Taking stock of its diversification strategy, the nation's largest health insurer is creating a new enterprise oversight unit, moving around some key leaders and saying goodbye to others, all before a big enrollment push.
UnitedHealth Group, the insurer of 45 million Americans and parent of numerous technology and services businesses, is initiating its most significant management changes since the dawn of health reform.
Gail Boudreaux, UHG executive VP and CEO of UnitedHealthcare, is leaving after six years, while CFO David Wichmann and Optum CEO Larry Renfro join CEO Stephen Hemsley in a new Office of the Chief Executive.
"We are bringing forward the next generation of leaders to work together, over the next five years, to continue diversifying our offerings, advancing our industry-leading technology and data services, elevating our service levels, deepening our collaboration with customers, governments and care providers and innovating around consumers and next stage care provision," said Hemsley. "Since our last meaningful organizational changes, UnitedHealth Group has grown to serve 14 million more people, has $36 billion more in revenues, has added 75,000 employees, while diversifying more deeply in health services and international markets."
Boudreaux led UnitedHealthcare, UHG's eponymous insurance division, through an era of growth and change, meeting all the "performance goals that were set when she joined the company in 2008," Hemsley said. And now, after selling subsidized exchange plans in just five states last year, UnitedHealthcare is making a big bet on the new individual market, selling exchange plans in 23 states for the upcoming 2015 plan year.
By some accounts, Boudreaux was a viable candidate to replace Hemsley, who's eight years older, but nonetheless her tenure still marks her as one of the most powerful women in corporate America.
Boudreaux graduated from Dartmouth University with a psychology degree and a number of records set for the basketball team. After an MBA at Columbia, she spent 20 years at Aetna, then led Blue Cross and Blue Shield of Illinois as president and EVP at parent company HCSC.
By the time Boudreaux came to United in 2008, the Great Recession was upon the country and health reform loomed as pretty much inevitable, threatening legacy insurance companies like United.
Boudreaux helped steer United's insurance business through the turbulence and grow its membership, especially in public payer programs, using strategies analogous to her approach in basketball.
"And just as my teammates in basketball thought about how we could maximize and play to each of our best skills, I now look at my business team and think about everyone's talents, and whether someone needs a new role to perform better," she said in an interview with Forbes. "Health care is very different in New York, say, than in Chicago or Vermont, so we're rolling out different products in different markets. And with change happening so rapidly in business -- and especially in healthcare -- you have to constantly readjust your strategy."
Boudreaux did not reveal her future plans.
"We are deeply grateful for Gail's many contributions to our enterprise, her executive leadership, the focus she brought to local healthcare markets, building our culture and fostering innovation, as well as for her fellowship and counsel," said Hemsley.
UHG's new senior leadership team, the Office of the Chief Executive, will see other top executives pulled in from other divisions.
Wichmann, who held Boudreaux's job prior to becoming CFO, will work as UHG president, with oversight of all UHG businesses and performance. Renfro, who has long-headed the enormously profitable Optum, will remain as Optum CEO and will also be UHG vice chairman, with oversight of "all enterprise strategic relationships, key client relationships and company-wide business growth efforts," the company said.
Ana Gupte, an investment analyst at Leerink, thinks that the changes could be setting up a move to to spin-off Optum, a unit working in everything from corporate wellness to practice management to low-cost hearing aids that has driven much of UHG's revenues and profits.
See also: UnitedHealth Group, 30 years a giant.