Anthem CEO Joseph Swedish to Step Down

Gail Boudreaux, a former UHC executive, is expected to succeed Mr. Swedish

Anthem Inc.’s Chief Executive Joseph R. Swedish will step down, and the insurance giant will name veteran managed-care executive Gail K. Boudreaux as its next leader, according to people with knowledge of the matter.

It wasn’t immediately clear how quickly the transition will occur, but the plan is expected to be announced as soon as next week, the people said. Mr. Swedish is expected to keep his title as chairman for a transition period, one of the people said.

Ms. Boudreaux is well-known among managed-care investors, previously serving as chief executive of the biggest U.S. health insurer, the insurance arm of UnitedHealth Group Inc. She is regarded as a strong operator, and she has experience overseeing Blue Cross Blue Shield plans like those that Anthem operates.

Anthem, the second-biggest health insurer, had revenue of around $84.9 billion last year.

Mr. Swedish, 66, would be leaving after his signature strategic effort, Anthem’s $48 billion bid to buy Cigna Corp. ran aground earlier this year. However, since the beginning of the year, Anthem shares have risen by 47%, amid strong results across the health-insurance sector and Anthem’s announced pullback from the Affordable Care Act exchange business.

Anthem and Cigna are currently suing each other for billions of dollars in damages. The litigation focuses partly on the CEOs’ actions and words over the years, as the two insurers were negotiating and then trying to consummate their deal.

Anthem remains locked in litigation with its current pharmacy-benefit manager, Express Scripts Holdings Inc., with Anthem alleging that Express overcharged for drugs. Express has denied the allegations and made its own counterclaims.

Mr. Swedish unveiled a plan last month for Anthem to start its own pharmacy-benefit manager, to be serviced by CVS Health Corp. A little over a week later, The Wall Street Journal reported that CVS was in talks to take over Aetna Inc., an Anthem rival. Anthem factored in the possibility that CVS might buy another insurer in structuring its contract with the drugstore giant, according to a person with knowledge of the matter. The new PBM is slated to launch in 2020, after the end of Anthem’s current contract with Express Scripts.

Mr. Swedish also made the call for Anthem to pull back in the ACA’s exchanges in most of its markets amid uncertainty in the business. The law’s marketplaces were once expected to be an engine of growth for the company. But Anthem has retained a bigger foot print than other big national insurers such as Aetna. Anthem has projected that next year its enrollment in ACA plans will drop by around 70%, but it said the business is expected to be profitable in 2018, after break-even results in this year.

As always, ADVOCATE will keep you up to date on this and all issues impacting radiology as they become available.

Best regards,
Kirk Reinitz, CPA