EDITORIAL: Braly ouster overstates failures

Investors heaped criticism on former WellPoint Inc. CEO Angela Braly and called for her ouster in the weeks leading up to her resignation Aug. 28, but her leadership of the health-insurance giant might not be judged so harshly once the smoke clears.

Braly, 51, was driven out of the post she’d held for five years after company missteps that led to a string of missed earnings estimates and slumping shares, all while rival UnitedHealth Group Inc. was racking up big gains in earnings and stock price.

WellPoint’s board, which had defended Braly against attacks from influential shareholders, ultimately agreed that the time was right for a change in leadership. But lead director Jackie M. Ward noted “our board continues to believe that time will prove the wisdom of potentially transformative actions taken under Angela’s leadership.”

Those moves, designed largely to reposition the company for a post-reform health care system, might have come later than shareholders would have liked, but the deals Braly oversaw likely hold the key to WellPoint’s future success.

Recognizing the shift toward government-funded health plans, she’s been trying to position WellPoint to rely less on selling private insurance to individuals and employers.

This summer, the company announced the $4.9 billion purchase of Virginia-based Amerigroup Corp., which manages publicly funded health programs for 2.7 million Medicare and Medicaid patients. That deal would vault WellPoint past UnitedHealth as the nation’s largest provider of health benefits for low-income Medicaid patients.

Last year, WellPoint paid $800 million for CareMore Group Inc., a California company that ran clinics that catered to Medicare recipients.

Both deals are intended to better position WellPoint to take advantage of the expanded role of Medicaid when the federal health care reform act takes hold next year.

WellPoint also closed on the $900 million purchase of eyewear and contact-lens retailer 1-800 Contacts Inc., part of an effort to diversify into higher-margin businesses.

There have been blunders under Braly’s watch, to be sure—most notably, the repeated mispricing of insurance products, and her public chiding of President Obama during the reform debate—but her stewardship of the company has been mostly positive.

Few people outside WellPoint had heard of her when she burst onto the scene in 2007, replacing longtime chief Larry Glasscock as CEO. She rose from the relative obscurity of serving as the company’s chief attorney to become a leader who shortly thereafter graced the cover of Modern Healthcare magazine and was named by Forbes magazine as the 16th-most-powerful woman in the world.

She took over WellPoint at a time the company’s growth strategy, primarily buying operators of state Blue Cross and Blue Shield plans, had all but run its course. She steered the company in new directions that are likely to pay off long term.

It’s been a rough few months for Braly, but she’s proven herself to be a talented chief executive. Don’t be surprised if her positive reputation leads to another important role soon.•


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