UnitedHealth Group, the largest health insurer in the U.S., has announced a shuffle in the upper echelons of its leadership with CEO Stephen Hemsley stepping down and President David Wichmann assuming the role next month.
Helmsley will stay with the company in a newly created role of executive chairman of the UnitedHealth board. Current board chair Richard Burke will become its lead independent director.
“This is the right time for this transition to take place, as the company is performing strongly and has a positive outlook for the foreseeable future, and Dave Wichmann is the right choice to succeed as CEO for that future,” Helmsley said in a statement. “With nearly 20 years of service to the company, Dave has the business and leadership skills, enterprise knowledge and support, broad health care experience, and deep expertise in areas that are critical to our future—especially growth-oriented technology, operations and global markets. He is the right person to lead UnitedHealth Group through the continuing evolution of health care.”
Helmsley was named CEO in 2006, when the company’s annual revenue was $72 billion. In 2016, its net revenue was $184.8 billion, with the company encompassing 70 million members. It has also diversified under his leadership, now owning a pharmacy benefit manager, physician practices and surgery centers.
His tenure has also courted controversy. In 2016, it was among the first major insurers to withdraw from many Affordable Care Act exchanges, citing $650 million in projected losses from the marketplace business in 2015, an exit which has been equaled by several other national carriers. More recently, the company has been served with several lawsuits alleging it improperly collected billions through a Medicare Advantage fraud scheme.
Those allegations of fraud deal with MA risk adjustments which the new CEO, Wichmann, would’ve been required to either sign or delegate responsibility for signing in his role as CFO, a position he held from 2011 until being named president last year. He’s been with the company since 1998.
“Helping to guide this enterprise, with its extraordinary people, purpose and capabilities, is a distinct yet humbling honor,” Wichmann said. “Health care will continue to change, but this is an enterprise built for change: innovative, adaptable and consumer-centric.”