Investors didn't give a warm welcome to the incoming chief executive of health insurance giant WellPoint Inc.
Shares of the nation's second-largest health insurer fell $3.01, or nearly 5%, to $63 in trading Wednesday, a day after the company named a veteran hospital executive to be its next CEO.
WellPoint, which runs Anthem Blue Cross in California and health plans in 13 other states, picked Joseph Swedish to lead the company through a tumultuous time in the industry as insurers prepare for drastic changes under the federal healthcare law.
Swedish, 61, has served as CEO of Trinity Health Corp., which runs 47 hospitals in 10 states. The nonprofit health system had $9 billion in revenue last year. Swedish will start his new job March 25, WellPoint said.
Citigroup healthcare analyst Carl McDonald questioned whether Swedish was a good pick when WellPoint needs better execution in its core health insurance businesses.
Swedish has had a "long and illustrious career in the nonprofit hospital world, but he's virtually unknown to investors," McDonald said. "WellPoint picked someone without a lot of managed-care background."
Jackie Ward, chair of WellPoint's board, said Swedish "is an agile leader at a time when major transformations are requiring health benefit companies to examine new ways to better serve our stakeholders."
WellPoint is the nation's second-largest health insurer, behind UnitedHealth Group Inc., and it has about 36 million customers nationwide.
The Indianapolis company had been searching for a new leader since August when Angela Braly stepped down after major shareholders expressed dissatisfaction with the company's performance.
The company's shares had slumped 30% during Braly's five years at the helm, which were marked by managerial blunders and lackluster earnings. John Cannon has served as interim CEO and will return to his previous role as general counsel.
Under Braly, the company sought to diversify through a series of deals. In December, WellPoint completed its $4.5-billion acquisition of Medicaid insurer Amerigroup Corp.