Minnesota Blues Names Former Coventry Health, UnitedHealth Top Executive as New CEO

Blue Cross and Blue Shield of Minnesota has named a former top executive with Coventry Health Care Inc. and UnitedHealth Group as its new president and chief executive officer, effective in mid-February.

Kenneth Burdick succeeds Patrick J. Geraghty, who left to join Blue Cross and Blue Shield of Florida last summer.

Burdick most recently was the CEO of the Medicaid and behavioral health businesses at Coventry Health Care (NYSE: CVH), and a senior vice president there. Before Coventry Health, he served as CEO at the Minnesota-based UnitedHealth Group's (NYSE: UNH) Medicare company, Secure Horizons, and as president and CEO of UnitedHealthcare's commercial health insurance business.

Blue Cross and Blue Shield of Florida named Geraghty as its new CEO last July. He succeeded Dr. Robert I. Lufrano, who retired Sept. 1, 2011 (Best's News Service, July 12, 2011). Since Geraghty left, Pam Wheelock, a board member, has served as interim president and CEO, a spokesperson for Blue Cross Blue Shield of Minnesota said.

With about 2.6 million members, the nonprofit Minnesota Blues is the largest health insurer in the state. Although some criticize for-profit health insurers, Burdick told Best's News Service in 2008 that when UnitedHealth Group meets its financial goals, that benefits employers and consumers, and its shareholders (Best's News Service, April 29, 2008).

Operating gains for Blue Cross Blue Shield of Minnesota improved significantly in 2010, according to BestLink. The company reported statutory underwriting gains of $65.4 million at Dec. 31, 2010, which was primarily generated through strong underwriting gains in the Medicare supplement and commercial lines of business and aggressive rate actions, among other factors.

However, the economic conditions and competition in the local and national markets may present challenges to grow enrollment in the near term, according to BestLink. Potential legislative actions related to state deficits also may add pressures to programs supported by the local government but the company has responded by cancelling underfunded programs in the past.

Blue Cross Blue Shield of Minnesota currently has a Best's Financial Strength Rating of A- (Excellent).

(By Fran Matso Lysiak, senior associate editor, BestWeek: fran.lysiak@ambest.com)