LEONARD ABRAMSON secured his name in the annals of managed care in 1975 when he founded U.S. Healthcare, once one of the nation's most profitable HMOs. The 68-year-old entrepreneur, who drove a cab to put himself through pharmacy school, pocketed $929 million in 1996 when he sold his Blue Bell, Pa.-based company to Aetna for $8.9 billion-or almost three times its actual value.
A graduate of Pennsylvania State University, Abramson owned two pharmacies before investing $500,000 to start U.S. Healthcare. As chairman and chief executive officer, he used strict cost controls to capitalize on employers' demands for an end to rapid healthcare inflation in the 1980s. Through aggressive marketing and an emphasis on capitation, the company quickly became a market leader, one with an in-your-face attitude that often angered doctors.
When Hartford, Conn.-based Aetna acquired U.S. Healthcare, it was looking to step into the fast-growing managed-care industry. But analysts now say the merger was overly ambitious and ultimately responsible for much of the financial troubles Aetna has faced. Abramson held a seat on Aetna's board of directors but resigned in June 2000 amid questions that his presence was a conflict of interest.
The hard-nosed Abramson, known for his candor on topics ranging from the Clinton healthcare proposal to waste within his own industry, has been criticized for his hefty compensation packages, which regularly land him in the top rankings of corporate executives. Last year, he made Forbes' list of the 400 richest Americans, with a net worth of $850 million.