Humana Inc., one of the largest private health insurers and managed care organizations in the country has named McKesson executive Bruce D. Broussard as president and announced a succession plan that would see Broussard ascend to CEO at the retirement of current Chairman and CEO Mike McCallister, expected in the next 12 to 18 months.
Broussard, is currently CEO of McKesson Specialty Health, a $9 billion subsidiary of McKesson Inc., that was created from the merger of McKesson Specialty and US Oncology in December 2010. At US Oncology, Broussard was chairman and CEO prior to the McKesson acquisition.
"As part of Humana's long-term succession planning process, this step has been under consideration by the Board of Directors for more than a year," McCallister said in a press release. "Bruce Broussard brings significant CEO experience in the health industry to Humana along with superb operational and financial leadership skills. I'm confident he will prove to be a leader that continues and enhances the success we've had over the past decade."
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McCallister, has spent the past 12 years as McKesson CEO and was named chairman in 2010.
"Mike McCallister has been one of the most successful CEOs in managed care during his 12 years leading the company and oversaw (Humana's) rapid expansion in the Medicare managed care market," said Deutsche Bank analyst Scott Fidel in a note to investors. "Over the past 12 years with McCallister as CEO, (Humana) has nearly quadrupled annual revenues from $10B in 1999 to $37B in 2011E. The performance has been even more impressive on the earnings front, with EBITDA expected to have grown over eight-fold to $2.6B in 2011 from the $326M reported in 1999."
Kurt Hilzinger, the lead independent director on Humana's board echoed these thoughts: "Mike's leadership has been extraordinary. The company's most recent fiscal year was the strongest in its 50-year history as measured by revenues, net income and health-plan membership. We are pleased that Mike's energy, skill and visionary thinking will be with the company as CEO during a thoughtful transition period."
To further aid in the leadership transition, Humana announced that 22-year Humana veteran and current COO James E. Murray was named executive vice president and COO. Next month Murray will join Broussard and McCallister in the newly created Office of the Chairman, a management team tasked with guiding the company through the leadership transition.
"Jim has been an absolutely stellar creator and steward of Humana's growth over the past two decades," McCallister said. "He and Bruce bring complementary skills and unmatched experience to the Office of the Chairman. We will work collaboratively on issues of long-term importance to our stakeholders, including our associates, customers, shareholders and the communities we serve."
Humana is one of the leading MCOs in the country and counts more than 10 million members across the country. More than 70 percent of its business is focused in the government sector in the Medicare, Medicaid and TRICARE programs. The company also has more than 7 million members enrolled in its dental, vision and other supplemental benefits programs.