Jeff Surges has left his role as president of Healthgrades to lead Connecture, a publicly traded company that builds the technology behind online health insurance exchanges.
Surges, 48, will begin his new role as CEO of Connecture Nov. 17. He replaces Doug Schneider, who will stay with the company as president and chief product officer.
The company said Schneider was changing roles to add more flexibility to the growing company. In a news release, Schneider said Surges is “the right person for Connecture and at a time where we are poised for enormous opportunity.”
Connecture's revenue has been growing quickly, but the Brookfield, Wis.-based company is still reporting heavy losses. Connecture posted a $2.3 million loss in the third quarter and lost $11.7 million in the first nine months of this year. However, that's an improvement over 2014, when it lost $2.9 million in the third quarter and $14.9 million in the first nine months. The company's stock is down more than 52% since it went public last December.
Despite the red ink, Surges said he is optimistic about Connecture's growth. “I don't think it's a turnaround at all,” he said when asked about the company's finances. “I think it's taking the base model here and positively growing on it.”
Health insurers, states, employers and other groups sign agreements with Connecture, which then builds an online platform for consumers to shop and enroll in health coverage. Competitors in the business include large consulting firms that build out private exchanges, like Aon Hewitt and Mercer, as well as benefit software firms such as Benefitfocus and Zenefits.
Connecture is the contractor for the federal Medicare.gov website and three state-based exchanges created by the Affordable Care Act: the District of Columbia, Maryland and Minnesota. The company also builds online exchange technology for many large insurers, including Aetna, Health Net and several state Blue Cross and Blue Shield plans. In April, Connecture won a contract from the Blue Cross and Blue Shield Association to build a private exchange for Medicare enrollees.
That blooming customer base drove revenue up 16% to $10 million in the third quarter. By the end of this year, Connecture expects to have almost $100 million in revenue.
Surges believes more employers and insurers will continue to move toward a “consumer-centric” plan model, which presumes that everyone wants more health plan choices and the ability to make their own decisions. “Gone is the day where one broker went to one employer with one plan for everybody,” Surges said.
Connecture approved a $450,000 salary for Surges as well as stock options. He's also eligible for up to $225,000 in annual bonuses. Surges previously oversaw day-to-day operations of Healthgrades, an organization that rates hospitals, doctors and other providers. He also was the CEO of Merge Healthcare, which has since been bought out by IBM, and is the former president of Allscripts Healthcare Solutions.
