2 CEOs who are shaking up healthcare: 10 things to know

Ayla Ellison (Twitter) - Print  | 

Few stories in the healthcare industry have gotten as much national attention recently as news that four of the biggest health insurers in the U.S. are merging into two. If the two proposed transactions receive regulatory approval, Aetna and Anthem will become even more dominant forces than they already are.

The first major transaction, which was announced in early July, would involve Aetna taking over Humana. The two organizations signed a definitive agreement, and the deal, which is valued at $37 billion, now requires regulatory approval. Under the agreement, Humana stockholders will receive $125 in cash and 0.8375 Aetna common shares for each Humana share.

The second transaction involves Anthem acquiring rival health insurer Cigna. The cash and stock transaction, which was announced in July, is valued at $54.2 billion. Under the deal, Cigna stockholders will receive $103.40 cash and 0.5152 Anthem common shares for each Cigna share.

Aetna Chairman and CEO Mark Bertolini and Anthem CEO Joseph Swedish are the faces behind these major transactions that are shaking up the industry, and here are 10 things to know about these two leaders.

Mark Bertolini
1. Mr. Bertolini joined Aetna in 2003 and began serving as the company's CEO in November 2010. He took on the additional role of chairman of Aetna in April 2011 after his predecessor Ronald A. Williams retired.  

2. A big fan of social media, Mr. Bertolini describes himself as a "devoted father, rabid hockey fan, avid skier and dog lover" on his Twitter profile. He frequently uses social media to communicate with the public, including his 11,000 Twitter followers.

3. Aetna has grown under Mr. Bertolini's leadership, with its annual revenue growing to $57.9 billion in fiscal year 2014, a 23 percent increase over the year prior. The company has also grown its membership. Aetna's medical membership grew to more than 23.5 million in 2014, up from approximately 1.4 million members in 2013. Once the Aetna-Humana deal is complete, the combined company is expected to have more than 33 million medical members.

4. Mr. Bertolini has made many strategic decisions since he became CEO of Aetna. In January, under Mr. Bertolini's guidance, Aetna set its wage floor to $16 an hour for its lowest paid employees, boosting its employees' incomes by as much as 33 percent. The wage increase was expected to cost Aetna $26 million annually, but Mr. Bertolini predicted the higher wages will allow Aetna to offset some costs by reducing the $120 million spent on employee turnover-related costs each year.

5. Although Aetna's acquisition of Humana is expected to face strict antitrust scrutiny, Mr. Bertolini believes the deal will pass antitrust review, allowing the transaction to close in the second half of 2016. "We took a conservative view of what we would need to divest," Mr. Bertolini said during an investor conference call in July, according to Reuters. "We believe that given the legal advice we have…that this is a very manageable transaction."

Joseph Swedish
1. Before arriving at Anthem in 2013, which went by the name WellPoint at that time, Mr. Swedish spent his entire career running hospital companies. He previously served as president and CEO of Livonia, Mich.-based Trinity Health.

2. Mr. Swedish doesn't shy away from making bold decisions, and it was under his leadership that the company changed its name from WellPoint to Anthem. Regarding the decision, Mr. Swedish said, "As consumer engagement is heightened, we recognize that brand — an indicator of trust and a predictor of willingness to engage — is going to be of increasing importance."

3. Under Mr. Swedish's leadership, Anthem has taken a number of steps to ensure its future success and diversify itself to remain a dominant insurer. He knows it takes a lot more than offering insurance for his company to be successful, and in 2014 he told The New York Times, "If we position ourselves simply as an insurance company, we are going to fail." One of the ways the company has diversified itself is by offering telemedicine services.

4. The company has had financial success under Mr. Swedish's leadership. Anthem recently reported its revenue increased to $20.2 billion in the second quarter of fiscal year 2015, up 8.3 percent from the same period of 2014. Anthem ended the second quarter of FY 2015 with net income of $859.1 million, up from $731.1 million for the same period a year ago.

5. Outside of healthcare, one of Mr. Swedish's passions is fly fishing. In fact, a giant tarpon once dragged Mr. Swedish for about two miles before the CEO was able to reel in the 135-pound fish, according to The Wall Street Journal.

More articles on healthcare executives:

Former CFO of Chicago hospital sentenced to 1 year in prison
21 latest hospital, health system CEO moves
Former Chicago hospital CEO sentenced to 4 1/2 years in prison



© Copyright ASC COMMUNICATIONS 2021. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.