Indianapolis-based WellPoint Inc. named the head of a Catholic hospital system as its next CEO.
Joe Swedish, CEO of Michigan-based Trinity Health since December 2004, will replace Angela Braly, who was forced out by angry investors in August. Swedish, 61, will take office March 25.
“He brings to WellPoint an extensive track record leading large, complex health care organizations through diverse challenges in difficult market and regulatory environments, and his experience will be invaluable to WellPoint as we continue to find innovative ways to collaborate with providers in an effort to improve quality outcomes and reduce the cost of care,” Jackie Ward, chairwoman of WellPoint's board, said in a prepared statement.
“Joe’s background, in concert with our management’s insurance market expertise, creates a team uniquely qualified to manage all facets of our evolving health care system,” Ward added.
Swedish helped grow Trinity into the nation's 10th-largest hospital system, with $9 billion in annual revenue. Trinity’s 56,000 employees operate 47 hospitals and 32 long-term care facilities, along with numerous outpatient centers and clinics.
The not-for-profit organization is about to get even bigger. Swedish recently signed a letter of intent to merge with Pennsylvania-based Catholic Health East, which will create the fifth-largest hospital system in the nation, with $13 billion in annual revenue.
Swedish was not among executives widely touted by analysts as likely successors to Braly. Those included Ronald Williams, the retired head of insurer Aetna Inc., and James Carlson, who ran the Medicaid insurer Amerigroup Corp. and engineered the sale of his company last year to WellPoint for $4.9 billion.
“Surprised,” Ana Gupte, a Sanford C. Bernstein & Co. analyst in New York, said in an e-mail to Bloomberg News reacting to Swedish’s hiring. “I have actually not heard of him prior to this. WellPoint is showing a focus on integrated health delivery with this appointment.”
In an interview with IBJ, Swedish pledged to further collaborations between WellPoint and health care providers.
"My arrival is representative of the landscape transforming in health care," he said.
Before leading Trinity, Swedish was CEO of Colorado-based hospital system Centura Health.
As WellPoint's CEO, Swedish will lead the nation's second-largest health insurer, with more than $70 billion in annual revenue.
The company struggled under Braly’s five-year tenure. Its stock generated a negative return of 28 percent, the lowest among the five largest health insurers.
Investors grew frustrated with WellPoint's repeated missing of earnings projections. They also grew to favor WellPoint rival UnitedHealth Group because it seemed better positioned to succeed under the 2010 Patient Protection and Affordable Care Act.
The health reform law will shift growth away from WellPoint’s traditional strengths in the employer-sponsored insurance market and toward government-sponsored health plans. WellPoint is scrambling to retool its business model in response.
Since Braly's departure, WellPoint has been led by interim-CEO John Cannon. Cannon will remain with WellPoint as executive vice president of legal and public affairs.