WellPoint Reorganize in Interim CEO’s First Major Move
WellPoint Inc. (WLP), the second-biggest U.S. health insurer, will reorganize into four business units in the first major move undertaken by interim Chief Executive Officer John Cannon.
In a memo sent to employees today, Cannon said the changes will help smooth the integration of Amerigroup Corp. (AGP), the insurer Indianapolis-based WellPoint agreed to buy in July for $4.9 billion. The reorganization will put Amerigroup CEO James Carlson in charge of the combined company’s Medicaid business, while Chief Financial Officer Wayne DeVeydt remains in his job, according to the memo obtained by Bloomberg.
The moves follow former CEO Angela Braly’s investor- initiated resignation on Aug. 28, after five years in which the insurer struggled at times to predict medical costs and keep enrollments up. Cannon was named interim CEO, and the board said he wasn’t interested in being the permanent replacement.
“Each business unit will be provided the resources, decision-making authority and direct control over matters that are critical to its success,” Cannon wrote in the memo, confirmed as authentic by Kristin Binns, a spokeswoman.
Separate Medicare and Medicaid divisions will each sell plans for those government-backed insurance programs, according to the memo. A commercial and individual unit will handle sales to large and small employers, individual customers and those buying in the new insurance exchanges created in the federal health-care law. Dental, vision and disability coverage will be under a specialty unit, the memo said.
Carlson will run the Medicaid division, Leeba Lessin the Medicare unit, Lori Beer the specialty unit and Kenneth Goulet the commercial and individual business. Goulet and Carlson have been named by analysts as potential replacements for Braly.
Binns declined to comment on the CEO search.
The reorganization was made “to evaluate and modify our organizational structure so that we are best positioned to take advantage of the tremendous growth opportunities that lie ahead,” she said. “We have the right strategy and the right people in place to ensure that WellPoint will continue to be the most trusted choice for health care consumers.”
WellPoint slipped 1.5 percent to $61.83 at 4 p.m. New York time. The shares have dropped 6.7 percent this year.
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