CVS CEO Karen Lynch Takes over Day-to-Day Management of Aetna
After less than a year, Aetna president Brian Kane is out at CVS Health, it was announced today at an investor call. The change was made to address the continued pressure in the company’s healthcare benefits business.
Brian Kane
Aetna president Brian Kane has left CVS Healthcare, and CEO Karen Lynch will assume direct leadership of the company’s Health Care Benefits segment. The move was made to address the continued pressure in the company’s healthcare benefits business, Lynch said during an investor call this morning.
Kane had joined the company in September 2023.
Karen Lynch
“The majority of our businesses are performing well, and we continue to drive the integrated value of our company by executing on our strategy to connect people to the care and the coverage they need,” she said. “However, we are disappointed by the current performance and outlook for the healthcare benefits segment, and I have decided to make leadership changes effective immediately.”
Although revenue for Aetna and CVS’s healthcare benefits segment for the second quarter of 2024 increased to $32 billion, up 21.4% compared with last year, the medical benefit ratio has also increased— from 82.2% in the second quarter last year to 89.6% this year. The company said this was the result of increased utilization, a decline in star ratings in Medicare plans, higher acuity patients requiring higher levels of care in Medicaid programs, and a change in the risk for the healthcare exchange business.
Thomas F. Cowhey
Thomas F. Cowhey, executive vice president and chief financial officer of CVS Health, said during the investor call that medical cost trend is increasing, and the company may add to medical reserves.
This has led CVS Healthcare to lower its outlook for the remainder of the year. “Full year medical benefit ratio to be in a range of 90.6% to 90.8%,” he said.
“Following the close of the second quarter, we saw indications of potential trend acceleration, which we have contemplated in our revised guidance range,” Lynch said. “We saw an increase in the dislocation between Medicaid acuity level and rate. We will continue working closely with our state partners to advocate for rates that more closely align with changes in acuity within the quarter.”
In addition, CVS Health has announced that Katerina Guerraz, executive vice president and chief strategy officer will be chief perating officer of the Health Care Benefits segment. She is a 20-year Aetna veteran with commercial and Medicare experience.
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