
implementation of the health-care overhaul.
Mr. Swedish, 61 years old, will take over as CEO on March 25, the
company said. Since 2004, he has been president and CEO of Trinity
Health, a Catholic operator of 47 hospitals with revenue of around $9
billion last year.
The choice is likely to surprise investors, whose displeasure with
previous WellPoint CEO Angela Braly helped lead to her resignation last
August. Mr. Swedish's career has been spent on the provider side of
health care, and recently at nonprofit institutions, so he isn't a
familiar face for managed-care investors.
Mr. Swedish's hospital experience could be viewed as helpful, but
investors were generally predicting WellPoint would pick a managed-care
veteran, said Thomas Carroll, an analyst at Stifel Nicolaus. "This
individual is completely out of the blue from an investor-expectation
standpoint," he said.
In general, lines between insurers and health-care providers have been
increasingly blurring, and Mr. Swedish said both sides are facing
similar "strategic bets" as the industry changes. Indianapolis-based
WellPoint is already working on collaborations with providers, and he
wants to "accelerate that at a very rapid pace," he said. WellPoint is
expanding the operations of CareMore Health Group, a Medicare plan it
bought that also operates its own care centers, and it has launched an
initiative aimed at paying primary-care doctors more to coordinate
Trinity is a "well-managed health system," with stable operations and a
strong balance sheet, said Kay Sifferman, a vice president at Moody's.
Both Moody's and Standard & Poor's rate Trinity's bonds highly. Before
his announced departure, Mr. Swedish was moving toward consummating a
major combination, with Catholic Health East, that would create the
fifth-largest U.S. hospital system.
WellPoint has said it is planning and investing heavily to ensure it
will have a strong presence on the new health exchanges, as well as
doing extensive consumer research to ensure it crafts products that will
resonate with buyers. "We will continue to progress with what they have
already initiated," Mr. Swedish said. "Quite frankly, I like our chances."
WellPoint includes 14 Blue Cross and Blue Shield plans and has a major
presence in California, often seen as a tough market for health
insurers. The company has "to execute to win," Mr. Swedish said. "We are
all very attentive to that."
Comment: According to The Wall Street Journal, "lines between insurers
and health-care providers have been increasingly blurring," a fact we
already knew. The appointment of a hospital CEO, who is currently
involved in major consolidation efforts, as the new CEO of WellPoint -
the nation's second largest insurer - seems to blur even further the
line between insurers and health care providers.
Health care providers take care of patients. Insurers take care of
business. With consolidation on all fronts, insurers are blending into
the providers. With this new model, the insurer/health care provider is
becoming well positioned to take care of... well... business. And the
patients? As the incoming WellPoint CEO says, the company has "to
execute to win." Isn't there something Freudian about "execute"?