Aetna Announces Leadership Changes in Line with Growth Strategy
Joseph M. Zubretsky, Shawn M. Guertin, Karen S. Rohan Appointed to New Roles
HARTFORD, Conn.--(BUSINESS WIRE)-- Aetna (NYSE: AET) today announced changes to its executive leadership team as part of the company's growth strategy and a continuing effort to align its businesses with the evolving needs of its customers. These new roles will report directly to Chairman, CEO and President Mark T. Bertolini.
Joseph M. Zubretsky, senior executive vice president and chief financial officer, will lead National Businesses, a new organization that includes Aetna's National Accounts business, as well as Aetna's emerging businesses, including Accountable Care Solutions, ActiveHealth Solutions, Medicity and iTriage. The organization Zubretsky will lead also includes Aetna's national network contracting and care management areas; Aetna's Specialty Products, including Behavioral Health, Pharmacy and Worker's Compensation; and Enterprise Strategy and Corporate Development.
As part of the planned management transition, Zubretsky will be succeeded in his role as chief financial officer by Shawn M. Guertin, effective February 25, 2013. Guertin has most recently been Aetna's head of Business Segment Finance, where he managed the finance organizations of all of Aetna's businesses. Prior to joining Aetna in 2011, Guertin served for nearly five years as executive vice president, chief financial officer and treasurer of Coventry Health Care, Inc.
Karen S. Rohan, executive vice president, also will assume a newly created position leading Aetna's Local and Regional Businesses. Rohan's responsibilities will include leadership of the company's Individual, Small Group and Middle Market businesses; its field organization, including regional alignment to customers; its local network strategy, regional sales and distribution infrastructure; and its Group businesses. Rohan will continue to lead Aetna's integration efforts for its proposed acquisition of Coventry, which is expected to close in mid-2013.
"The management changes we are making ensure that we have Aetna's strongest leaders focused on driving our growth strategy across our core and emerging businesses," said Bertolini. "We have a unique opportunity to drive positive change in the health care marketplace by fundamentally changing the relationship between health plans, providers and patients to one focused on improving the quality of care as a way to reduce costs. Aligning Aetna's Accountable Care Solutions, care management and national network organizations and our flagship National Accounts business strengthens our ability to move decisively toward that goal. Joe Zubretsky is the right leader to take this effort forward.
"After nearly two years of strong performance in senior financial roles at Aetna and with his in-depth knowledge of Coventry, Shawn Guertin is well prepared to step into the role of chief financial officer," Bertolini said.
Bertolini added: "Our proposed acquisition of Coventry also represents a strong opportunity for Aetna to create long-term shareholder value. In order to successfully integrate Coventry, we need to take advantage of the best of both organizations. And in part that means getting decision making much closer to the customer, by empowering and strengthening our regional businesses. Combining these responsibilities under Karen Rohan will help drive that result."
After 26 years in the industry and 20 years at Aetna, Frank McCauley will be retiring from Aetna later this year. McCauley has been a distinguished leader, beginning his career in the company's Medicare business and moving on to successfully lead a wide variety of regional and national businesses to profitable growth. Most recently, he served as a member of Aetna's executive committee and led Aetna's Commercial businesses, including National Accounts, Individual, Small Group and Middle Markets.
"Frank and I have worked closely for eight years, and many Aetna successes can be attributed to his efforts," Bertolini said. "He is respected by our leadership team and employees across the organization. Until his retirement, Frank will work with me on a number of initiatives, including preparing the company for health reform. We wish him the best in his future endeavors."
Aetna is one of the nation's leading diversified health care benefits companies, serving approximately 37.3 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, and medical management capabilities, Medicaid health care management services and health information technology services. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers, governmental units, government-sponsored plans, labor groups and expatriates. For more information, see www.aetna.com.
