May 24–Highmark Inc. has its third CEO in just over two years, which could signal problems for the state’s largest health insurer as it faces major disruption to its business when a contract with rival UPMC ends on Dec. 31.
But J. Robert Baum, Highmark’s board chairman, doesn’t see it that way.
In an interview with the Tribune-Review on Friday, Baum said the nonprofit company’s strategies to grow its insurance business and develop a viable hospital network to compete against UPMC are working, have not changed and will produce stronger growth under the leadership of CEO David Holmberg, who took over this week.
“To the contrary,” Baum said. “Since the change (to Holmberg) was inspired by a need to accelerate the strategies we already have in place, it’s a great signal of stability.”
Baum declined to discuss the reasons behind the board’s vote this week to dismiss William Winkenwerder after he served for less than two years as CEO.
Baum said Holmberg, who joined Highmark in 2007 and most recently ran the company’s for-profit subsidiaries in vision, dental and stop-loss insurance, would “accelerate” the board’s strategies by focusing on the needs of insurance subscribers and medical patients.
“David’s experience with retail and the consumer focus is really responsive to what is happening in the health care market now,” Baum said.
Holmberg will work closely with other experienced Highmark executives — such as Deborah Rice-Johnson, president of the company’s health insurance plans, and John Paul, CEO of Allegheny Health Network, the Highmark-owned hospital system that was established last year — on integrating the company, Baum said.
“I don’t see changes coming” to other Highmark executive positions, Baum said. “They are a very impressive team.”
At the end of this year, Highmark’s reimbursement contract with UPMC expires, which will place the largest network of hospitals and doctors in Western Pennsylvania out-of-network for Highmark members.
The pending change means risk for Highmark insurance subscribers leaving forUPMC Health Plan or one of three national carriers offering full in-network access to UPMC. They are Aetna Inc., Cigna Corp. and United Healthcare.
At the same time, Allegheny Health Network is trying to shore up its system financially and expand medical services to handle an influx of Highmark patients.
The network announced a cancer treatment partnership this year with Johns Hopkins in Baltimore. And Highmark’s long-running financial losses are easing.
“We’re on a path of having operating gains” at Allegheny Health Network, Baum said. “John Paul has really turned that organization.”
Date: May 24, 2014