Cora Tellez, a high-profile managed-care executive in California, has been named the new president and chief executive officer of Health Net, the state's fourth-largest managed-care plan.
Tellez, president of Prudential's California healthcare unit, will assume the top post at the struggling HMO on Dec. 1. She also has held executive posts at Blue Shield of California and Kaiser Permanente.
Tellez, 49, will replace Health Net CEO Arthur Southam, M.D., 42, who announced his resignation Nov. 10 after just two years in the job.
"She's impressive and focused and has a track record of leading organizations in a very successful fashion," said Jay Gellert, CEO of Foundation Health Systems, Health Net's parent.
Woodland Hills, Calif.-based Health Net is Foundation's 2.3-million-enrollee California unit. Publicly traded Foundation has 4.2 million enrollees overall.
In an internal memorandum obtained by MODERN HEALTHCARE, Southam said Health Net had been unable to "achieve the level of financial performance that our parent company and the market expect."
Higher-than-expected medical and other operating costs appear to be at the root of Health Net's difficulties.
Foundation does not break out Health Net's financials, but the parent took a $175 million restructuring charge and posted a net loss of $88.6 million, or 73 cents per share, for the third quarter ended Sept. 30, compared with net income of $60 million, or 49 cents per share, in the year-ago period. Revenues rose 24% to $2.2 billion.