Alphonso O’Neil-White to step down as head of BlueCross BlueShield parent [The Buffalo News, N.Y.]

Feb. 26--The surprise pending retirement of HealthNow New York CEO Alphonso O'Neil-White signals the end of an era for the Buffalo-based health insurer, but is not likely to lead to any changes in the short term.

HealthNow, parent of BlueCross BlueShield of Western New York, announced Monday morning that O'Neil-White will retire from his leadership post of the 76-year-old health insurer after a decade as president and CEO.

He is not leaving immediately, however, but will stay on until a new CEO is named, which will "allow for a seamless transition," according to a news release. He also will continue to serve this year as board chairman of the BlueCross BlueShield Association, the national branding and trade group for 38 Blues plans across the country.

In the meantime, the decision triggered HealthNow's succession plan, which allows the board "ample room to do a national search for O'Neil-White's successor," according to the release.

"We have orderly succession plans that we have in place that we have developed in conjunction with Alphonso over the course of years," said Chairman Thomas Hook, who is also CEO of Greatbatch Inc.

The board established a transition committee of company executives and directors, while hiring national search firm Russell Reynolds Associates of New York City, which has health care experience, to find a successor. Both internal and external candidates are being considered.

"The board has committed to a deliberate, thorough process, and they have not given themselves a time frame," O'Neil-White said. "They've asked me to help make sure that the CEO gets settled and oriented, so it won't be an abrupt change. Our customers and partners and providers won't see any difference in what we're doing."

Hook said O'Neil-White's decision to retire is personal and not because of any disagreements with the board. And he said the company is not likely to change direction significantly, aside from continuing to adapt to federal health care reforms that are affecting the entire industry.

"I think that the mission and vision of the company will remain as a company that serves the health care needs of the community," Hook said. "The strategy will not so much evolve because of Alphonso's transition. It'll evolve out of the needs of the industry."

While health care reform is transforming the industry and presenting major new challenges to insurers and executives, O'Neil-White said that was "more coincidence than anything else," and was not the primary reason for his decision. He also stressed, both in a news release and in an emailed letter to all 1,800 employees, that he is in "excellent health."

Rather, he referred to retirement as "more of a journey than a destination," and said he's been thinking more and more about it over time. "There is really no good or bad time for these things. You just walk up to it when you're ready."

More recently, he's also noticed as his fellow CEOs at other Blues plans, including David Klein of Excellus BlueCross and BlueShield in Rochester as well as those in Tennessee, Mississippi, North Carolina and South Carolina, all have retired within a short period of time.

In fact, less than a handful of the CEOs among the 38 Blues plans nationwide have been at the helm for as long as O'Neil-White.

"We've seen a change of the guard within the system, a lot of my friends and peers and colleagues," he said. "That makes you think, because there's generally a lot of conversation around retiring and what people are going to do and aren't going to do. That was the motivating factor."

O'Neil-White, who will turn 64 in May, is the longest-serving CEO in the company's recent history. He has been with the company for 17 years, since joining as senior vice president and general counsel in 1996 and then taking a promotion to interim CEO in 2003.

He is credited with turning the company around after years of poor financial performance and tightened oversight by state regulators, restoring it to a position of financial strength, higher and appropriate reserve levels, and continued leadership of the market.

Today, HealthNow serves more than 800,000 members, with estimated annual revenues in 2012 of $2.5 billion and $550 million in reserves. Besides the Western New York plan, it also owns BlueShield of Northeastern New York in the Capital District, as well as its regional and national third-party administration divisions, Brokerage Concepts and HealthNow Administrative Services in Blue Bell, Pa., and now Sacramento, Calif. The company employs about 1,400 in Buffalo, 200 in the Albany area, 200 in suburban Philadelphia, and just under 20 in California.

"I'm leaving the company at a good time in its evolution," he said. "It's a strong company, a vibrant company. We have a strong balance sheet. Our cash flows are robust. We've been consistently profitable over the term of my leadership. I'm leaving the company in good stead. I think that's an achievement."

He rejects criticism from some observers of the company that HealthNow has been inconsistent with its strategy, executive team and staff in the last few years, saying it only had "one major restructuring" when it created its "strategic business units" after moving into its new West Genesee Street headquarters. "As any company evolves, people come and go," he said.

And he said the company's labor dispute during union negotiations, which led to a lockout of several hundred workers, resulted in a successful outcome.

"Nobody wins in a labor dispute like that," he said. "We went into negotiations trying to get the company positioned to deal with a new reality in the marketplace, and we said that from the beginning. We ended up with a settlement that both sides thought they could live with."

O'Neil-White also retires as one of the highest-ranking minority executives in Western New York, but his trailblazing across racial barriers began long ago. He was the first black student and graduate from Hampden-Sydney College in Virginia in 1968 and 1972, respectively.

However, his impact on the Western New York community is much broader. Besides his leadership of HealthNow, he is also a trustee or director on the boards of the Albright-Knox Art Gallery, the Buffalo State College Council, the National Institute for Healthcare Management, the Business Council of New York State and the Federal Reserve Bank of New York. His is also the immediate past chairman of the Community Foundation for Greater Buffalo.

"I'm also very proud of this company's commitment to the community," O'Neil-White said. "I think the board has expressed a continuing commitment to improving our community."

Prior to joining HealthNow, O'Neil-White served as vice president and general counsel for a Washington-based predecessor trade group to America's Health Insurance Plans, traveling the country to work on health policy issues. He testified before Congress and state lawmakers, and provided commentary for national media on health care issues. He previously worked as senior counsel for health insurer Humana and as general counsel for Group Health Association, one of the nation's first HMOs.

"We want to find the next great leader for the company," Hook said. "We're looking forward to identifying that person and having Alphonso transition with them so the company can be successful in the future."

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