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Q&A with WellPoint's Next CEO, Joe Swedish

 |  By John Commins  
   February 15, 2013

Trinity Health CEO Joseph R. Swedish this week was named the new CEO of WellPoint Inc., effective March 25. Though Swedish is well known and highly regarded in the hospital sector, a number of health insurance industry analysts reacted with surprise upon hearing the news. Many acknowledged they'd never heard of the executive from Livonia, MI, who will soon lead the nation's second-largest health insurance company.

Swedish spoke with HealthLeaders Media this week about the challenges of the new job. Below is an edited transcript of the conversation. 

HLM: Why did WellPoint pick a hospital executive instead of someone with a more extensive health insurance background?

JS: My sense is that the board, looking at the landscape of the entire industry, came to the conclusion that we are all—and by all I mean providers and payers—exposed to a transformational era that necessitates different kinds of strategic choices, different dialogs occurring in the industry.

 


The payers and providers are going to have to lead the way regarding the health reform agenda. This transformational era specifically relates to what I call this "New Age of Consumerism" that necessitates that we align what the consumers want with access and cost reduction and care that is safer and higher quality. We are going to have to give them the technologies that are necessary to gain that kind of access.

Another area that is critically important is that both providers and payers are now aligning networks. In many cases they are narrow networks that really focus on meeting the agendas of better performance at lower costs. Then you look at the structural changes in healthcare specific to the advancement of exchanges and the new relationships that will be created between provider and payer and that speaks to the dialog being tremendously different, what I call the new story versus old story.

 

The contractual relationships are going to point right at more risk-taking on the part of providers or more engagement by the payers in terms of supporting these new models. The expectation of what I can bring is a different dialog based on my knowledge in the provider sector. Hopefully I can promote the kind of transformation that is necessary to better align those two interests.

HLM: What message does your hiring send to the healthcare industry?

JS: Regardless of the sector, it is all about leadership and the willingness to promote innovative approaches to the transformations that are necessary. The message is pretty loud and clear that we've come upon a new era. And there are organizations that are willing to be bold, and leadership is going to have to transform itself to adapt to this new era, regardless of whether you are a provider or a payer. It truly is a new ball game.

HLM: What are the different challenges posed with running a health system versus running a health insurance company, or are those differences blurring in this new age of integrated care?

JS: The differences are predictable; the metrics, the language, the expectations especially in an investor-owned area that I have taken responsibility for. That in many respects is a significant challenge.

But at its core we have a lot of leaders in both sectors who are very adept at moving with the marketplace. Even at Trinity we hired many people who were 'not traditional' as we were aggressively pursuing the hiring of actual talent. That certainly is a different approach from what we were accustomed to but it does lead to understanding the metrics of our industry, which I think will look radically different in the coming years than traditionally.

On the payer side there are new talents being recruited that better align with the new demands for new technologies and analytics. At its core it is all about leadership... The strength of the leadership is paramount to addressing transformation change. In that regard I don't think we are any different.

HLM: Do you have a specific agenda in mind for your first few months at WellPoint?

JS: It's getting aligned with the team that is in place, getting my bearings regarding the strategic plans that have already been formulated, possibly amending those plans based on a thorough review of what had previously been created, engaging with the marketplace.

Obviously, I have a newfound responsibility to deal with the investment community and the analysts that support our organization. Also, broadly speaking, throughout the United States we have a very significant reach.

One-out-of-nine Americans is insured by WellPoint so we are a far-flung organization. I am going to get to know a lot of people in a lot of markets and try to figure out how best to reintegrate our activities as timely as possible so we can be more efficient and effective.

HLM: It's been suggested that WellPoint is having problems adapting to the tremendous changes in the healthcare market place. Can you provide the push that gets things moving?

JS: It would be presumptuous of me to weigh in on that because I don't know the organization well enough to pass judgment. All payers are looking for the strengths that are necessary to effectively compete and provide better services to their members.

WellPoint is not different. The degree to which they are either ahead or behind I will leave to others to decide. My objective is to assess strategy and recast it if necessary, strengthen it in ways that are necessary, and work with the team to move forward. I like our chances based on what I've seen.

I consider it a very strong organization with a strong foundation that is in a transitional era just like everybody else. The questions are, what are we going to do to reposition ourselves and most importantly can we effectively execute? Beyond that, everything else will fall into place just fine it we can do well on both of those accounts.

HLM: How do you expect to spend your remaining time at Trinity Health?

JS: The good news is there is an incredibly gifted and strong team at Trinity that will carry the responsibilities to new levels of performance. They are very accustomed to achieving. That is a great blessing for the organization that's been formed over many years and one that I am very proud of.

The second point is that I have a lot of hand-offs to administer to new leadership that will come on board and to help support the team in the migration to a new leadership structure. In that regard I have a significant contribution in the governance and management transitions.

I will do what I can regarding some of the recent accomplishments, specifically the consolidation with Catholic Health East. It is of significant importance to me because I have such a command of the process and the transition we envisioned taking place.

There are a lot of moving parts but I'll say it again—it is all about leadership and Trinity has a tremendous leadership team that will carry forward without any hiccups.

HLM: What do you regard as your greatest accomplishments at Trinity?

JS: The organization created a lot of remarkable achievements around its commitment to becoming high performing in both the financial and clinical arenas. Financially it is one of the strongest health systems in the United States. It is recognized by its bond rating, AA, and its year-over-year performance in terms of profitability and cost performance.

Clinically it is a remarkable organization in terms of the pursuit of excellence and promoting quality and safety. The statistics will bear out that it is a safer, higher quality organization than when I arrived eight years ago because of the focus on metrics, the focus on our IT transformation and having unified medical records throughout our organization.

Our integration measures to a large extent have been met. We are taking that to a higher ground as we speak. But obviously we are able to do so because of the foundation that was laid over many years that allowed us to be more unified in our clinical and financial performance.

Finally, the growth of the organization is a remarkable achievement such as our consolidation effort with CHE, our acquisition of other organizations, the entrance into the Chicago marketplace through Loyola University Medical Center and Mercy South in a market where we were not previously engaged. So, those are just a few.

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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