By Caroline Humer and Susan Kelly
Feb 12 WellPoint Inc named Joseph
Swedish, the top executive in a large non-profit hospital
system, as the health insurer's new chief executive officer
after a half-year search that began when former CEO Angela Braly
abruptly stepped down in August.
The No.2 U.S. health insurer faces a challenging year in
healthcare reform as the Affordable Care Act brings more changes
in 2014, including the introduction of electronic marketplaces
where insurers will sell directly to consumers.
Insurers like WellPoint and hospitals already have been
struggling with some of the vast changes the law has brought,
such as new taxes and payment methods for government insurance
like Medicare and Medicaid.
As CEO of Trinity Health, a not-for-profit hospital group
that also had an insurance business, Swedish said that he had
experience with both hospitals and insurers.
"The tradition of separation of the two sectors is rapidly
closing. That gap is at times, I think, going to become very,
very minimal," Swedish said in an interview.
"There's absolutely no doubt that there's a convergence
happening on many fronts in healthcare," he said.
WellPoint, which sells health insurance as Blue Cross Blue
Shield, holds the No. 2 spot in the United States behind
UnitedHealth Group Inc. WellPoint's former CEO Angela Bray, an
outsider who took the role in 2007, stepped down in August under
pressure from investors who were unhappy with the company's
Since then, the company has been run by interim CEO John
Cannon, and Swedish will take over March 25.
After missing analysts' estimates in four consecutive
quarters, the health insurer last month reported
better-than-expected revenue in the fourth quarter, with Cannon
at the helm.
Swedish brings a new perspective to WellPoint and the
challenges the healthcare industry faces as it moves toward a
model in which providers are rewarded for improving patient
outcomes rather than performing more procedures, said Tim
Nelson, analyst with Nuveen Asset Management, which does not own
"He looks well-qualified. The healthcare industry is
integrating. The accountable care organization of the future is
a combination of an insurance company and a provider network of
hospitals," Nelson said.