Gregory Wolf's 20-month stint as Humana's president and chief executive officer ended abruptly with his resignation last week. The resignation was apparently spurred by the managed-care company's failed 1998 acquisition by UnitedHealth Group and its sagging financial results this year.
Officials at Louisville-based Humana said Wolf, 42, is leaving "to pursue other interests."
Neither Humana Chairman David Jones nor Wolf was available for comment, according to Humana spokesman Dick Brown, who declined to say whether the board had asked Wolf to step down. "He offered, and it was accepted," Brown said.
Wolf did not release a statement about his resignation, which took effect immediately.
The company's plummeting stock price and inability to keep up with rising medical expenses cost Wolf his job, analysts said.
Moody's Investors Service said Aug. 4 it had placed Humana's bond ratings under review for a possible downgrade, largely because of concerns about the company's ability to deal with those higher-than-expected medical costs.
Those concerns "are heightened" by news of Wolf's departure, Moody's said. Humana officials responded that they are confident they can reverse the negative trends.
Humana's board appointed Jones, the company's co-founder and former CEO, as well as its chairman, as interim CEO. A search for Wolf's permanent replacement, which could take up to six months, is under way, officials said.
"The board is committed to improving operating results, shareholder values and shareholder confidence in Humana, and to promptly finding a permanent successor who will renew Humana's tradition of excellence," Jones said in a written statement Aug. 3.
Jones, 67, will head an "office of the chairman," which will include three other senior executives.
The company's fortunes have declined since the collapse last year of its proposed $5.5 billion purchase by Minneapolis-based UnitedHealth Group, then known as United HealthCare Corp. (Aug. 17, 1998, p. 10). Since Wolf took over as CEO in December 1997, Humana's stock has lost more than half its value. It traded late last week at less than $11 per share on the New York Stock Exchange.
For the second quarter ended June 30, Humana's net income dropped to $28 million, or just 17 cents per share, from $52 million, or 31 cents per share, in the year-ago period. Revenues for the quarter increased slightly, to $2.51 billion from $2.45 billion.
The company has about 6 million enrollees in 15 states and Puerto Rico. In one step to reduce costs, it announced its exit from 11 Medicare-risk markets in seven states at year-end (July 5, p. 3). The pullout will affect 46,000 of its 480,000 Medicare-risk enrollees.