WellCare Health Plans is in the midst of a boom.
Over the last five years, the Tampa-based health insurer has seen its revenue grow from $6 billion to a projected $14 billion, internal figures show.
WellCare, which employs more than 3,000 people in the Tampa Bay region, provides managed care services for the federal Medicaid and Medicare programs, as well as prescription drug plans. The company serves more than 2.4 million Medicaid members and 1.4 million Medicare members in 15 states.
Last week, the Tampa Bay Times sat down with Ken Burdick, who was promoted from president to CEO on Jan. 1. He spoke about his plans for the future and the rapidly evolving health care landscape.
You discussed WellCare's continued growth in the most recent earnings call with investors. Does the company plan to continue growing at this rapid pace?
We expect to double again over the next five years.
What are the company's growth areas?
In Medicaid, there are states that still have not adopted managed Medicaid, so those are big opportunities. … The second one is existing geographies where they've only had one or two programs in managed Medicaid. … The third is, not all of our states adopted Medicaid expansion (under the Affordable Care Act, also known as Obamacare), so that's a third leg of Medicaid growth.
What about the commercial insurance market or the Affordable Care Act exchanges? Do you plan to branch out to those areas?
We think there is so much opportunity right in front of us in the U.S. in the government program business. We're going to stay focused on that.
What would the company's expansion mean for the local economy?
Most of our core operations occur here in Tampa. Virtually all of our IT, a substantial amount of our clinical (operations) are done here. We have a fair amount of our administrative operations here; legal is here. What that would mean is that as we grow, we will continue to grow our presence (in the Tampa Bay area). It would be hard for me to put a number on it, but if we are at just north of 3,000 employees (locally), we would expect that would continue to grow. It will not double. As our business doubles, we have to find efficiencies and synergies, so we can't double our employee base as we double our revenue. But it would be a significant increase.
Some of the nation's largest insurance companies have in recent months announced plans to merge. How has consolidation in the industry affected WellCare?
We may have a unique opportunity. … There's a possibility that in order to satisfy Department of Justice concerns about monopoly and retaining a competitive market, (the companies involved in the mergers) may be required to divest some of their business. We would be a candidate, and we would be interested in pursuing that opportunity should that arise.
Does WellCare plan to be involved in any mergers or acquisitions?
We're operating as if we will continue to be an independent company for many years to come. We've got so much opportunity to grow our business, to improve our operations, to improve our profitability, that in some ways, the consolidation in the industry is a huge advantage for us. … We think a smaller, more agile, more nimble company can be much more responsive and in fact can be more tailored to the unique needs of a particular local market.
In 2007, federal officials descended on WellCare's Tampa headquarters as part of a well-publicized fraud investigation. Three employees were later sentenced to federal prison for a scheme to keep Medicaid money that should have gone to the state. What kind of controls have been put in place since then to prevent similar activity from happening again?
The occurrence in 2007 actually forced WellCare to dramatically strengthen its compliance activities. We have a very strong compliance organization. The chief compliance officer directly reports to me, which is not true in many companies. We have permeated our culture with a sensitivity to understanding the rules and regulations. We are constantly reinforcing that with training. And then, we've created an environment where we encourage people if they have any concerns — even if they are not quite sure — to go ahead and contact a manager, contact HR, call an anonymous hotline. … The best way I can describe our commitment to compliance is by saying all of the controls we put in place in response to that (event) we've kept in place. So, even as some may argue that the need for (those controls) has dissipated, we continue to be hypervigilant.
The federal Medicare program has been the target of recent criticism from some GOP presidential candidates. Is the program sustainable?
It is absolutely sustainable. … We are at the early stage of a fundamental evolution in health care from a fee-for-service (environment) — so the more things you do, the more you get paid — to something I call value-based reimbursement … where the clinical outcome gets factored in to the reimbursement. That will drive an awful lot of improved effectiveness and efficiency in the system.
Contact Kathleen McGrory at [email protected] or (727) 893-8330. Follow @kmcgrory.