When Joseph R. Swedish was deciding whether to become chief executive of WellPoint Inc. he and his wife sat down with a pad and pen to list reasons why he should go to the troubled health insurer rather than continue leading Catholic hospital operator Trinity Health.
In the hospital category, they listed “unfinished business.” But under the WellPoint heading, Mr. Swedish noted opportunities to “restructure [the] company for success,” and affect the “transformation of [the] nation’s health care.”
Now four months into his stint atop the second-biggest U.S. insurer, Mr. Swedish is working to deliver. It is a tall order for the veteran hospital leader, 62 years old, who hasn’t been an executive at a health plan before. Much of the federal overhaul law goes into effect next year, and WellPoint may be the company with the most at stake. “It’s a revolutionary time in health care,” Mr. Swedish said in an interview. “We’ve got to get this right.”
Indianapolis-based WellPoint has a good shot at ending up with the biggest enrollment of any insurer in the new consumer marketplaces the law is creating. Analysts say around a quarter of its revenue, and a fifth of operating earnings, are tied to the consumer and small-business segments, the types of coverage for which the overhaul is rewriting the rules.
On Wednesday, WellPoint unveiled its second-quarter earnings, with net income up 24% to $800.1 million, or $2.64 per share, in the three months that ended June 30, compared with $643.6 million, or $1.94 per share, a year ago. The result, fueled partly by lower-than-expected medical costs, beat analysts’ projections. Shares slipped 7 cents to $87.44 Wednesday, after a 26% run-up since the day before its first-quarter results came out.
Mr. Swedish has been operating under intense, and often skeptical, scrutiny. His predecessor, Angela Braly, stepped down last August amid pressure from investors displeased with the company’s performance, including earnings shortfalls and public clashes with the Obama administration.
Date: July 24, 2013