Trinity Health CEO Moves To Top Post At WellPoint
Indianapolis-based insurance giant WellPoint, Inc. has named the head of the non-profit hospital operator Trinity Health as its new chief executive officer, filling a vacancy at the company that has lingered for the better part of six months.
The 61-year-old Joseph R. Swedish will assume the reins at WellPoint on March 25. He replaces Angela Braly, who stepped down last August after investor pressure following a lag in the company's earnings and stock price and criticism leveled at some deals engineered during her tenure.
Swedish, who initially trained as a hospital administrator, had spent virtually his entire career until now on the provider side. He has been low-key and fairly accessible to the media – he gave multiple interviews immediately after WellPoint publicized its decision – and has been meticulous in expressing the strategic visions for the companies he has helmed.
Swedish has been CEO at the Livonia, Mich.-based based Trinity since late 2004, and has been noted for wringing revenues from the 37 hospitals it operates in eight states. He nearly doubled Trinity's revenue from $5 billion to $9 billion, and more than doubled profit margins.
Trinity engineered one notable deal during Swedish's tenure: The acquisition of Loyola Medical Center in Chicago in 2011. It is also in the midst of trying to complete a deal with Catholic Healthcare East that would bump its total hospitals to 79 and make it the third-largest hospital operator in the nation (it is currently 10th largest). Swedish said such deals were required in order for providers to achieve the necessary scale to survive in a post-reform business climate.
Prior to joining Trinity, Swedish had spent several years as the CEO of Centura Health, a regional system headquartered in Colorado.
WellPoint, which undertook a national search for Braly's replacement, indicated that Swedish's savvy growing numbers and executing deals made him the top choice to become her successor.
“In 24 years as a CEO, he has had tremendous success growing and advancing healthcare systems by improving core operations, initiating financial restructurings, and expertly integrating strategic mergers and acquisitions,” said Jackie Ward, who chairs WellPoint's board of directors. “He is an agile leader at a time when major transformations are requiring health benefit companies to examine new ways to better serve our stakeholders.”
In a statement, Swedish observed that “I have a strong sense of the market in which the company operates and I am energized by the dynamic changes currently taking place in the industry. I'm committed to ensuring that WellPoint remains a market leader, and I look forward to working with my new colleagues to profitably grow and enhance this organization in a changing market environment.”
Analysts seemed fairly pleased with the appointment of Swedish, even though he has never helmed a for-profit organization.
“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,” Tim Nelson, analyst with Nuveen Asset Management, told the wire service Reuters.
One of the top contenders for the CEO job within WellPoint, former Amerigroup CEO James Carlson, announced his departure shortly after Swedish's appointment was announced.
WellPoint acquired Amerigroup last July for $4.3 billion – roughly a 43% premium to its share price at the time. Braly's departure came just weeks after. WellPoint Chair Ward said back in August “that time will prove the wisdom of potentially transformative actions taken under Angela’s leadership.” Along with the Amerigroup deal, Braly also pulled the trigger on the acquisition of CareMore, a Medicare Advantage plan in California, and 1-800-Contacts, a national provider of optical services. The latter deal drew fire for being too ancillary to the company's primary mission as an insurer. Braly also sold the company's pharmacy benefit management arm to Express Scripts.
An attorney by training, the 51-year-old Braly had headed up WellPoint's public affairs division before she was appointed CEO in 2007 – a job that made her one of the highest-ranking woman executives in healthcare.
Yet despite having been lauded for burnishing the company's image before becoming CEO, Braly's politically charged and often combative testimony in front of Congress in February 2010 regarding the company's planned double-digit premium hikes in California was widely credited with creating enough momentum for the passage of the Affordable Care Act the following month. She has kept a low profile since her departure.
Also leaving WellPoint is James Carlson, the former Amerigroup CEO who had been considered the leading candidate to replace Braly inside the company. His departure was announced three days after Swedish's appointment.
John Cannon, who had been WellPoint's acting CEO, will stay with the company as executive vice president in charge of legal and public affairs – Braly's position prior to her elevation to the top job.
Meanwhile, Trinity named board member Larry Warren as its interim CEO. Warren had previously served as CEO of Howard University Medical Center and the University of Michigan Hospital.
