The new CEO of HealthNow New York said he wasn’t looking to leave his sunny Southern California job but was lured to Buffalo by the company’s market position, size, financial strength and the power of the BlueCross BlueShield brand.
The Buffalo-based parent of BlueCross BlueShield of Western New York on Tuesday introduced David W. Anderson as its new president and chief executive officer.
Currently the top executive at a Southern California health insurer, Anderson succeeds the retiring Alphonso O’Neil-White at the helm of the Buffalo Niagara region’s largest health insurance company.
In an interview at the company’s West Genesee Street headquarters, Anderson said he brings an outsider’s perspective and new vision to the company and the market as the federal health care overhaul takes hold. He said it is too soon to lay out any specific plans or changes.
“I’m just getting started and getting to know the team,” said the new CEO, who was introduced to company executives and employees Tuesday.
He cited the nonprofit company’s “significant market share” as an attractive feature of the company. “Its success in the future will be delivered from a position of strength, so there’s a lot here that’s really attractive,” Anderson said.
And he said he expects the insurer to benefit from his experience working in a highly competitive market.
Anderson, 59, will take the reins at HealthNow on July 31 after a five-month search to find a successor to O’Neil-White, who announced his plans to retire in February after 10 years as CEO – the longest tenure in that position in the company’s 76-year history.
Health insurance rates have continued to rise each year, faster than the rate of inflation, angering many consumers and prompting state lawmakers to reinstitute the power for state regulators to approve rates in advance. Last year, the state approved increases that averaged 9.6 percent for all HealthNow plans for this year, including 6.8 percent for HMO plans and 11 percent for indemnity plans.
Company spokeswoman Julie R. Snyder would not disclose Anderson’s total compensation, which includes both salary and “at-risk” bonus and other pay, but said his “base salary is in a comparable but lower range than Alphonso,” who received $872,000 in salary last year but a lower bonus than in two prior years.
The board unanimously backed the choice of Anderson after a national search that considered hundreds of applicants and recruits, including internal candidates, said Thomas J. Hook, HealthNow’s chairman.
A committee of the board worked with New York City recruiting firm Russell Reynolds Associates to identify, contact and screen candidates. The pool was scrubbed further to “about a half a dozen” finalists, including both men and women, and minorities, from both inside and outside the company, he said.
Eventually, it came down to two external candidates, including Anderson. “Our board set out to find the best possible CEO for HealthNow, and we’re certain we did,” Hook said in a statement. “David will impress our markets with his health care experience, the communities we serve with his Midwest values and work ethic, and our members with how we will all manage the change that’s coming in American health care.”
Snyder said that much of the transition has already occurred but that O’Neil-White will remain at HealthNow until the end of the month. He has indicated that he will stay active in the community, which Hook said will also be expected of Anderson.
“That’s very important, because at HealthNow, we value that,” Hook said, adding that the “ability to connect with the community, build relationships and keep outreach strong” were important factors in selecting him. “It is a significant requirement for the position to be able to do that effectively.”
Anderson joins HealthNow from UnitedHealthcare’s Southern California Region health plan, where he spent the last seven years as CEO of the subsidiary of Minneapolis-based UnitedHealth Group. He was also senior vice president of the parent company’s Western Region. During his tenure there, Anderson inherited a plan that, in 2008, was plagued by membership losses and weakening financial performance, and took steps to stabilize membership and improve the plan’s profits.
At Southern California Health Plan – which has 868,000 members, 2,700 employees and about $3 billion in revenues – operating profits jumped by 43 percent from 2010 to 2012.
HealthNow, with more than 800,000 members, 2,300 employees and $2.5 billion in revenues last year, is slightly smaller than Southern California Health Plan. Besides the Western New York plan, HealthNow also owns BlueShield of Northeastern New York in Albany, Brokerage Concepts in King of Prussia, Pa., and HealthNow Administrative Services, a national third-party administrator with offices in California.
Anderson, a native of Fort Wayne, Ind., started his career in 1980 as a broker in San Diego, after graduating from Indiana University with a finance degree. He was president of Health Net Dental and Vision Cos. from 2000 to 2002; senior vice president at Health Net Life Insurance Co. from 2001 to 2003; and senior vice president and chief sales officer for Health Net of California from 2003 to 2006.