CAUTIONARY STATEMENT; ADDITIONAL INFORMATION -- -- Certain information in this press release is forward-looking, including our projections as to the impact of the management changes described in this press release on us and our businesses; our ability to change relationships in the health care marketplace; the impact of our proposed acquisition of Coventry Health Care, Inc. ("Coventry") on long-term shareholder value; and our ability to successfully integrate Coventry following the completion of the proposed acquisition. Forward-looking information is based on management's estimates, assumptions and projections, and is subject to significant uncertainties and other factors, many of which are beyond Aetna's control. Important risk factors could cause actual future results and other future events to differ materially from those currently estimated by management, including, but not limited to: the implementation of health care reform legislation; the timing to consummate the proposed acquisition of Coventry and the proposed sale of our Missouri Medicaid business ("Missouri Care"); the risk that a condition to closing the proposed acquisition or proposed sale may not be satisfied; the risk that a regulatory approval for the proposed acquisition of Coventry or the proposed sale of Missouri Care is delayed, is not obtained or is subject to conditions that are not anticipated; our ability to achieve the synergies and value creation contemplated by the proposed acquisition; our ability to promptly and effectively integrate Coventry's businesses; the diversion of management time on acquisition or sale related issues; and changes in Aetna's future cash requirements, capital requirements, results of operations, financial condition and/or cash flows. Health care reform will significantly impact our business operations and financial results, including our medical benefit ratios. Components of the legislation will be phased in over the next several years, and we will be required to dedicate material resources and incur material expenses during that time to implement health care reform. Many significant parts of the legislation, including health insurance exchanges, Medicaid expansion, the scope of "essential benefits," employer penalties and the implementation of minimum medical loss ratios, require further guidance and clarification at both the federal level and/or in the form of regulations and actions by state legislatures to implement the law. In addition, pending efforts in the U.S. Congress to amend or restrict funding for various aspects of health care reform, and the possibility of additional litigation challenging aspects of the law continue to create additional uncertainty about the ultimate impact of health care reform. As a result, many of the impacts of health care reform will not be known for the next several years. Other important risk factors include: adverse and less predictable economic conditions in the U.S. and abroad (including unanticipated levels of, or increases in the rate of, unemployment); adverse changes in health care reform and/or other federal or state government policies or regulations as a result of health care reform or otherwise (including legislative, judicial or regulatory measures that would affect our business model, restrict funding for or amend various aspects of health care reform, limit our ability to price for the risk we assume and/or reflect reasonable costs or profits in our pricing, such as mandated minimum medical benefit ratios, eliminate or reduce ERISA pre-emption of state laws (increasing our potential litigation exposure) or mandate coverage of certain health benefits); our ability to differentiate our products and solutions from those offered by our competitors, and demonstrate that our products lead to access to better quality of care by our members; unanticipated increases in medical costs (including increased intensity or medical utilization as a result of flu, increased COBRA participation rates or otherwise; changes in membership mix to higher cost or lower-premium products or membership-adverse selection; changes in medical cost estimates due to the necessary extensive judgment that is used in the medical cost estimation process, the considerable variability inherent in such estimates, and the sensitivity of such estimates to changes in medical claims payment patterns and changes in medical cost trends; increases resulting from unfavorable changes in contracting or re-contracting with providers, and increased pharmacy costs); failure to achieve and/or delays in achieving desired rate increases and/or profitable membership growth due to regulatory review or other regulatory restrictions, the difficult economy and/or significant competition, especially in key geographic areas where membership is concentrated, including successful protests of business awarded to us; adverse changes in size, product mix or medical cost experience of membership; our ability to diversify our sources of revenue and earnings; adverse program, pricing or funding actions by federal or state government payors, including as a result of sequestration and/or curtailment or elimination of the Centers for Medicare & Medicaid Services' star rating bonus payments; the ability to reduce administrative expenses while maintaining targeted levels of service and operating performance; the ability to successfully implement our agreement with CVS Caremark Corporation on a timely basis and in a cost-efficient manner and to achieve projected operating efficiencies for the agreement; our ability to integrate, simplify, and enhance our existing information technology systems and platforms to keep pace with changing customer and regulatory needs; the success of our health information technology initiatives; our ability to successfully integrate our businesses (including Medicity, Prodigy Health Group, PayFlex, and Genworth Financial Inc.'s Medicare Supplement business and other businesses we may acquire in the future, including Coventry) and implement multiple strategic and operational initiatives simultaneously; managing executive succession and key talent retention, recruitment and development; the outcome of various litigation and regulatory matters, including guaranty fund assessments and litigation concerning, and ongoing reviews by various regulatory authorities of, certain of our payment practices with respect to out-of-network providers and/or life insurance policies; reputational issues arising from our social media activities, data security breaches, other cybersecurity risks or other causes; the ability to develop and maintain relations with providers while taking actions to reduce medical costs and/or expand the services we offer; our ability to maintain our relationships with third party brokers, consultants and agents who sell our products; increases in medical costs or Group Insurance claims resulting from any epidemics, acts of terrorism or other extreme events; and a downgrade in our financial ratings. For more discussion of important risk factors that may materially affect Aetna, please see the risk factors contained in Aetna's 2011 Annual Report on Form 10-K ("Aetna's 2011 Annual Report"), Aetna's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012, June 30, 2012 and September 30, 2012 (together Aetna's "Quarterly Reports"), each on file with the Securities and Exchange Commission (the "SEC"). You also should read Aetna's 2011 Annual Report and Aetna's Quarterly Reports on file with the SEC and Aetna's 2012 Annual Report on Form10-K when filed with the SEC for a discussion of Aetna's historical results of operations and financial condition.
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