Joseph Swedish, Mark Bertolini in spotlight amid insurance industry's merger fever
If mergers amid four of the nation's largest health insurers pan out, it will be in large part due to the work of two men—Anthem CEO Joseph Swedish and Aetna CEO Mark Bertolini. And both face formidable challenges during every step of the consolidation process, the Wall Street Journal reports.
The executives have had differing experiences in the run-up to the announcement of their respective deals. The Aetna and Humana merger was largely free of drama, with CEOs Bertolini and Bruce Broussard broaching the subject of a deal during a friendly breakfast in March, according to the WSJ, and announcing the merger in early July. Humana also made no secret of its desire to find a deal partner.
Swedish, on the other hand, had to employ tougher tactics to hammer out a deal between Anthem and Cigna. After some behind-the-scenes talks between the companies, Anthem went public with a bid for its smaller counterpart in late June, an offer that Cigna's board publicly declined and called "deeply disappointing." Yet a month later the two companies had worked out their differences—including disagreements about how large a leadership role Swedish should play—and announced their own merger.
Despite the different histories behind Swedish and Bertolini's respective deals, "you're going to see some real similarities in terms of their leadership styles," Anthony R. Tersigni, chief executive of large hospital chain Ascension, who knows both CEOs, told the WSJ.
For example, both executives plan to draw on their past experience with deal-making--Bertolini in the insurance industry and Swedish at the helm of hospital companies--as they execute their mergers. Each CEO also has planned outreach campaigns to sell the merits of industry consolidation to those who have expressed skepticism about its effects on providers and consumers.
Federal regulators are likely to scrutinize the deals in tandem when deciding whether they violate antitrust rules, though both Bertolini and Swedish have indicated that they believe their mergers will win approval. Anthem faces the added hurdle of navigating rules related to its membership in the Blue Cross Blue Shield Association.
But Swedish indicated he is up to the challenge, telling investors during a recent conference call that "we are now engaged in conversations with the Blue organization so that it better understands the potential coming out of this new relationship."
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