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Analysis

Days After CEO Departs, HCSC CFO Exits As Well

By Jack O'Brien  
   July 29, 2019

Health Care Service Corporation CFO Eric Feldstein had been with the company since 2016.

Days after Health Care Service Corporation (HCSC) President and CEO Paula Steiner announced her departure from the Chicago-based insurer, CFO Eric Feldstein tendered his resignation.

Feldstein resigned from his position shortly after Steiner's exit, according to an S&P Global Ratings bulletin issued Monday afternoon.

Feldstein, who joined the company in May 2016, was named CFO in June of that same year. 

With Feldstein's departure, HCSC has seen two C-suite executives leave the company in less than a week's time.

Related: Health Care Service Corporation President and CEO Paula Steiner Steps Down

Current board member David Lesar will fill in as interim CEO in the wake of Steiner's departure, while Maurice Smith, formerly president of HCSC's Illinois health plan, will serve as president. 

No replacement has been named yet for Feldstein's position.

"We appreciate Eric Feldstein’s contributions in his time as chief financial officer at HCSC, most notably to the company’s financial strength and strong culture of ethics and compliance. We wish him well in the future," an HCSC spokesperson wrote in a statement to HealthLeaders.

S&P stated Steiner and Feldstein's exits may indicate that HCSC is pursuing a strategic shift, though its credit strengths "should persist."

"HCSC has a history of long-tenured senior executives, with deep bench strength supporting the senior management team," S&P wrote. "But, this unexpected leadership change is a departure from its traditionally smooth management transitions."

S&P also noted that HCSC has a "low debt burden," "extremely strong capitalization," and "strong operating performance." This report came despite the insurer's slow expansion into the government insurance space, as it is in line with the market position of the company's peers.

The ratings agency did add that sudden executive exits can often point to "questions about the possibility of deeper problems," citing HCSC's "noticeably silent" press release about the reason for the departures.

"The unexpected changes give us pause because they may indicate a strategic shift for the future of the company," S&P wrote. "However, we don't think there is a 'smoking gun' that is yet to be found."

Editor's note: A previous version of this story imprecisely described the number of positions affected by the recent departures of two HCSC executives. The two departures affected three roles: president, CEO, and CFO. This story has also been updated to include a comment from an HCSC spokesperson.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.


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