STAFF & WIRE REPORTS—UnitedHealth Group's Chair and CEO William W. McGuire, MD, has stepped down as chairman of the board
and will resign as CEO on Dec. 1, following the release of a report that found that Dr. McGuire likely received backdated
stock options.
According to an Oct. 15 UnitedHealth Group company statement outlining a series of actions, the UnitedHealth Group Board elected
Stephen J. Hemsley to succeed Dr. McGuire as CEO upon his departure from the company. Hemsley joined the company in 1997 and
has been president and COO since 1999.
According to Clive Riddle, president and founder of MCOL, a provider of business-to-business health management and managed
care resources, during Dr. McGuire's time at UnitedHealth, the company's stock increased a multiple of 56 times.
"Its financial operating performance exceeds analyst expectations," Riddle tells MANAGED HEALTHCARE EXECUTIVE. "It has led
the industry in acquisitions during the past year, increasing its medical membership to 25.5 million—second only to WellPoint.
United's Uniprise division has been considered the industry leader in the growing consumer-driven care movement. And yet United's
stock is depressed and the company operates under a cloud-—all due to a scandal that is much bigger than United and bigger
than healthcare." In February, a United press release announced Dr. McGuire's exercise of 2.3 million shares of stock to support philanthropic
commitments and for financial diversification purposes, according to Riddle. "Never in a million years do I think Dr. McGuire
or United imagined at that time, that they did anything wrong or that the transaction would help trigger the firestorm that
it did," he says.
BIG FISH
"United got caught in the backdating scandal because they are a big and very visible fish," Riddle continues. "But there will
be other large healthcare companies ultimately caught in this net as well. More importantly, most of the companies caught
in this scandal have nothing to do with healthcare. You just have to be a public company, be fairly visible, have stock options
and participated in a practice that has indeed been widespread to now operate under a cloud."
UnitedHealth Group could not be reached for comment.
