Leonard Schaeffer
Chairman and CEO
WellPoint Health Networks Inc.
Often described as blunt, self-confident, and aggressive, Leonard Schaeffer took over as head of Blue Cross of California in 1986, and changed the non-profit company into WellPoint Health Networks Inc., a merger-hungry business that is now one of the largest publicly traded managed care providers in the nation.
Blue Cross of California’s transformation started as soon as Schaeffer took the helm. He cut 2,500 jobs and began shepherding members from their traditional “fee-for-service” indeminification plans, which allowed individuals to choose their own doctors, into HMO and other managed care products. In 1992 he reorganized those products under the WellPoint name, and in 1993 he started taking the company public.
Schaeffer kicked off WellPoint’s national expansion in 1995, with a failed attempt to merge with Health Systems International (now Foundation Health Care Systems). In 1996 Schaeffer oversaw the purchase and absorption of the group benefit operations of Massachusetts Mutual Life Insurance Co. and John Hancock Mutual Life Insurance Co., gaining customers not only in Massachusetts, but in Texas and in the Midwest as well.
The company now serves about 30 million members nationally through HMOs and a variety of other medical and dental plans. In coming months, Schaeffer hopes to acquire more regional health plans that can be converted to managed care systems.
“We have embarked on an expansion strategy that looks at specific businesses that will give us access to targeted geographies, including Georgia and the Southeast, Texas, and the Midwest,” Schaeffer said in a statement. “Our acquisition strategy has been defined by research into companies that typically offer more indemnity products but are amenable to a transition into managed care.”
Schaeffer, an Illinois native and graduate of Princeton University, did a stint as the head of Health Care Financing Administration (including Medicare, Medicaid, licensure and certification programs) in the Carter Administration while he was still in his 30s. Previously, he had worked as Illinois state budget director and head of the planning office.
